a. What does ABBC's capital structure look like?

What is the proportion of debt financing in ABBC's capital structure?

b. What is ABBC's weighted average cost of capital?

c. If ABBC's stock price were to rise such that it sold at 3.5 times its book value and the cost of equity fell to 13 percent, what would the firm's weighted average cost of capital be (assuming the cost of debt and tax rate do not change)?

INSPIRON FIN 320-794 Summer 2017 Homework: Chapter 9 Score: 0 of 1 pt 200125 (25 conglete) Hw Score: 75 73%, 18 93 of 25 pts X Problem 9-17 (similar to) Question Help Wesged average cost or captal) ABBC I expanson into the Northwest The imrs balance sheel al lhe cinse of 2015 appeared ronows At present, the fiem's common stock is seling for a price equal to 3 times ts book value, and the frmts investors require a retum of 16 percent. The firms bonds command a yield to matur ty of firm taces a tax rate of 35 percent. Al the end of the previous year, ABBC's bonds were trading near ther par valte Inc operates a very successhui chan of yogurt and coffee shops speresad ac.noss the southwestern pairt of the United Slales annd needs to raise funds for its planned k value, and the firm's rwestors require a return of 16 percent The Arms borkds command a iekd to matur ty o s percent, and the ty of 9 pertent, and the a. What does ABBC's captal structure look ike? b. What is ABBC's weighted average cast ot capnar? . If ABBC's slock price were 10 rise such tha! sold at s 5 times its book value and the cost or eque, tel in 13 perat what would the inrs rate do nol change? bouk value: and the cost of equiey tel to 13 percn what woukd the tims wengtled average enst of capital be (assuming thhe cost or deht and tax a. What is the proponor101 debt training in ABBC's capnal structure? -x (Round to twa decimal places.) 1,750,000 4,020,000 1, 780,onr: 32,073.000 30 523 00n Accounts recewable Long lesm deb Common ecuty Total deol and equity U919,000 30,704,000 wet property, plant, and equipment Enter you! answer in the answer hox nd then click Gheck Answer $ Tota assels 30 523 00n rint Done ^Hs@-..8 7/2/2017 6 8 Caps LockA SDF G H K Enter Pson Ait Ctrt