Calculate the current total market value of the company

Assignment Help Financial Accounting
Reference no: EM132844110

Question - Osborne Construction currently has the following capital structure: Debt: $20,500,000 paying 9.5% coupon bonds outstanding with 15 years to maturity, an annual before-tax yield to maturity of 8% on a new issue. The bonds currently sell for $1,125 per $1,000 face value. Ordinary Shares: 100,000 shares outstanding currently selling for $45 per share. The company just paid a $3.50 dividend per share and is experiencing a 5% growth rate in dividends, which it expects to continue indefinitely. (Note: The firm's marginal tax rate is 30%.)

Required -

(a) Calculate the current total market value of the company.

(b) Calculate the capital structure of the company.

(c) Calculate the weighted average cost of capital (WACC) for the firm.

(d) Discuss the significance of calculating WACC for this company.

Reference no: EM132844110

Questions Cloud

How many calories should she burn in each day : A girl who is weight 61kg and 157cm Hight has a belly and back fats. write a report about how can she get in shape with covering the requirement.
What bramble should record the bonds with a : On May 1, 2021, Bramble should record the bonds with a? On May 1, 2021, Bramble Corp. issued $1480000 of 8% bonds at 102, which are due on April 30, 2031.
Examine how to interpret the findings : The interpretation of research in health care is essential to decision making. By understanding research, health care providers can identify risk factors.
What swifty should record as a result of conversion a : What Swifty should record, as a result of this conversion, a? The total unamortized bond premium at the date of conversion was $276000.
Calculate the current total market value of the company : Debt: $20,500,000 paying 9.5% coupon bonds outstanding with 15 years to maturity, Calculate the current total market value of the company
Explain the type of work setting you are discussing : Explain the type of work setting you are discussing and whether interprofessional teams are currently present. If interprofessional teams are present.
What amount of total assets be reported on balance sheet : What amount of total assets would be reported on the balance sheet at the end of the year? Total liabilities on a balance sheet at the end of the year.
The legality of security work : Choose either public or private security and write a paper on the elements of negligent liability and the legal issues associated
Determine the interest rate you will pay : Determine the interest rate you will pay, if you are approved for a loan for $ 112,000 with annual payments of $ 15,000 over 8 years

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd