Shi Import-Export's balance sheet shows $400 million in debt, $60 million in preferred stock, and $260 million
Question:
Shi Import-Export's balance sheet shows $400 million in debt, $60 million in preferred stock, and $260 million in total common equity. Shi's tax rate is 15%, rd = 9%, rps = 8.9%, and rs = 13%. If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is its WACC? Round your answer to two decimal places. %
David Ortiz Motors has a target capital structure of 40% debt and 90% equity. The yield to maturity on the company's outstanding bonds is 11%, and the company's tax rate is 26%. Ortiz's CFO has calculated the company's WACC as 13.9%. What is the company's cost of equity capital? Round your answer to the nearest whole number. %
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham