BN Enterprises currently has no debt and a 15.9% cost of equity. The tax rate is 30%.

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

Question:

BN Enterprises currently has no debt and a 15.9% cost of equity. The tax rate is 30%. BN plans to issue debt with a cost of 6.7%. The funds will be used to to repurchases shares with a resultant capital structure of 30% debt.

What will BN's WACC be after the transaction?

Related Book For answer-question

International Accounting

ISBN: 978-0078110955

3rd Edition

Authors: Timothy Doupnik, Hector Perera

See More Books

Posted Date: Dec 06, 2023 02:03 AM

See More Questions

Sheehan Corp. is forecasting an EPS of $3.00 for the coming year on its 500,000 outstanding shares of stock. Its capital budget is forecasted at $800,000, and it is committed to maintaining a $2.00...
Last Sale Net Bid Ask Open Int Puts Last Sale Net bid Ask Vol Open Int 16Aug 155.00(1619H155-E) 6.45 0.75 6.95 7.25 9 16Aug 155.00(1619T155-E) 1.18 (0.75) 1.17 1.25 61 4505 16Aug 166.00(1619H160-E)...
1) Match each term in the second column with its correct definition in the first column. Write the letter of the term on the blank line in front of the correct definition. A manual that contains...
Prove that there exist two languages A and B that are Turing-incomparablethat is, where A T B and B T A.
Fairlawn Preschool operates a not-for-profit morning preschool that operates nine months of the year. Fairlawn Preschool has 160 kids enrolled in its various programs. The preschool's primary expense...
The Aimin Company is preparing a cash receipts schedule for the first quarter of 2005. Sales for November and December 2004 are expected to be $$40,000$ and $$80,000$, respectively. Budgeted...
Janie McMahon Products Company has stockholders' equity of $$200,000$ and net income of $$50,000$. It has a payout ratio of 20c and a rate of return on assets oi 16%. How much did McMahon...
Gavin Products uses a perpetual inventory system. For 2008 and 2009, Gavin has the following data: Required: 1. For each year, compute cost of goods sold, the cost of ending inventory , and gross...
Betermine the values of x for which the function, as represented by the graph to the right, is continuous. If the function is not continuous, determine the reason. Select the correct choice below...
The Booth Companys sales are forecasted to increase from $1,000 in 2007 to $2,000 in 2008. Here is the December 31, 2007, balance sheet: Booths fixed assets were used to only 50% of capacity during...
write a detailed summary of what you have learned from the course HR Law /Policies Bus 220 should be 450-700 words
When two organizations are merging, it can be a very stressful time for employees. Not only can this impact employees, it can also impact their family and relationships etc. 1. Describe a way in...
As manager of a hotel, you have noticed that persons suspected to be prostitutes are seen frequently in your hotel lobby and bar. What are your options, considering legal issues and business...
Price Inc. is a manufacturer of gold-plated knickknacks located in Portsmouth, NH. It procures its raw materials from three suppliers in Vermont and Northern NY state. Price Inc., rents trucks from...
This will continue to focus on the community you have identified in Unit I, which is either the community you live or work in. It is not a fictional community and should not differ from the one...
In MATLAB Using the series below, calculate with 13 significant digits. (-1)' = 23; = (2i+1)3' i=0 5.1. Use for loop with break, 5.2. Use while loop with break and 5.3. Use while loop with a given...
Peter and carol are former spouses. Pursuant to a court decree. Peter must pay stephanie $12,500 per year in support payments. Of this amount ,$9000 is child support and $3,500 is spousal support....
How can NAFTA be beneficial to suppliers of Walmart?
What is treaty shopping?
Which of the following best explains how a translation loss arises when the temporal method of translation is used to translate the foreign currency financial statements of a foreign subsidiary? a....
What is hedge accounting?
Data for the Frank B. Robinson Company are presented in PI2-5B. Further analysis reveals the following. 1. Accounts payable pertain to merchandise suppliers. 2. All operating expenses except for...
P12-8B Data for Bruce Willis Company is presented in P12-7B. Further analysis reveals the following. 1. Accounts payable relates to merchandise creditors. 2. All operating expenses, except...
The financial statements of Bruce Willis Company appear below. Additional information: 1. Plant assets were sold at a sales price of $$37,500$. 2. Additional equipment was purchased at a cost of...

BN Enterprises currently has no debt and a 15.9% cost of equity. The tax rate is 30%.

Question:

Expert Answer:

Current cost of equity 159 Tax rate 30 Cost of new de... View the full answer

International Accounting

Students also viewed these finance questions