Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
You have been appointed as a financial consultant by the Directors of auckland holdings they require you to calculate the cost of capital of the company. The following information is available on the capital structure of the company: 1 500 000 Ordinary Shares, with a market price R3 per share. The latest dividend was 95 cents per share. A dividend growth of 10% was maintained for the past 5 years. 1000 000 12%, R1 Preference shares with a market value of R2 per share. R1 000 000 9%, Debentures due in 7 years and the current yield-to-matuarity is 10%. R1 200 000 14% Bank loan, due in december 2022. Addistional Information: 1. The company has a tax rate of 30%. 2. The beta of the company is 1.5, a risk free rate of 6% and the return on the market is 15%. Required: 1.1 Calculate the weighted average cost of capital WACC. Use the Gordon Growth Model to calculate the cost of equity. 1.2 Calculate the cost of equity, using Capital Asset Pricing Model.
You are provided the following information: Debt $ 90000 Equity $ 90000 The shares trade at $ 10; the growth rate is 7%. Dividends last year were $ 1.00. What is the WACC if the CFO decides on changing the capital structure to 60% debt and 40% equity..
The Wool Co. is considering the purchase of some new equipment. The commercial-loan quote consists of a monthly payment of $3,750 for 5 years at 6.5 percent interest per year. What is the purchase price of the equipment?
Suppose you borrow $13000 when financing a tea shop which is valued at $48000. Assume that the unlevered cost equity of the coffee shop is 15% and that the cost of debt is valued at 8%. What is the value of equity of the tea shop? What is the value o..
You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 15 percent, –6 percent, 18 percent, 14 percent, and 10 percent. What was the arithmetic average return on Crash-n-Burn’s stock over this five-year period..
A newly issued bond pays its coupons once a year. Its coupon rate is 5.3%, its maturity is 20 years, and its yield to maturity is 8.3%. Find the holding-period return for a one-year investment period if the bond is selling at a yield to maturity of 7..
You plan to buy a house in 8 years. You want to save money for a down payment on the new house. You are able to place $183 every month at the end of the month into a savings account at an annual rate of 9.39 percent, compounded monthly. How much mone..
The CFO of your firm has asked you for an approximate answer to this question: What was the increase in real purchasing power associated with both 3-month Treasury bills and 30-year Treasury bonds? Assume that the current 3-month Treasury bill rate i..
Which one of the following is the best example of two mutually exclusive projects?
Calculate the effective annual rate of interest on this loan.
Booher Book Stores has a beta of 1.2. The yield on a 3-month T-bill is 3.5% and the yield on a 10-year T-bond is 6%. The market risk premium is 5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of comm..
bond has a $1,000 par value, 12 years to maturity, and a 9% annual coupon and sells for $1,110. What is its yield to maturity (YTM)?
A corporate bond currently yields 8.5%. Municipal bonds with the same risk, maturity, and liquidity currently yield 5.5%. At what tax rate would investors be indifferent between the two bonds?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd