Company XYZ is considering to raise capitals to support its expansion plan for the coming year....

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Company XYZ is considering to raise capitals to support its expansion plan for the coming year. It has a target capital structure of 30% debt and 70% equity, with the financing costs summarised in the following table. A Financing Costs for Company XYZ Total amount of debt After-tax cost Total amount of equity (in millions) of debt (in millions) 3 Less than $30 4 $30 to less than $100 B 5.60% 6.40% с Less than $70 $70 to less than $140 $140 to less than $300 Cost of equity 6.50% 7.20% 8.50% If the company plans to raise 50 million, what would the weighted average cost of capital (WACC) be? Show your reasoning and write the corresponding Excel formula for this calculation. If the company plans to raise 200 million, what would the weighted average cost of capital (WACC) be? Show your reasoning and write the corresponding Excel formula for this calculation. Company XYZ is considering to raise capitals to support its expansion plan for the coming year. It has a target capital structure of 30% debt and 70% equity, with the financing costs summarised in the following table. A Financing Costs for Company XYZ Total amount of debt After-tax cost Total amount of equity (in millions) of debt (in millions) 3 Less than $30 4 $30 to less than $100 B 5.60% 6.40% с Less than $70 $70 to less than $140 $140 to less than $300 Cost of equity 6.50% 7.20% 8.50% If the company plans to raise 50 million, what would the weighted average cost of capital (WACC) be? Show your reasoning and write the corresponding Excel formula for this calculation. If the company plans to raise 200 million, what would the weighted average cost of capital (WACC) be? Show your reasoning and write the corresponding Excel formula for this calculation.

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC we need to find the weighted average of the a... View the full answer