User Account

All Pages

Compute xyz equity cost of capital

Assignment Help Accounting Basics
Reference no: EM132998989

Question - XYZ Corp. has a market debt-equity ratio of 0.50. Its current debt cost of capital is 6.5%, and its current equity cost of capital is 14%. XYZ issues equity and uses the proceeds to repay its debt. As a result, its debt-equity ratio reduces to 0.40 and it is able to lower its debt cost of capital to 5.75%. Assume perfect capital markets. Compute XYZ's equity cost of capital after XYZ issues equity and uses the proceeds to repay its debt.

Reference no: EM132998989

Questions Cloud

Explain total lumpsum amount : Two years ago, Adam invested $X in a fund that pays 7% per year. Based on his calculation, his investment will give him a total lumpsum amount of $17,000 five y
Compute the predetermined overhead rate : The firm's actual overhead cost for the year was $615,000 and its actual total direct labor was 77,350 hours. Compute the predetermined overhead rate
Find the missing values for the t-bonds : The U.S. government issues T-bonds. For many such issues, investors are allowed to purchase either the series of coupon payments or final principal payments.
Calculate the before-tax interest expense savings : Calculate the before-tax interest expense savings from lowering the WCR. By implementing best in practice short-term financial management.
Compute xyz equity cost of capital : Assume perfect capital markets. Compute XYZ's equity cost of capital after XYZ issues equity and uses the proceeds to repay its debt
What the amount of net cash used in financing activities : Bramble Corp. had activities. What the amount of net cash used in financing activities to appear in Bramble's statement of cash flows for 2021 should be?
What is manufacturing overhead made up of : What is manufacturing overhead made up of? All costs of manufacturing, less direct labour and direct materials./ All costs of manufacturing, less direct labour
Prepare a monthly manufacturing overhead ?exible budget : Prepare a monthly manufacturing overhead ?exible budget for 2020 for the expected range of activity, using increments of 1,800 direct labor hours
Which would be a period cost for aitkens : Aitkens Incorporated is a manufacturing company located in Laval, which makes high-class widgets. Which of the following would be a period cost for Aitkens?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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