Bank loans-bonds-preferred stocks and common stocks

Assignment Help Financial Management

Reference no: EM132028657

FINA Company’s assets are $500 million, financed through bank loans, bonds, preferred stocks and common stocks. The amounts are as follows:

Bank loans: $ 100 million borrowed at 4%

Bonds: $200 million, paying 8% coupon with semi-annual payments, and maturity of 10 years. FINA sold its $1,000 par-value bonds for $960 and had to incur $40 floatation cost per bond.

Preferred Stocks: $50 million, paying $20 dividends per share. FINA sold its preferred shares for $205 and had to incur $5/share floatation cost.

Common Stocks: $150 million, the beta of FINA stocks is 2.2, the 90-day Treasury yield is 2%, return on the market portfolio is 12 %.

If FINA is subject to 30% tax rate, what is the WACC for FINA?

Reference no: EM132028657

Questions Cloud

Estimated value of the synergistic benefits from the merger : What is the minimum estimated value of the synergistic benefits from the merger?

What is the npv of this project : If the tax rate is 32 percent and the discount rate is 9 percent, what is the NPV of this project?

What is the expected return of your portfolio : What is the expected return of your portfolio? The expected return of your portfolio is?

What is the ocf for project : The project is estimated to generate $1934778 in annual sales, with costs of $691081. If the tax rate is 33 percent, what is the OCF for this project?

Bank loans-bonds-preferred stocks and common stocks : FINA Company’s assets are $500 million, financed through bank loans, bonds, preferred stocks and common stocks.

Cost of common stock from reinvested earnings : Estimate the cost of common stock from reinvested earnings: the CAPM, the DCF method, and the bond-yield + risk premium approach.

What was the market risk premium during these ten years : What was the market risk premium during these ten years?

Calculate the optimal number of orders per year : Calculate the economic order quantity. Calculate the optimal number of orders per year.

What is the stock expected price three years from today : The required rate of return on the stock is 19.5%. What is the stock's expected price 3 years from today (i.e. solve for P3)?

User Account

All Pages