Calculate the WACCthe weighted average cost of capitalusing the following data: Market value of debt = $30
Question:
Market value of debt = $30 million
Market value of equity = $50 million
Cost of debt = 9 percent
Tax rate = 40 percent
Cost of equity = 15 percent
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 80% (10 reviews)
Market value of debt 30 million Market value of equ...View the full answer
Answered By
Michael Mulupi
I am honest,hardworking, and determined writer
4.70+
72+ Reviews
157+ Question Solved
Related Book For
Question Posted:
Students also viewed these Economics questions
-
Weighted average cost of capital American Exploration, Inc., a natural gas producer, is trying to decide whether to revise its target capital structure. Currently, it targets a 50-50 mix of debt and...
-
The firms weighted average cost of capital is 11%, and it has $1,500,000 of debt at market value and $400,000 of preferred stock at its assumed market value. The estimated free cash flows over the...
-
Calculate UTX's weighted average cost of capital (WACC) for 2012. Use a cost of debt of 5.0%, an effective tax rate of 24.76%, a risk-free rate of 1.723%, a beta of 1.0565 and a market risk premium...
-
Explain the purpose of each of the following accounts used in a public share issue: Share Capital, Application, Cash Trust, Allotment, Call, Calls in Advance.
-
A bank with a branch located in a commercial district of a city has the business objective of developing an improved process for serving customers during the noon-to- 1 P.M. lunch period. Management...
-
A 200-N block rests as shown on a wedge of negligible weight. The coefficient of static friction s is the same at both surfaces of the wedge, and friction between the block and the vertical wall may...
-
In the region just downstream of a sluice gate, the water may develop a reverse flow region as is indicated in Fig. P4.59 and Video V10.9. The velocity profile is assumed to consist of two uniform...
-
An investment banker is analyzing two companies that specialize in the production and sale of candied apples. Old-Fashion Apples uses a labor-intensive approach, and Mech-Apple uses a mechanized...
-
. Can you describe what's wrong with the below code? 1 testProc([1, 2, 3]) # Explicitly passing in a list 2 testProc() # Using a default empty list 3 4 def testProc(n = []): 5 # Do something with n 6...
-
Using the financial statement data provided in Exhibits 2, 3, and 4, match the companies with their industry. I Since oppornunities and constraints tend to be different across industries, companies...
-
Use the following data to calculate economic profit in year1. ear Sales Expenses other than interest Depreciation Earnings before interest and taxes (EBIT) Taxes on EBIT @40% Eamings before interest...
-
Listed below are financial figures for Abbott Labs. How well is Abbott doing? Explain youranswer. 89 90 91 92 93 94 Sales (Smil) 5,380 6,159 6,877 7,852 8,408 9,156 10,012 11,014 Net income 860 96...
-
Under the state code of your state, can licenses be revoked for the failure to pay child support? If so, what licenses? What are the conditions that will trigger a revocation?
-
Two metallic spheres A and B are placed on nonconducting stands. Sphere A carries a positive charge, and sphere B is electrically neutral. The two spheres are connected to each other via a wire, and...
-
In the first quarter of the year 2015/2016, City Steels total revenues decreased by 35 per cent compared with the previous year. Adverse economic conditions caused the Groups products to decrease...
-
Apple Inc. is well known for developing innovative products like the iPhone, iPad and iPod. Such devices are manufactured with complex electronic components and incur substantial design and...
-
Most developed economies have well-developed road and highway networks. From time to time new highways are built to relieve congested cities, but by and large most developed countries are not...
-
Allan Stratton is a cost management consultant with over 35 years of experience who shares the benefit of his experience providing tools and resources via the internet. In one of his articles he...
-
Why are municipals attractive to individuals and corporations with high incomes or profits?
-
Floyd Distributors, Inc., provides a variety of auto parts to small local garages. Floyd purchases parts from manufacturers according to the EOQ model and then ships the parts from a regional...
-
You are looking into the quality of the diamonds of the diamond mines in a new area. You have a special interest in "Fancy diamonds" 5 of quality IF and VVS, and you are estimating \(\pi\), the...
-
Corporate profitability declined by 20 percent from 2008 to 2009. What performance percentage would you use to trigger executive bonuses for that year? Why? What issues would arise with hiring and...
-
In the Southern Company Managerial Challenge, which alternative for complying with the Clean Air Act creates the greatest real option value? How exactly does that alternative save money? Why? Explain...
-
In 2006, firms in the drug industry earned an average return on net worth of 22 percent, compared with an average return of 14 percent earned by over 1,400 firms followed by Value Line. Which theory...
-
Research current information on the career development processes for the HRM professional. If possible try to find two recent journal articles or HR publications (last two years or so) which examine...
-
"The skills required to communicate [ROI Impact Study] results effectively are almost as delicate and sophisticated as those needed to obtain results." Is this an exaggeration? Why or why not?
-
help finding a recent empirical research study that is focused on strategic human resources. Synthesize the research findings, and discuss the author's recommendation for further research. Based on...
Study smarter with the SolutionInn App