Bluefield is evaluating a new investment project

Assignment Help Finance Basics

Reference no: EM1314901

Q. Finding the WACC Bluefield Corporation has 5 million shares of common stock outstanding, 750,000 shares of 7 percent preferred common stock outstanding also 250,000 11 percent semiannual bonds outstanding, par value 1,000 each. The stock currently sells for $40 per share also has a beta of 1.2, the preferred stock currently sells for $75 per share also the bonds have a 15 yrs to maturity also sell for 93.5 percent of par. The market risk premium is 6 percent, T-bills are yielding 4 percent also Bluefield's tax rate is 34 percent.

a. Illustrate what is the firm's market value capital structure?

b. If Bluefield is evaluating a new investment project which has the same risk as the firm's typical project, illustrate what rate should it utilize to discount the project's cash flows?

Reference no: EM1314901

Questions Cloud

Objective type questions on cost of capital and wacc : Objective type questions on cost of capital and WACC and he company currently has no debt in its capital structure

What is the tension in the vine at the lowest point of swing : A 12 kg box slides 4.0 {rm m} down the frictionless ramp, and then collides with a spring whose spring constant is 240 N/m.

Company''s net operating income : CVP Analysis - Multiple Choice - how much higher or lower will the company's net operating income be than if the motors are purchased from the outside supplier?

Probability value-occurring of event : A probability value of .25 means that an event will occur:

Bluefield is evaluating a new investment project : If Bluefield is evaluating a new investment project which has the same risk as the firm's typical project, illustrate what rate should it utilize to discount the project's cash flows.

Identifying the stage of cell cycle : The cell has no cyclin B present, has mono-phosphorylated cdk1.Has no growth factor receptors on its surface. Cyclin B is present, spindle is present, chromatin is completed condensed

Determine the mechanical energy of the system : While John is travelling along a straight interstate highway he notices that the mile marker reads 243 km john travels until he reaches his path to the 178 km marker what is john's resultant displacement from the 243 km marker.

Break-even-analysis : Break-even-analysis - Contribution Break-even and Margin per unit margin ratio in Units

Average annual inflation rate expected by investors : estimate the average annual inflation rate expected by investors over the life of the thirty- yr bond.

User Account

All Pages