Question: Only need help on the last two Spam Corp. is financed entirely by common stock and has a beta of.85. The firm is expected to

Only need help on the last two Spam Corp. is financed entirelyOnly need help on the last two

Spam Corp. is financed entirely by common stock and has a beta of.85. The firm is expected to generate a level, perpetual stream of earnings and dividends. The stock has a price-earnings ratio of 7.60 and a cost of equity of 13.16%. The company's stock is selling for $58. Now the firm decides to repurchase half of its shares and substitute an equal value of debt. The debt is risk-free, with an interest rate of 4.5%. The company is exempt from corporate income taxes. Assume MM are correct. a. Calculate the cost of equity after the refinancing. (Enter your answer as a percent rounded to 2 decimal places.) b. Calculate the overall cost of capital (WACC) after the refinancing. (Enter your answer as a percent rounded to 2 decimal places.) c. Calculate the price-earnings ratio after the refinancing. (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. Calculate the stock price after the refinancing. e. Calculate the stock's beta after the refinancing. (Round your answer to 1 decimal place.) a. Cost of equity b. Cost of capital c. Price-earnings ratio d. Stock price e. Stock's beta 21.82% 13.16% 4.58

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