Gentech, Inc. financed a new product as follows: $5 million in stock sales at 13.7% per year,

Question:

Gentech, Inc. financed a new product as follows: $5 million in stock sales at 13.7% per year, $2 million in retained earnings at 8.9% per year, and $3 million through convertible bonds at 7.8% per year. The company’s WACC is closest to:

(a) 9% per year

(b) 10% per year

(d) 12% per year

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

Step by Step Answer:

Related Book For book-img-for-question

Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

See More Books

Question Posted: Dec 17, 2012 06:06 AM

See More Questions

MacAfee Corporation has basic earnings per Class A common share of$ 2.61. MacAfee has a tax rate of 25%. The average share price during the year was$ 42. Review each of the following items: a. Class...
Q1. Suppose player A and player B are playing the following game. Player A can choose "Up" and "Down", while player B can choose "Left" and "Right". The payoff matrix is depicted below. Player A's...
A ladder is propped up to a barn at an 80-degree angle. if the ladder is 22 feet long, what is the approximate height where the top of the ladder touches the barn?
Start your VM and open a terminal window (note: you may always open more than one terminal window if desired). For this laboratory exam, we will be using the network topology shown in Figure 1....
The ground state of H2 has 1+g symmetry. What restriction does this impose on the values of m, n, j, and k in the James and Coolidge wave function?
Describe the process of estimating the appropriate market risk premium. Where can data be found for estimating the market risk premium?
It is estimated that nearly half of all users of the social networking platform TikTok in the United States were between the ages of 10 and 29 in 2020 (Statista.com website). Suppose that the results...
Thomas Flanagan was an audit partner and key member of management (Vice Chairman) at Deloitte LLP, based out of the firm's Chicago office. During the latter part of his career, he managed a large...
The centralized legal staff of an automotive manufacturer has determined that there is a need for an E-commerce initiative to handle the invoicing transactions received by the legal staff and the law...
You are the portfolio manager of a boutique equity fund with $15 million to invest. The risk-free rate is 5% and your fund can borrow and lend at the risk-free rate. Your research analyst finds that...
The Athlete's Shop has evaluated two proposals for weight lifting and exercise equipment. A present worth analysis at i = 15% per year of estimated revenues and costs resulted in PWA = $440,000 and...
If the after-tax rate of return for a cash flow series is 11.2% and the corporate effective tax rate is 39%, the approximated before-tax rate of return is closest to: (a) 6.8% (b) 5.4% (c) 18.4% (d)...
The A. B. Good Company sells electrical supplies to building contractors on terms of net 60. The firms average monthly sales are $100,000; thus, given the firms 2-month credit terms, its average...
Imagine you are planning to invest in a listed company manufacturing high quality footwear. There is a strong family representation on the board of directors and the company has a strong reputation...
How much of the information suggested for the strategic report is extracted directly from the financial statements? How much of the information suggested for the strategic report provides additional...
The SEC requires that, in order to be classified as proved undeveloped reserves, there must be a plan in place to develop those reserves within a specific period of time. That time period is: a....
An object node should not be shown before a (a) decision node (b) merge node (c) join node (d) fork node
Which of the following best describes an exclusive gateway? a. The only gateway in a BPMN diagram. b. A gateway that does not connect to message flows. c. A gateway with only one exit path per...
Using the information in QS 6-12, prepare any necessary journal entries that Organic Food Co. must record as a result of preparing the bank reconciliation. Data from QS 6-12 Organic Food Co.s Cash...
Interest Compounded Annually. When P dollars is invested at interest rate i, compounded annually, for t years, the investment grows to A dollars, where A = P(1 + i) t . Trevor's parents deposit $7800...
The Triangle class is derived from the RegPolygon class. Using the UML diagrams shown below, complete the following: A. List any overloaded methods in the RegPolygon and Triangle classes. B. List any...
A consulting engineering firms CFO wants to purchase either Ford Explorers or Toyota 4Runners for company principals. The two models under consideration cost $30,900 for the Ford and $36,400 for the...
EP Electric has identified two new methods to treat its cooling water. Alternative I (for inflow) would treat the raw water with a conventional reverse osmosis system so that the cycles of...
A company that manufactures amplified pressure transducers wishes to decide between the machines shownvariable speed (VS) and dual speed (DS). Compare them on the basis of rate of return and...
You invest into Malaysian stock market. On 3 May 2021, construct an investment portfolio. State the reason(s) for selecting those financial assets available in the Malaysian stock market. (b) To...
Line spectra for atoms is generated by electronic transitions between quantum energy levels. For the hydrogen atom we established that in the absence of external fields the energy depends only on the...
Control Substances: 3.0 g calcium carbonate (chalk) and 0.50 M HCI CaCO3(s) + 2HCl(aq) CaCl2(s) + H2O(aq) + CO2(g) Can you please 2 graphs, one for the control experiment and one for the variable...

Gentech, Inc. financed a new product as follows: $5 million in stock sales at 13.7% per year,

Question:

Step by Step Answer:

The formula used to find the weighted average cost ...View the full answer

Engineering economy

Students also viewed these Economics questions