What is the firm weighted average cost of capital

Assignment Help Finance Basics
Reference no: EM132473825

Suppose a firm has both a current and a target debt-equity ratio of .6, a cost of debt of 5.1% and a cost of equity of 10%. The corporate tax rate is 34%. What is the firm's weighted average cost of capital?

Reference no: EM132473825

Questions Cloud

What is the loans effective annual rate : What's the loans effective annual rate (EAR)? (Do not round intermediate calculations and round final answer to 2 decimal places.)
What is the present value of deposit in year 3 : What is the present value of $4,200 deposit in year 3, and another $3,700 deposit at the end of year 6 using 9% interest rate?
Compute the present value : Compute the present value of $4,800 paid in two years using the following discount rates: 8 percent in the first year and 7 percent in the second year.
How much trial balance will not be out of balance : Was the credit column total of the trial balance overstated, understated, or correctly stated? If overstated or understated, show by how much.
What is the firm weighted average cost of capital : The corporate tax rate is 34%. What is the firm's weighted average cost of capital?
What is the stock current price per share : What is the stock's current price per share (before the recapitalization)? Do not round intermediate calculations. Round answer to the nearest cent.
What is the break even point for xyz corporation : A) What is the break even point for XYZ Corporation's product, the widget? B) What will be the break even point if sales increase to 15%?
What bernie madoff accountscandal precipitate legislation : Use the Bernie Madoff accounting scandal that precipitated the legislation and discuss whether or not internal controls (or lack thereof) contributed to scandal
What is the firm profit margin : A firm has the following financial statement data: Sales = $1,000,000, COGS = $500,000, Operating Expenses = $200,000, and Tax Rate = 30%.

Reviews

Write a Review

Finance Basics Questions & Answers

  A building is priced at 125000 if a down payment of 25000

a building is priced at 125000. if a down payment of 25000 is made and a payment of 1000 every month thereafter is

  Estimate the value-ebit multiple

If the firm earns a return on capital of 12.5%, and faces a 30% tax rate, please estimate the value/EBIT multiple for this firm.

  What is the company wacc

Calculating WACC. Bargeron Corporation has a target capital structure of 75 percent common stock, 5 percent preferred stock, and 20 percent debt.

  How much will she have in her account four years from today

If Jacqulyn invests $700 today in an account that pays 4 percent interest compounded annually, how much will she have in her account four years from today

  What was the cash flow from the project

The only capital investment required for a small project is investment in inventory. Profits this year were $11,800, and inventory increased from $4,900 to $6,800. What was the cash flow from the project?

  How many of the old shares must be given up

How many of the old shares must be given up for one new share to achieve the $25 price, assuming this transaction has no effect on total market value?

  A stock has had returns of 36 percent 19 percent 27

a stock has had returns of 36 percent 19 percent 27 percent -7 percent 6 percent and 13 percent over the last six

  What is the present value

What is the present value (at time 0) of the project's cash flows if the opportunity cost of capital is 9%?

  Short term liquidity of the company

Cash budget is a very important tool for the maintenance of the short term liquidity of the company. Prepare a cash budget policy which will ensure the short term liquidity of the company.

  Effects of international portfolio diversification

Analyze effects of international portfolio diversification on an investment portfolio. Examine alternative investment vehicles.

  Explain the terms fair value less costs of disposal

ACCT19062 Issues in Financial Reporting. Explain the terms 'fair value less costs of disposal' and 'value in use'. Prepare appropriate journal entries for Black Cabs Pty Ltd to record the events on 30 June 2015 and  30 June 2016

  Find weighted average cost of capital

Find weighted average cost of capital if cost of internal equity is 10% and before-tax cost of debt is 7%. Corporate tax rate is 38%. Use the same proportions

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