User Account

All Pages

Calculate the wacc using market value

Assignment Help Finance Basics
Reference no: EM133062560

The current market value of Geraldo Auto Design's long-term debt is $350,000. The common stock price is $20 per share and there are 30,000 shares outstanding. Assume an after-tax cost of new debt of 8.63 percent and a cost of common equity of 16.5 percent. Calculate the WACC using market value weights and the component capital costs.

Reference no: EM133062560

Questions Cloud

Minimize the size of monthly payment : -Why is it not reasonable to extend the life of your loan to minimize the size of your monthly payment?
What is the crossover rate for the projects : What is the crossover rate for the projects below:Project A: CF0 = -$3000, CF1=$1200, CF2=$1600, CF3=$3500 Project B: CF0 = -$3000, CF1=$2500, CF2=$1600, CF3=$2
What is tds : Q1. Bob and Sally would like to apply for a mortgage. They are purchasing a house for $525,000 and have $125,000 as a down payment.
Determine the optimal hedge ratio : Big Bank, Inc. has a portfolio of Treasury bonds worth $1,000,000 with a modified duration of 16.5 and is concerned that a change in interest rates will negativ
Calculate the wacc using market value : Calculate the WACC using market value weights and the component capital costs.
What is the initial cost : You are thinking of buying a European put option on shares in a company called ABC. The current price of one ABC share is $30, and over the next month the share
Explain the penny purchase price : Penny bought a Treasury bond with a coupon rate of j2 =2.42% p.a. and face value of $100. The bond will mature on 15 October 2028. Penny purchased this bond on
Find the price of the option : A dividend of $1 is expected after 3 months and again after 6 months. Use Black-Scholes formula to find the price of the option.
Average weighted cost of capital : 1. Is the cost of equity for a company with no debt equal to the average weighted cost of capital (WACC)? Please explain.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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