What is unida after-tax debt cost of capital

Assignment Help Financial Management
Reference no: EM131580905

Unida Systems has 36 million shares outstanding trading for $9 per share. In addition, Unida has $110 million in outstanding debt. Suppose Unida's equity cost of capital is 18%, its debt cost of capital is 9%, and the corporate tax rate is 35%.

a. What is Unida's unlevered cost of capital?

b. What is Unida's after-tax debt cost of capital?

c. What is Unida's weighted average cost of capital?

a. What is Unida's unlevered cost of capital?

Unida's unlevered cost of capital is %. (Round to one decimal place.)

Reference no: EM131580905

Questions Cloud

Should xyz open a branch office in british columbia : Question - XYZ, Inc., a successful Midwest firm, is considering opening a branch office on the west coast. Should XYZ open a branch office in British Columbia
Questions at the end of the seb latvia case study : The three questions at the end of the SEB Latvia Case Study 10-1 on page 232 and the three questions at the end of the Crowdsourcing Case Study 10-2.
Black scholes geometric brownian motion model : Consider a European Call in the Black Scholes Geometric Brownian Motion (GBM) model.
Complete the balance sheet for the jaimesh company : Question - Complete the following balance sheet for the Jaimesh Company using the following information: Debt to Assets = 60%
What is unida after-tax debt cost of capital : Unida Systems has 36 million shares outstanding trading for $9 per share. What is Unida's after-tax debt cost of capital?
Well-advertised whistle-blower hotline : Your company has a well-advertised whistle-blower hotline. What do you do?
Examine risk-taking behaviors by adolescents : In order to establish their sense of identity, adolescents often have to try out new roles and new experiences associated .
Discuss professional networking : Discuss three reasons for utilizing professional networking during the job-hunting process
Daily clinical and administrative job duties : What are the key components of HIPAA and how does it impact daily clinical and administrative job duties?

Reviews

Write a Review

Financial Management Questions & Answers

  Incorporate your software into their systems

You wrote a piece of software that does a better job of allowing computers to network than any other program designed for this purpose. A large networking company wants to incorporate your software into their systems and is offering to pay you $519,0..

  Enterprise value including market cap and debt or both

Union Pacific Railroad reported net income of $770 million in 1993, after interest expenses of $320 million. (The corporate tax rate was 36%.) It reported depreciation of $960 million in that year, and capital spending was $1.2 billion. Estimate the ..

  Difference between the capm and the arbitrage pricing theory

What are two potential tests that can be conducted to verify the CAPM? What are the results of such tests? What is Roll's critique of CAPM tests? Briefly explain the difference between the CAPM and the Arbitrage Pricing Theory (APT).

  Sensitivity of bond prices to changes in interest rates

For a given coupon rate, the sensitivity of bond prices to changes in interest rates increases at an increasing rate as maturity increases. What are the duration and modified duration of a seven-year, 3.5 percent coupon rate, annual coupon payment, $..

  Explain the phrase colonialism legacy

Explain the phrase “Colonialism’s Legacy”.

  Long-term performance of actively managed mutual funds

Discuss the long-term performance of actively managed mutual funds relative to the Standard and Poor’s 500. What are your thoughts?

  Determine the expected percentage holding period return

National Telephone and Telegraph (NTT) Company common stock currently sells for $60 per share. NTT is expected to pay a $4 dividend during the coming year, and the price of the stock is expected to increase to $65 a year from now. Determine the expec..

  What is current price of bond-zero-coupon bonds with value

Dark night inc just issued zero-coupon bonds with a par value of $1000. The bond has a maturity of 11 years and a yield to maturity of 9.64% compounded semi annually. What is the current price of the bond.

  What profit do you actually expect

The Woods Co. and the McIlroy Co. have both announced IPOs at $59 per share. One of these is undervalued by $18.50, and the other is overvalued by $9.00, but you have no way of knowing which is which. You plan on buying 1,950 shares of each issue. If..

  What is the present value of a five period annuity

What is the present value of a five period annuity of $1,000 if the interest rate is 10% and the first payment is made today?

  Factors leads to a high dividend-payout ratio

Which of the following factors leads to a high dividend-payout ratio?

  What is its macaulay duration

What is its plain duration? -  If the yield curve is a flat 0%, what is its Macaulay duration? -  If the yield curve is a flat 3%, what is its Macaulay duration?

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