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%

User Account

All Pages