Calculate the wacc of wtc for a price of wtc

Assignment Help Financial Econometrics

Reference no: EM13335598

The total book value of WTC's equity is $20 million and book value per share outstanding is $10. The stock of WTC is currently selling for a price of $25 per share and the beta of WTC is .85. The bonds of WTC have a face value of $36 million and sell at a price of 96 percent of face value. The yield to maturity on the bonds is 6.5 percent and the firm's tax rate is 35 percent. If the E(Rm) = 8% and Rf = 1%, calculate the WACC of WTC.

Reference no: EM13335598

Questions Cloud

Calculate the required rate of return to use in npv analysis : The company is considering an expansion to double the production of its current product. The company can issue equity or it can issue debt yielding 7% to pay for the expansion.

What was the budgeted cost of job : What was the budgeted cost of job lot #112 and what is the "normal" cost of job lot #112 - What is the "prime" cost of job lot #112

What is the overall rate of return on the portfolio : One year ago, an American investor bought 1000 shares of London Bridges at a price of £22 (or 22 UK pounds) per share when the exchange rate was $1.5/1£ (or $1.50 dollars = 1 pound).

Explain chemical equation for the neutralization reaction : Write a balanced chemical equation for the neutralization reaction upon which this titration is based, and indicate clearly which atom is being protonated

Calculate the wacc of wtc for a price of wtc : The total book value of WTC's equity is $20 million and book value per share outstanding is $10. The stock of WTC is currently selling for a price of $25 per share and the beta of WTC is .85.

How fast is the current in the river flowing : Two identical boats travel through still water at 3 m/s. They start from the same point on the bank of a river and travel the same distance from the starting point, How fast is the current in the river flowing

Explain the standard enthalpy change for the reaction : The standard enthalpy change for the reaction of 1.85 moles of CO(g) at this temperature would be -524 kJ. Ho = -506.5 + 344 * -173.1 divide it all by 1000= -566.0kj i dont understand how they got -566.0kj, when i put it in my calculator

What must the expected return on the market be : A stock has an expected return of 13 percent, its beta is 1.40, and the risk-free rate is 6 percent. What must the expected return on the market be

Prepare a merchandise purchases budget : Prepare a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June and compute the budgeted cash receipts for March. Rember to think in terms of when actual cash is planned to be received. I..

User Account

All Pages