Calculate the wacc of abc company

Assignment Help Business Management
Reference no: EM132710187

ABC company has bond outstanding of 100,000 selling at par. Similar bonds in the market have a yield rate of 7.5%. In its capital structure, the company also has 5 million common shares outstanding and one million preference shares outstanding of 10.5%. The systematic risk of the firm is 1.2 and has a stock price of $38. Preferred shares are trading in the market at a price of $56 per share. The market return is 12 percent, and the risk-free rate is 3 percent.

Required

Calculate the WACC of ABC company.

Reference no: EM132710187

Questions Cloud

Calculate the breakeven point makes at the expiration date : Assuming the stock price at expiration is $25.50, calculate the breakeven point, profit, or loss, the option holder makes at the expiration date.
Calculate the consolidated profit for the group for the year : The combined profit of Rome Ltd and Carthage Ltd, Calculate the consolidated profit for the group for the year ending 31 December 2018
What are total credits entered in the raw materials account : At the beginning of December, the corporation had $32,000 of raw materials. What are the total credits entered in the Raw Materials account during December?
Find how to record in financial statement : During the year ended 30 June 2009 Adeje Ltd decided to buy back some of its ordinary shares. How to record this in financial statement?
Calculate the wacc of abc company : ABC company has bond outstanding of 100,000 selling at par. Similar bonds in the market have a yield rate of 7.5%. In its capital structure, the company
How changes in working capital can be a source of cash : Discuss the relationships among the different financial statements. What is free cash flow?
Find how to record in financial statement : During the year ended 30 June 2009 Adeje Ltd decided to buy back some of its ordinary shares. How to record this in financial statement?
Calculate the value of a six-month european call option : Calculate the value of a six-month European call option on the stock with an exercise price of $45, using binomial model and (a) no-arbitrage argument
Determine what are the journal entries for the transactions : Sunny Corporation was organized on January 2, 2018 with 100,000 ordinary shares. What are the journal entries for the above transactions?

Reviews

Write a Review

Business Management Questions & Answers

  Create an e-portfolio using a software tool named mahara

In this assessment, you have to create an e-portfolio using a software tool named Mahara. You need to make it private with a secret URL for marking purposes

  Show pam and baseband signal transmission have equal snrs

By considering a full-load sinusoidal modulating wave, show that PAM and baseband-signal transmission have equal SNRs for the same average transmitted power.

  Movement along and shift of the demand curve

What is the difference between a movement along and shift of the demand curve? Show the affect on the equilibrium price and quantity that result from:(1) an increase in demand,(2) an increase in supply, and(3) an increase in both supply and demand..

  What is the responsibility of the organizations board

ORG-812: Discussion Question- What is the responsibility of the organization's board when a leader is acting in an unethical manner but the company is profitable?

  What makes real estate different from all other commodities

What makes real estate different from all other commodities

  Identify the historical circumstances of the case

Please select two Supreme Court cases that have influenced American society. For each case:

  Managing dynamic environment

Two principle impediments to effective and lasting organizational change are structures and systems within the organization.

  What forms of compensations are given out

Are they in form of cash, deffered cash, stocks or a combination? Kindly please explain why they are prefered over the others.

  Brief overview of your strategic communications plan

Provide a brief overview of your Strategic Communications Plan. Include a short description for each of the following in bullet point format:

  Skaters park under common law negligence

Could Jon possibly have a legal claim against Skaters Park under common law negligence? Why or why not?

  Certain methods you can use to move

There are certain methods you can use to move from one run level to the next. Explain how /etc/inittab file and specific commands are used to manage runlevel

  Define maximize the value of the selected shipment

The load master for a freighter wants to determine the mix of cargo to be carried on the next trip. The ship's volume limit for cargo is 100,000 cubic meters, and its weight capacity is 2,310 tons. The master has five different types of cargo from..

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