Reference no: EM131178511
Weston Industries has a debt-equity ratio of 1.2. Its WACC is 9 percent, and its pretax cost of debt is 5.7 percent. The corporate tax rate is 35 percent.
a. What is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the company's unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
c-1. What would the cost of equity be if the debt-equity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
c-2. What would the cost of equity be if the debt-equity ratio were 1.0? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
c-3. What would the cost of equity be if the debt-equity ratio were zero? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
|
Mispricing of the firm shares is expected to correct
: The market price of a share of Firm A’s stock is $99.24 today, but you have estimated that its value is actually $118.17. Assume that mispricing of the firm’s shares is expected to correct (prices return to your estimated value) over the next year. H..
|
|
Estimate the cost of 150 square foot shell and tube heat
: A 250 square foot shell and tube heat exchanger was purchased for $15,250 in 2004 when the index value was 830. Estimate the cost of 150 square foot shell and tube heat exchanger in 2014 when the index value is 1,059 and the appropriate cost-capac..
|
|
If the required rate of return is 13 percent what is the
: Justin Cement Company has had the following pattern of earnings per share over the last five years: Project earnings and dividends for the next year (2011). If the required rate of return (Ke) is 13 percent, what is the anticipated stock price (P0) ..
|
|
How do loops make program more efficient
: Answer the following questions as part of one page paper in APA format and include the references: 1. How do loops make program more efficient? 2. What makes subprograms such as functions useful in maintaining and updating a program?
|
|
What is the companys cost of equity capital
: What is the company's cost of equity capital?- What is the company's unlevered cost of equity capital?- What would the cost of equity be if the debt-equity ratio were 2?
|
|
Compare two to three challenges of public leadership
: Compare and contrast two to three challenges of public leadership for elementary principals, secondary principles, and college presidents. Provide two to three examples of such public leadership challenges.
|
|
Differences between a computer crime investigator
: What are some similarities and differences between a computer crime investigator and a security analyst?
|
|
What is the firm NOPAT and Economic Profit
: The all equity firm (it has no debt and so pays no interest) has shareholders who require 10% return on their invested capital. All of the firm’s capital is tied up in operating activities. The firm’s ROIC = 16%. Earnings before tax is $100 and the f..
|
|
What is the estimated capital investment
: The inflation rate on solar panel construction projects averages 8% per year. If the cost-capacity factor is 0.85 for solar panel construction, what is the estimated capital investment for the smaller 6-MW solar farm
|