Caliper Ltd. has market values of debt, preference shares and common equity of $170 million, $90...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Caliper Ltd. has market values of debt, preference shares and common equity of $170 million, $90 million, and $ 425 million, respectively. The yield to maturity of its only outstanding bond is 4.5%, compounded semi-annually. and the coupon rate is 6.2% paid semi-annually. Its perpetual, preferred shares are currently trading at $25.39 and the next preferred dividend, due in 12 months, will be $1.73 per share. Finally, the equity beta is 1.1, and analysts estimate that the aggregate market will return 4.3% in excess of the risk-free rate of 2.5% over the coming 12 months. The applicable corporate tax rate is 25.0%. Calculate the capital structure weights: The weight of debt is The weight of preferred shares is The weight of common equity is Calculate the cost of capital for ... debt: preferred equity: common equity: What is the firm-wide WACC? %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) Caliper Ltd. has market values of debt, preference shares and common equity of $170 million, $90 million, and $ 425 million, respectively. The yield to maturity of its only outstanding bond is 4.5%, compounded semi-annually. and the coupon rate is 6.2% paid semi-annually. Its perpetual, preferred shares are currently trading at $25.39 and the next preferred dividend, due in 12 months, will be $1.73 per share. Finally, the equity beta is 1.1, and analysts estimate that the aggregate market will return 4.3% in excess of the risk-free rate of 2.5% over the coming 12 months. The applicable corporate tax rate is 25.0%. Calculate the capital structure weights: The weight of debt is The weight of preferred shares is The weight of common equity is Calculate the cost of capital for ... debt: preferred equity: common equity: What is the firm-wide WACC? %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places) %. (round to 2 decimal places)
Expert Answer:
Answer rating: 100% (QA)
Capital Structure Weights Weight of Debt Calculate the market value of all securitiesMarket Value 17... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 9780357516669
14th Edition
Authors: Eugene F Brigham, Phillip R Daves
Posted Date:
Students also viewed these finance questions
-
Berry Industries is evaluating four projects for potential inclusion in their 2016 capital budget. The table below contains the cash flows expected for each project. Complete the table for the...
-
The following questions deal with the topics of internal controls and audit strategies. Required: Select and justify the audit strategy you would choose in each of the following situations. Comment...
-
a. Prove that the running time of Shellsort is (N2) using increments of the form 1, c, c2, . . . , ci for any integer c. b. Prove that for these increments, the average running time is (N3/2).
-
Determine the vertical force P which must be applied at G so that the linkage is in equilibrium for the position shown. 1.2 in. 3.6 in.- 20 lb 1,6 in. 15 lb-ft 1.6 in.
-
Trade secret theft can cause significant harm to a business. At the same time, businesses sometimes intentionally suppress information that might harm sales if publicly known. Suppose an employee of...
-
Refer to Exercise 20-18. Fiber Systems needs 84,000 optical switches. By outsourcing them, Fiber Systems can use its idle facilities to manufacture another product that will contribute $253,000 to...
-
"Managing Away Bad Habits Team Assignment Organizational Behavior IILeadership Assigned is ashort case from the exercise Managing Away Bad Habits. The task is to develop a turnaround strategy for...
-
The owner of Neros company has hired you to analyze her company's performance and financial position, as well as the positions of Iits competitors, Centar and Xermix. However, the data Neros abtained...
-
Political nature of accounting standard setting It is well known that the FASB has long opposed a merger and that the adoption of the International Standards in Australia in 2005 were contentious and...
-
What is diversification? Does a stockholder get a greater benefit from diversification when going from 1 to 10 stocks or when going from 100 to 120 stocks?
-
As we produce increasing amounts of a particular good, the resources used in its production ________. a) become more suitable b) become less suitable c) continue to have the same suitability
-
Which statement is true? a) Although our economy was not performing well, college graduates from the class of 2012 received more job offers than any other graduating class in history. b) The economic...
-
Compared to our economic history between 1870 and 1945, our economic history since 1945 could be considered _____. a) much more stable b) about as stable c) much less stable
-
Each of the following was a major contributing factor to suburbanization except ______. a) low-interest federal loans b) a federal highway building program c) the pent-up demand for housing d) the...
-
Create a class named SysTickUMNG.h using c++, involving the SysTick configuration of an STM32F7xx micrprocessor, knowing the following functions. -void SysTick_Wait(uint32_t n){ SysTick->LOAD =...
-
Determine two different Hamilton circuits in each of the following graphs. A B F G
-
A company has the following information: What is its free cash flow to equity? Earnings before interest and taxes Interest expense Tax rate Net change in debt Investment in total capital $80.00 $...
-
Payne Products had $1.6 million in sales revenues in the most recent year and expects sales growth to be 25% this year. Payne would like to determine the effect of various current assets policies on...
-
The APV and corporate valuation models are entity valuation models while the FCFE model is an equity valuation model. Explain the difference between an entity valuation model and an equity valuation...
-
What is meant by corporate governance and why is it important?
-
Continuing to focus on evidence associated with the act, concealment, and conversion, use the evidentiary material to continue the examination. In addition, the examiner also starts to think of terms...
-
Consider the following cash flow profile and assume MARR is 10 percent/year. a. Determine the ERR for this project. b. Is this project economically attractive? EOY 0 2 3 4 5 6 NCF -$100 $15 $15 $15...
Study smarter with the SolutionInn App