A business has debt of $23,200, equity of $43,500, an after-tax cost of debt of 7.14 percent,

Fantastic news! We've Found the answer you've been seeking!

Question:

A business has debt of $23,200, equity of $43,500, an after-tax cost of debt of 7.14 percent, a cost of capital of 12.8 percent, and a tax rate of 35 percent. What is the firm's weighted average cost of capital?

Related Book For answer-question

Intermediate Financial Management

ISBN: 978-1111530266

11th edition

Authors: Eugene F. Brigham, Phillip R. Daves

See More Books

Posted Date: May 22, 2023 04:04 AM

See More Questions

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-6. On December 12, Irene purchased the building where her store is located. She paid...
For the Kelvin state as considered in Example 15.4, explicitly justify the displacement and stress results given in relations (15.2.8) and (15.2.10). Data from example 15.4 Equation 15.2.8 Equation...
According to information found in an old hydraulics book, the energy lost per unit weight of fluid flowing through a nozzle connected to a hose can be estimated by the formula h = (0.04 to 0.09)...
A normal distribution with mean 0 and standard deviation 1 is called the ____________________ normal distribution. In Exercises 914, fill in each blank with the appropriate word or phrase.
Review Kelly Long Travel Designs trial balance. Assume that Long accidentally listed dividends as $$100$ instead of the correct amount of $1,000. Requirement 1. Compute the incorrect trial balance...
Orlando Auto Accessories produces pickup truck bumpers that it sells on a wholesale basis to new car retailers. The average bumper sales price is $160. Normal annual sales volume is 300,000 units,...
What are the various stages of the budgeting process, elaborate each step, which types of budgets are widely used, and address briefly the benefits and disadvantages of each.
You are called by the daughter of an elderly woman who lives alone. The daughter lives in another city and is concerned because her mother does not drive and has seemed unhappy and listless on the...
The Figure below shown a pipe with a diameter of 5 cm connected to a reservoir and delivered a total discharge of 60 m/h. Determine the type of flow if turbulent or laminar. What is the value of the...
With roots that go back to before the Great Depression, Marriott International (www.marriott.com) has come a long way from its founding by husband and wife John and Alice Marriott. As of 2014,...
Using a camera fitted with a lens for which $f=50 \mathrm{~mm}$, you take a photograph of a person who is $1.7 \mathrm{~m}$ tall and is standing $29 \mathrm{~m}$ away from you. What is the...
An object is placed $0.30 \mathrm{~m}$ in front of a converging mirror for which the radius of curvature is $1.0 \mathrm{~m}$. (a) On which side of the mirror is the image? Is the image real or...
Find the solution to the following PDE: \[\begin{aligned}& \frac{\partial^{2} u}{\partial t^{2}}=\frac{\partial^{2} u}{\partial x^{2}} \\& u(0, t)=u(\pi, t)=0 \\& u(x, 0)=0 \\& \frac{\partial...
Consider two plates at temperatures of $600 \mathrm{~K}$ and $500 \mathrm{~K}$ with emissivities of 0.8 and 0.4 , respectively. The plates are separated by a gray gas that has an absorption...
Exercise 5.4 Determine all the PSEs and the PPSEs of the "Mutual Admiration Society" of Exercise 1.4 on pages 14 and 15. HINT: While a small calculation may be revealing, no calculation is required...
a. What is the cost of borrowing if Amarjit borrows $28 500 and repays it over a four-year period? b. How many shares of each stock would he get if he used the $28 500 and invested equally in all...
The Bookbinder Company has made $150,000 before taxes during each of the last 15 years, and it expects to make $150,000 a year before taxes in the future. However, in 2012 the firm incurred a loss of...
Bynum and Crumpton Inc. (B&C), a small jewelry manufacturer, has been successful and has enjoyed a good growth trend. Now B&C is planning to go public with an issue of common stock, and it faces the...
Sam Strother and Shawna Tibbs are vice presidents of Mutual of Seattle Insurance Company and co-directors of the company's pension fund management division. An important new client, the North-Western...
Determine the displacement of point $C$. The beam is made from A992 steel and has a moment of inertia of $I=53.8 \mathrm{in}^{4}$. 8 kip A B -5 ft- -10 ft 5 ft-
Determine the slope at $B$. The beam is made from A992 steel and has a moment of inertia of $I=53.8 \mathrm{in}^{4}$. 8 kip A B -5 ft- 10 ft- -5 ft-
The beam is made of Douglas fir. Determine the slope at $C$. 8 kN BO -1.5m 1.5m- -1.5 m- 180 mm H 120 mm

A business has debt of $23,200, equity of $43,500, an after-tax cost of debt of 7.14 percent,

Question:

Expert Answer:

To calculate the weighted average cost of capital WACC we need to determine the proportion of debt a... View the full answer

Intermediate Financial Management

Students also viewed these finance questions