Calculate your company WACC

Assignment Help Accounting Basics
Reference no: EM132995037

Question - Your company is asking you as a CFO to consider your capital costs for your long term investment projects. As you collect the recent capital information as the follows:

Your company issue the common shares of Cnd$100/share, 2 million shares outstanding; Your company Beta is 1.7 and market risk-free rate is 2% at this moment and expected market return is 7%;

Your company issue the bond at the current quote of 970; Your coupon payment rate is 7%, while payment term is semi-annual; the bond tenor is 14 years; Your bond face value is 250million;

Your company also issue some preferred stocks at cnd$70/share, with dividend payment of cnd7/share, the total amount of issue is 100million;

Your corporate tax rate is 27%; Please calculate your company's WACC?

Reference no: EM132995037

Questions Cloud

What is the size of each of the three payments : A loan of $1395 taken out on June 7 requires three payments. The first payment is due on July 7. What is the size of each of the three payments
Why would lawyers benefit from working closely : Why would lawyers benefit from working closely with public relations counsel? For litigation? For dispute resolution through effective negotiation?
What is the amount if you pay for the washing machine today : The store is willing to discount the price at an annual rate of 2.0 percent. What is the amount if you pay for the washing machine today
Analyze the ethical facets of a termination decision : Analyze the ethical facets of a termination decision. (Make sure to reference an ethical framework to support your assertions or positions.)
Calculate your company WACC : Your company Beta is 1.7 and market risk-free rate is 2% at this moment and expected market return is 7%; Calculate your company WACC
Prepare an income statement for the shop : The owner of a bicycle repair shop forecasts revenues of $220,000 a year. Prepare an income statement for the shop
How much is the size of each withdrawal : At the end of three years, he was able to withdraw equal amounts at the end of each six months for four years. How much is the size of each withdrawal
Success of an acquisition : Using the Internet, research acquisitions that are currently underway and choose one of these acquisitions to discuss. Based on the firms' characteristics and e
How did the explained power and risk translated : How did the explained Power & Risk translated into contractual terms and Identify type/sources of Power and Risk in the relation to this contract

Reviews

Write a Review

Accounting Basics Questions & Answers

  Capital stock is sold at an amount greater than stated value

Capital stock is sold at an amount greater than stated value.

  How much of the liability should be paid by each partner

Jake and Sacha are general partners and Brianne is a limited partner. How much of the remaining $48,000 liability should be paid by each partner

  The cfo of pqr inc was advised by his creditmanager to give

the cfo of pqr inc. was advised by his creditmanager to give better credit terms to new customers to inducesales. the

  What is the future value in five years

What is the future value in five years of $1,500 invested in an account with an annual percentage rate of 10 percent, compounded annually

  Should roi be the only gauge a company uses to evaluate

should roi be the only gauge a company uses to evaluate investments? also is it wise for a company to lose money on one

  Prepare accrual basis journal entries for each transaction

It operates several restaurants and rents townhouses to vacationing skiers, Prepare accrual basis journal entries for each transaction

  Preparing schedule indicating cash collections of accounts

The company expects to sell 20% of its merchandise for cash. Of sales on account, 50% are expected to be collected in the month of the sale, 30% in the month following the sale, and the remainder in the following month. Prepare a schedule indicati..

  What is the carrying amount of the loan receivable

Philippine Bank granted a loan to a borrower on January 1, 2020. What is the carrying amount of the loan receivable on December 31, 2021

  What does weller have to gain by advocacy

Which stakeholders might be affected by the decision against early implementation? (CMA adapted)

  Compute of break-even point in sales

This question belongs to Basic Accounting and it discusses about compute of break-even point in sales

  How management accounting information

Provide four examples of how management accounting information can be used to support a sustainability approach. (e.g. Including in product costs

  Comment on whether a lower assessed level of control risk

Comment on whether a lower assessed level of control risk approach or a predominantly substantive approach be more appropriate for this account

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