Patrick wacc using market-value weights

Assignment Help Finance Basics
Reference no: EM132187915

WACC

The Patrick Company's year-end balance sheet is shown below. Its cost of common equity is 16%, its before-tax cost of debt is 13%, and its marginal tax rate is 40%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,152. The firm has 576 shares of common stock outstanding that sell for $4 00 per share. Calculate Patrick's WACC using market-value weights.

Reference no: EM132187915

Questions Cloud

What is the expected rate of return of the stock : A stock has a beta of 1.20, the expected market rate of return is 12%, and a risk-free rate of 5 percent. What is the expected rate of return of the stock?
What is the total amount the webster student : A Webster University student recently graduated from a Masters Program, obtained a good job and is buying a car. What is the total amount the Webster Student ca
What is the yield-to-maturity : A $10,000 face value STRIPS is currently quoted at 38:16 and has 13 years to maturity. What is the yield-to-maturity?
Why is the npv of a relatively long-term project : Why is the NPV of a relatively long-term project (one for which a high percentage of its cash flows occurs in the distant future
Patrick wacc using market-value weights : The firm has 576 shares of common stock outstanding that sell for $4 00 per share. Calculate Patrick's WACC using market-value weights.
What is the price of stock : Dividend will grow 20%/year for 3 years and 5%/year after that. Risk free rate is 2% and average return of the market is 13%. What is the price of this stock?
Find the amount of the payment if money : if both debts are to be paid off be a single payment at the end of four years, find the amount of the payment if money is 6% compounded quarterly.
What is the net present value of project : A firm wishes to secure a contract that is expected to yield the after-tax net cash flows at the end of each year listed below. To secure the contract
Two different options for repayment of a loan : The Financially Astute company is considering two different options for repayment of a loan. The first option requires payment of $40,000 at the end of the next

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the 90-day forward rate

Assume that interest rate parity holds and that 90-day risk-free securities yield 5% in the United States and 5.3% in Britain. In the spot market, 1 pound = $2. a. Is the 90-day forward rate trading at a premium or a discount relative to the spot rat..

  Create a job board site in a compelling manner

Create a job board site that presents companies in a compelling manner, to make job listings interesting and to provide job seekers a better sense.

  Price the bonds from the above table with annual coupon pay

Price the bonds from the above table with annual coupon payments.

  Find the net pay for the given month

Trey Morgan is an employee who is paid monthly. For the month of January of the current year, he earned a total of $4,538. The FICA tax for social security.

  What are the asset funder resulting return on assets

You are considering a stock investment in one of two firms (AllDebt, Inc. and AllEquity, Inc.), both of which operate in the same industry and have identical.

  What is the loading charge

Jarell Tarver invested $20,000 in the Boyd Kern Mutual Fund (Type A). The net asset value is $21.34 per share. The fund is front-loaded with a loading rate of 5.25%. What is the loading charge?

  Manufactures and sells computer games

Manufactures and sells computer games.

  What are sustainable hr practices

What are sustainable HR practices and how do they affect employees?- How can HR discover the sustainability sweet spot of an organization when it comes to employment relations?

  Who is financially responsible for injuries to pedestrian

Explain who is financially responsible for the injuries to the pedestrian as well as for the damage to Martin's car.

  Explain why the present value of a cash flow stream and

explain why the present value of a cash flow stream and the asset associated there with fluctuate in value with the

  How the idea of mineral rights can impact you as a business

Realty is land and everything permanently attached to it. That seems like a simple concept. Explain how the idea of mineral rights can impact you as a business

  Determine the internal rate of return for the proposed sale

determine the internal rate of return for the proposed sale

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd