Common stock-what is its WACC

Assignment Help Financial Management

Reference no: EM131062885

Shi Importers' balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 30%, rd = 6%, rps = 7.1%, and rs = 12%. If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is its WACC? Round your answer to two decimal places.

Reference no: EM131062885

Questions Cloud

What is the firm after-tax component cost of debt : A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $565.86. The company's federal-plus-state tax rate is 30%. What is the firm's after-tax component cost of debt for purposes of calculat..

Auto insurance coverage : Kurt Simmons has 80/150/15 auto insurance coverage. One evening he lost control of his vehicle, hitting a parked car and damaging a storefront along the street. What amount will the insurance company pay for the damages? What amount will Kurt have to..

How much of this judgment would the insurance cover : Becky Fenton has 70/140/80 automobile insurance coverage. If two other people are awarded $115,000 each for injuries in an auto accident in which Becky was judged at fault, how much of this judgment would the insurance cover?

What is the expected return on this stock : The stock of Wiley United has a beta of 0.92. The market risk premium is 8.6 percent and the risk-free rate is 3.2 percent. What is the expected return on this stock?

Common stock-what is its WACC : Shi Importers' balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 30%, rd = 6%, rps = 7.1%, and rs = 12%. If Shi has a target capital structure of 30% debt, 5% preferre..

Cost of common equity-common stock is currently trading : Summerdahl Resorts' common stock is currently trading at $21.00 per share. The stock is expected to pay a dividend of $1.50 a share at the end of the year (D1 = $1.50), and the dividend is expected to grow at a constant rate of 5% a year. What is the..

What is the current value of this bond : Diane is interested in buying a five-year zero coupon bond with a face value is $1,000. She understands that the market interest rate for similar investments is 9 percent. Assume annual coupon payments. What is the current value of this bond?

Purpose of the coinsurance in both types of insurance : Coinsurance clauses are found in many property policies as well as in many health insurance policies, although the purpose of each is vastly different. Explain the purpose of the coinsurance in both types of insurance.

Most common homeowners insurance policy : The most common Homeowners’ Insurance Policy is the HO-3. This policy consists of two basic parts, Section I and Section II. Please define each of the six coverages and provide an example of a claim that would be covered in each.

User Account

All Pages