Question: i domt know how to do part one If its current tax rate is 2504 , how much higher will Tumbull's weighted averoge cost of
If its current tax rate is 2504 , how much higher will Tumbull's weighted averoge cost of capital (WacC) be if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained eamings? (Note: Round your intermediate calculations to two decimal places.) 0.92% 1.01% 1.10% 1.20% Turnbuil Co. is considering a project that requires an intial investment of $570,000. The firm will raise thet $570,000 in capital by issuing $230,000 of debt at a before-tax cost of 10.2%,$20,000 of preferred stock at a cost of 11.4%, and $320,000 of equity at a cost of 14.396. The firm faces a tax rate of 25%. What will be the waCC for this project? (Note: Round your intermediate calculations to three decimal places.) Consider the case of Kuhn Co. Kuln Co. is considering a new project that will require an initial investment of $4 million. It has a target capital structure of 58% debt, 6% preferred stock, and 36% common equity, Kutn has noncallable bonds outstanding that mature in five years with a face value of $1,000, an annual coupon rate of 10%, and a market pnce of $1,050.76. The yleid on the company's current bonds is a good approximation of the yieid on any new bonds that it issues. The company can sell shares of preferred stock that pay an annual dividend of 39 at a price of 592.25 per ahare. Kuhn does not have any retained earnings available to finance this profect, so the firm will have to issue new common stock to help fund it. ths common stock is currentiy selling for $22.35 per share, and it is expected to pay a dividend of $2.78 at the end of next year. Fiotation costs wilf represent B\%. of the funds raised by issuing new common stock. The company is projected to grow at a constant rate of 0 .7\%, and they face a tax rate of 25%. What will be the wacc for this project? (Notel Round your intermediate calculations to two decimal placen.)
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