Compute the weighted average cost of capital of the firm

Assignment Help Financial Management

Reference no: EM131551121

A firm has a capital structure with $8 in equity and $8 of debt. The cost of equity capital is 0.19 and the pretax cost of debt is 0.06. If the marginal tax rate of the firm is 0.27 compute the weighted average cost of capital of the firm. Round to four decimal places. Give answer in decimal form without commas or dollar signs. __________

Reference no: EM131551121

Questions Cloud

As a business leader for an organization : As a business leader for an organization, would you change any factors that are associated with sales allowance and sales discount?

Companies are more reluctant to overpay : Because of that Accounting Standard, companies are more reluctant to "overpay" to buy another company because:

What is net present value of the project : If the issuance costs for external finances are $9 million, what is the net present value (NPV) of the project?

He outstanding shares of publicly held company : Once a company acquires 5% of the outstanding shares of a publicly held company, it must:

Compute the weighted average cost of capital of the firm : If the marginal tax rate of the firm is 0.27 compute the weighted average cost of capital of the firm.

Require the targets shares to be bought out : The only method of gaining control of a public company which does not require the target's shares to be bought out is a(n):

Make it much more valuable in terms stock price : they are competitors and Jervis believes it can run Conner in such a way to make it much more valuable in terms stock price.

Calculate the stock expected return : Below average 0.2 -6 Average 0.4 17 Above average 0.2 20 Strong 0.1 50 1.0 Calculate the stock's expected return.

What would aftertax cost of debt be : what would the aftertax cost of debt be, based on their cost last year and the 20 percent increase?

User Account

All Pages