What is its weighted average cost of capital

Assignment Help Finance Basics
Reference no: EM131781911

A company has 100 million shares outstanding trading for $8 per share. It also has $900 million in outstanding debt. If its equity cost of capital is 15%, and its debt cost of capital is 12%, and its effective corporate tax rate is 40%, what is its weighted average cost of capital? (Show workings)

Reference no: EM131781911

Questions Cloud

Return on equity for similar stocks : The dividend is not expected to grow. The return on equity for similar stocks is 12%. What is P0? (Show workings)
Discuss how you would approach nutrition : Address food aid programs that would be appropriate for referral. What exercise recommendations would be appropriate for your client/s.
What interest rate did the third party receive : Janie Christopher lent $6000 to a friend for 90 days at 12%. After 30 days, she sold the note to a third party for $6000.
Discuss what pretax amounts did s&l include in earning : What pretax amounts did S&L include in its 2016 and 2017 earnings as a result of this investment
What is its weighted average cost of capital : A company has 100 million shares outstanding trading for $8 per share. It also has $900 million in outstanding debt. If its equity cost of capital is 15%.
Record the transactions in airbornes general journal : Oct 26 Purchased 3,000 shares of treasury stock at $15 per share, Record the transactions in Airbornes general journal
How much must earn in the summer : A student has a savings account earning 9% simple interest. She must pay $1500 for first-semester tuition by September 1 and $1500 for second-semester tuition.
What is the initial value of gladstone equity : a. What is the initial value of Gladstone's equity without leverage? Now suppose Gladstone has zero-coupon debt with a $100 million face value due next year.
Discuss the motor pool prepares an annual budget : the supervisor of themotor pool prepares an annual budget, which is reviewed by the university andapproved after suitable modifications

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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