User Account

All Pages

Cost of capital after the recapitalization

Assignment Help Finance Basics
Reference no: EM132668442

Wyatt Fracking AB is a publicly traded company that is considering a restructuring plan. The company currently has 200 million shares trading at SEK 13/share and total debt outstanding of SEK 600 million. The firm currently has a (levered) beta of 2.16, the risk free rate is 1.9%, the market risk premium is 6% and the marginal tax rate is 40%.

The firm is planning to double its SEK debt and use the proceeds from the new debt to pay dividends & buy back stock. If it's bond rating will drop to BBB with a default spread of 2.5% over the risk free rate.

Question: Estimate the cost of capital after the recapitalization?

Reference no: EM132668442

Questions Cloud

Calculate the incremental free cash flow : Calculate the incremental free cash flow during the project's life (starting from year 0 to year 5). Show workings.
What is dollar amount of remaining performance obligation : In their December 31, 2020 Financial Statements, what is the dollar amount of remaining "performance obligations" that Luxury Vacation should report?
Discuss the character and treatment of the income : Gene is single and has no other income. Discuss the character and treatment of the income and losses generated by these activities
Determine whether Bonnie and Jake should file jointly : Because Jake has large medical expenses, they seek your advice about filing separately to save taxes. Determine whether Bonnie and Jake should file jointly
Cost of capital after the recapitalization : Wyatt Fracking AB is a publicly traded company that is considering a restructuring plan. The company currently has 200 million shares trading at SEK 13/share
Law and ethics are not the same : While related, law and ethics are not the same. The law establishes what individuals must do, while ethics describes what individuals should do.
What is arlington depreciation deduction : Arlington LLC purchased an automobile for $60,000 on July 5, 2020. What is Arlington's depreciation deduction for 2020 if business-use percentage is 59 percent
How should they treat the losses : Juan lost $18,000 in the real estate development business and $26,000 in the real estate rental business. How should they treat the losses
How much revenue will tier once construction report : On June 30, 2019, How much revenue will Tier Once Construction report on this contract for their Fiscal year ending December 31, 2020?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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