What is jack weighted average cost of capital

Assignment Help Finance Basics
Reference no: EM13270414

Jack's Construction Co. has 100,000 bonds outstanding that are selling at par value. The bonds yield 10.3 percent. The company also has 4.8 million shares of common stock outstanding. The stock has a beta of 1.5 and sells for $60 a share. The U.S. Treasury bill is yielding 4 percent and the market risk premium is 7 percent. Jack's tax rate is 35 percent. What is Jack's weighted average cost of capital?

12.77 percent
10.76 percent
6.25 percent
12.49 percent
9.04 percent

 

Reference no: EM13270414

Questions Cloud

Quality of life in professional fire?ghters : What are the research questions? Hypotheses - what theoretical framework did the researcher use
What is the decrease in length : If the column is 2.30m in length before being stressed, what is the decrease in length
Determine what is the penetration depth of a microwave oven : The complex permittivity for bottom round steak is about epsilon = 40(1 - j0.3)*epsilon0(e0) at the operating frequency (2.5 GHz) of a microwave oven. What is the penetration depth
Compute the price of the stock : The new dividend after 12 months will represent D1. The required rate of return (Ke) is 14 percent. Compute the price of the stock.
What is jack weighted average cost of capital : The stock has a beta of 1.5 and sells for $60 a share. The U.S. Treasury bill is yielding 4 percent and the market risk premium is 7 percent. Jack's tax rate is 35 percent. What is Jack's weighted average cost of capital?
Obtain the induced current in the coil : A 180-turn circular coil has diameter 5.35cm and resistance 1.25?. obtain the induced current in the coil
What is the decay constant of this isotope : A drug prepared for a patient is tagged with 9943Tc, which has a half-life of 6.05 h. What is the decay constant of this isotope
How many years is it until this bond matures : The Lo Sun Corporation offers a 5.8 percent bond with a current market price of $823.50. The yield to maturity is 8.18 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?
Determine the focal length of the objective lens : The barrel of a compound microscope is 13.0 cm in length. The specimen will be mounted 1.00 cm from the objective, Determine the focal length of the objective lens

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the impact of overhead allocation

What is the impact of overhead allocation when the project is underway?

  Determining the proper cash flow amount

Determine the proper cash flow amount to use as initial investment in fixed assets when estimating this project? Describe why?

  Marginal cost of equity

Vertrice Industries expects to earn $400 million in after-tax income this year. Calculate what its marginal cost of equity capital will be if it must fund a capital budget of $800 million with equity capital.

  Find what is the net present value of the project

what is the net present value (NPV) of the project? What is the internal rate of return? Should the project be purchased?

  Determine the production range

If a Corporation were to produce between 150,000 and 175,000 units per year. Producing more than 175,000 units alters the company's cost structure.

  How many years will it take to exhaust her funds

Your aunt Ruth has $500,000 invested at 6.5%, and she plans to retire. She wants to withdraw $40,000 at the beginning of each year, starting immediately. How many years will it take to exhaust her funds?

  What is the companys cost of equity capital

Marie's CFO has calculated the company's WACC as 7.83%. What is the company's cost of equity capital? Round your answer to two decimal places.

  Calculate the net present value

Calculate the net present value (NPV) for the following twenty-year projects. Comment on the acceptability of each. Assume that the firm has an opportunity cost of 14%.

  Analyze the investment banking process

The Capital Markets and Investment Banking Process is new and quite confusing to me. Analyze the investment banking process.

  Define the capital asset pricing model

Define the Capital Asset Pricing Model, and then use the CAPM to determine if you should invest in StarPerformance or not and explain your investment decision.

  What annual payment should carl expect

If Carl paid the same amount for this security as Teresa paid for her bond, what annual payment should Carl expect? Calculate and explain in words all calculations.

  Compare and contrast the approach to strategic planning

Compare and contrast the approach to strategic planning that each company has pursued in order to achieve a competitive advantage. Focus specifically on both intended and emergent strategies.

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