Calculate the weighted cost of capital of the company

Assignment Help Business Management
Reference no: EM132828347

Company X has 1.1 million shares of its common stock outstanding, which is priced at $60 per share. The stock beta is estimated at 1.2. The risk-free rate is 4% and the market risk premium is 7%. In addition, the company's 9%, $50 million par value, 20 years, BBB-rated semiannual coupon bonds are priced at 120% of its par value. The par value of each bond is $1,000.

Calculate the weighted cost of capital of the Company.

Question is complete.

Reference no: EM132828347

Questions Cloud

Which discoveries by the auditor would not raise red flag : Which discoveries by the auditor would not raise the red flag of increased inherent risk? A bond indenture requires a current ratio of at least three to one
Estimate of the company cost of equity : If the stock sells for $32 per share, what is your best estimate of the company's cost of equity?
What is the present value today of the estate donation : You are advising a couple who is 35 years of age. What is the present value today of the $120,000 estate donation expected 10 years from now?
How appropriate were the various sampling design decisions : Describe the sampling strategy. How appropriate were the various sampling design decisions? What, if any, problems did you find with the questionnaire.
Calculate the weighted cost of capital of the company : Company X has 1.1 million shares of its common stock outstanding, which is priced at $60 per share. The stock beta is estimated at 1.2.
Discuss aircraft firefighting challenges : Discuss aircraft firefighting challenges - include aircraft engine fires on the ground, jet (turbine) powered aircraft engine fires, wheel fires, and strategies
Make all necessary journal entries : On December 31, 2014, independent appraisers determined that the asset has a fair value of P3,750,000. Make all necessary journal entries
Calculate the depreciation expense of the equipment : Calculate the depreciation expense of this equipment each year and prepare the journal entry for the year ending 30 June 2020.
What is the current bond price-weismann co : The bonds make semi annual payments and have a par value of 1,000. if the YTM on these bonds is 9 percent, what is the current bond price?

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

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