What is the current market value of the stock

Assignment Help Finance Basics
Reference no: EM132544348

PT KP 182 Tbk as a multinational company in export and import from Indonesia has a capital structure as follows: (1) value of debt (D) $2.5 million; (2) interest rate (Rd) 10%; and (3) cost of equity (Rs) 15%. The stock is traded at $30 per share, and the stock outstanding is 600,000 shares. The tax rate is 40% (T). The market is stable and therefore the firm expects no growth, so all earnings are paid out as dividends.

a. What is the current market value of the stock, and the firm's total market value.

b. (5%) What is the firm's current weighted average cost of capital (WACC).

(Hint: please use your own assumptions to answer the questions if the information is not clear)

Reference no: EM132544348

Questions Cloud

Calculate the project discounted payback : The Makro Zoom and Zico Company can purchase equipment on sale for €4,300. The asset has a three-year life, will produce a cash flow of €1,200
Present entries to record the transactions green company : Present entries to record the transactions Green Company Purchase of bonds on August 1, Year 1. Receipt of first semiannual interest
Semi annual payments to be made on the loan : Kindly draw up an amortisation schedule showing the semi annual payments to be made on the loan
Prepare the journal entries for the issuance of the note : Mason Builders Company has a March 30th year end. Prepare the journal entries for the Issuance of the note
What is the current market value of the stock : PT KP 182 Tbk as a multinational company in export and import from Indonesia has a capital structure as follows: (1) value of debt (D) $2.5 million
Prepare the journal entries for the original purchase : On February 12, Paddison, Inc. purchased 6,000 shares of Spell Company, Prepare the journal entries for the original purchase, dividend, and sale.
What is the company wacc : Question 1 - When determining relevant cash flows for project evaluation, we should _____.
What is amy tax basis in the stock received : The corporation assumed a liability of $120 on the property transferred. What is Amy's tax basis in the stock received in the exchange
Compute the current price of the stock : The required return on common stock (Ke) is 13.2%. The firm has a constant growth rate of 7.2%. Compute the current price of the stock (Po).

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