Question: Using the following data, answer a-e. Please show all work step by step. Thank you so much! Xena Corp. Total assets $21,249 Interest-bearing debt(market value)

Using the following data, answer a-e. Please show all work step by step. Thank you so much!

Xena Corp.

Total assets $21,249

Interest-bearing debt(market value) $11,070

Average borrowing rate for debt 10.2%

Common Equity:

Book Value $5,535

Market Value $23,247

Marginal income tax rate 19%

Market Beta 1.64

a) Assuming that the risk free rate is 4.5% and the market risk premium is 6.2%, calculate Xena's cost of equity capital, using the capital asset pricing model:

i) 10.2%

ii) 13.6%

iii) 15.2%

iv) 14.7%

b) Calculate Xena's cost of debt capital

i) 8.3%

ii) 13.5%

iii) 3.2%

iv) 10.2%

c) Determine the weight on debt capital that should be used to calculate Xena's weighted-average cost of capital

i) 52.1%

ii) 67.0%

Iii) 32.0%

iv) 47.6%

d) Determine the weight on equity capital that should be used to calculate Xena's weighted- average cost of capital

i) 33.3%

ii) 71.9%

iii) 67.7%

iv) 54.9%

e) Assuming that the risk-free rate is 4.5% and the market risk premium is 6.2%, calculate Xena's weighted- average cost of capital

i) 13.2%

ii) 10.7%

iii) 10.4%

iv) 12.6%

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