Computing the wacc for acquisition

Assignment Help Business Management
Reference no: EM132347038

Random, Inc is considering the acquisition of a chain of cemeteries for $440 Million, Since the primary asset of this business is real estate, Random's management has determined that they will be able to borrow the majority of the money needed to buy the business, The current owners have no debt financing, but Random plans to borrow $340 Million and invest only $90 Million in equity in the acquisition. What weights should Random use in the computing the WACC for this acquisition?

Reference no: EM132347038

Questions Cloud

Calculate the net present value : Calculate the net present value. Calculate the profitability index. Calculate the internal rate of return.
What is the break-even volume : What would the total cost, total sales and profit (or loss) be for a weekly volume of 100,000 bars? What is the break-even volume?
Outstanding debt issues : Suppose the company's stock has a beta of 1.4. The risk-free rate is 3.4 percent and the market risk premium is 7.3 percent. Assume that the overall cost
What is the firm market value capital structure : What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .3216.)
Computing the wacc for acquisition : What weights should Random use in the computing the WACC for this acquisition?
Economic expansion or contraction : Explain why the Fisher Equation holds; that is, explain why the expectation of higher inflation leads to a higher nominal interest rate.
Compute the market value of the bonds : Compute the market value of the bonds How many bonds will the firm have to issue to receive the needed funds?
What equal annual payments must be made to discharge : What equal annual payments must be made to discharge the loan, plus pay the bank its required rate of interest?
What annual contributions to the retirement fund : What annual contributions to the retirement fund will allow you to receive the $20,000 annuity?

Reviews

Write a Review

Business Management Questions & Answers

  Economy turning around for the better

McDonald's did very well during the recession in the late 2000s. With the economy turning around for the better, should McDonald's change its strategy? Why or why not?

  Important player in the acquisition market

Private equity firms have become an important player in the acquisition market. These private investment groups offer to buy a target firm, often with the cooperation of management and then take the firm private.

  Fiscal policies while maintaining balanced budget

Can the government implement expansionary fiscal policies while maintaining balanced budget?

  Diploma mills on legitimate educational institutions

1) What is the impact of diploma mills on legitimate educational institutions? How does one check the credentials of learning institutions to verify legitimacy? What should one look for when selecting an institution of higher learning?

  Advantage to new firms in the globalised economy

Describe and analyse the factors identified in the Zahra article as giving competitive advantage to new firms in the globalised economy.

  Statute of frauds and work contractsjennifer masterson had

statute of frauds and work contractsjennifer masterson had been searching for a job since receiving her mba in

  Work in a team in an academic environment

You have the opportunity to work in a team in an academic environment. Determine what have been best practices of a team, and what are some areas of improvement?

  Leadership development coach

For the Session Long Projects you will also be applying the concepts from the background materials. But instead of applying them to yourself, you will imagine that you are a leadership development coach who is hired to by organizations to diagnosi..

  What are the average variable costs of firm

What are the average variable costs of this firm? $____________. (Round your answer to the nearest penny.)

  Which is a common shortcoming of company vision statements

Which of the following is a common shortcoming of company vision statements? How it will treat employees and customers and the importance the company places of teamwork.

  What is your competition

What is your competition? How much should you charge for the products or service? What advice do you need and who can provide it?

  Internal and external stakeholders

Based on the American "constitution," which internal and external stakeholders, in the policy making process, possess "constitutional legitimacy"

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