What is cryptons cost of capital for the firms tax rate

Assignment Help Financial Econometrics
Reference no: EM13327499

Crypton Electronics has a capital structure consisting of 44% common stock and 56% debt. A debt issue of $1000 par value, 5.6% bonds that mature in 15 years and pay annual interest will sell for $979. Common stock of the firm is selling for $30.83 per share and the firm expects to pay a $2.29 dividend next year.

Dividends have grown at pay of 5.2% per year and are expected to continue to do so for the foreseeable future. What is Crypton's cost of capital where the firm's tax rate is 30%

Reference no: EM13327499

Questions Cloud

What is the value of your retirement plan after the 40 years : Assume that you contribute $240 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $480 per month for another 25 years.
In benchmarking sales representatives against one another : In benchmarking sales representatives against one another, what problems arise from continuing to reassign the above-average trade representatives to previously unproductive sales territories?
How many km can it travel on one tank : A tank of a car holds 16 gallons , a liter is .264 gallons, 1 inch equal 2.54 cm, and 1mile equal 1609 m, how many km can it travel on one tank if it gets 25mpg
Find ebit indifference level associated with financing plans : To finance the new venture two plans have been proposed. Plan A is an all common equity structure in which $2.3 million dollars would be raised by selling 86,000 shares of common stock.
What is cryptons cost of capital for the firms tax rate : Crypton Electronics has a capital structure consisting of 44% common stock and 56% debt. A debt issue of $1000 par value, 5.6% bonds that mature in 15 years and pay annual interest will sell for $979.
Compute the operating income for the olive oil division : Compute the operating income for the Olive Oil Division using a transfer price of $4 and compute the operating income for the Olive Oil Division using a transfer price of $2.14.
Calculate the maximum force constant of the spring : You are designing a delivery ramp for crates containing exercise equipment. Calculate the maximum force constant of the spring
Explain how to compute cost of new common stock : Expected cash dividends are $3.00, the divedend yield is 4%, flotation costs are 4% of price, and the growth rate is 3%. Compute cost of new common stock.
What will the after-tax cost of debt be when the loan is due : Tobin's BBQ has a bank loan at 8% interest and an after-tax cost of debt of 6%. What will the after-tax cost of debt be when the loan is due if a new loan is taken out yielding 11%

Reviews

Write a Review

Financial Econometrics Questions & Answers

  Which firm or firms if either should accept the project

Travel Excitement specializes in making travel reservations and promoting vacation travel. Wilderness Adventures has an aftertax cost of capital of 13 percent and Travel Excitement has an aftertax cost of capital of 11 percent.

  Determine possible investment potential between 2-companies

As the representative from your accounting firm or practice, you are in charge of stock market analysis that will be presented to clients as part of professional consultation process.

  Find how many common shares are currently outstanding

Henderson Industries has $500 million of common equity; its stock price is $44 per share; and its Market Value Added (MVA) is $50 million. How many common shares are currently outstanding

  What is the pw at the supers marr and the rate of return

Zippy Quick, in his bright suit and straw hat, walked briskly into the large building complex to see the superintendent (Super) about her heating, ventilating, and air conditioning (HVAC) equipment.

  Determine what is qms weighted average cost of capital

If the cost of common equityfor the firm is 17.1%, the cost of prefered stock is 9.3%, the before tax cost of debt is 7.7% and the firms tax rate is 35%, what is QM's weighted average cost of capital

  How to compute the required rate of return

Russo's Gas Distributor, Inc. wants to determine the required return on a stock with a beta coefficient of 0.5. Assuming the risk free rate of 6 percent and the market return of 12 percent.

  What was the return f the stock market for march 14-2013

THe index closed at 14,539.14, which was up from the previous day's close of 14,455.28. What was the return (in percent to four decimal places) of the stock market for March 14, 2013

  How should the fed-fdic and occ economists respond

The bank officials are concerned about the on-going shrinkage of bank assets as a share of total assets of financial institutions in the United States. In the late 1990s, assets of commercial banks as a percentage of total assets

  What is the npv if the discount rate is 16 percent

Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,228,876. have a life of five years, and would produce the cash flows shown in the following table.

  What is the capital budgeting process

What is capital budgeting, what is the capital budgeting process, what are the principles of capital budgeting and when do we make a capital investment?

  How many units must firm sell to earn in operating profit

A firm with $49,000 in fixed costs breaks even on unit sales of 7,000, how many units must the firm sell to earn $30,000 in operating profit

  Objectives and principles guiding corporate governance

What is corporate governance and what are the objectives and principles guiding corporate governance?

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