Question: can I just have the work for D, E, and WACC please I just need the work for each and make it simple please so
can I just have the work for D, E, and WACC please I just need the work for each and make it simple please so you can easily explain it and I can understand where you got each numbers thank you so much
F. Pierce Products Inc. is considering changing its capital structure. F. Pierce currently has no debt and no preferred stock, but it would like to add some debt to take advantage of low interest rates and the tax shield. Its investment banker has indicated that the pre-tax cost of debt under various possible capital structures would be as follows: Market Debt- Market Equity- Market Debt- Before- to-Value to-Value to-Equity Tax Cost Ratio Ratio Ratio of Debt (Wd) (Ws) (D/S) (rd) 0.0 1.0 0.00 6.0% 0.2 0.8 0.25 7.0 0.4 0.6 0.67* 8.0 0.6 0.4 1.50 9.0 0.8 0.2 4.00 10.0 * Use the exact value of 2/3 in your calculations. F. Pierce uses the CAPM to estimate its cost of common equity, rs and at the time of the analaysis the risk-free rate is 7%, the market risk premium is 8%, and the company's tax rate is 30%. F. Pierce estimates that its beta now (which is "unlevered" because it currently has no debt) is 1.35. Based on this information, what is the firm's optimal capital structure, and what would be the weighted average cost of capital at the optimal capital structure? Do not round intermediate calculations. Round your answers to two decimal places. Debt: 80 % Equity: 20 WACC: 15.21 % %
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