User Account

All Pages

Cost of equity after recapitalization and wacc

Assignment Help Finance Basics
Reference no: EM131913129

Co. expects its EBIT to be $57,000 every year forever. The firm can borrow at 9% and has no debt, cost of equity is 13%, tax is 35%. Assume the company borrows $157,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization and WACC? Do not round calculations

Reference no: EM131913129

Questions Cloud

What will joshs bank balance be 5 years after the original : What will josh's bank balance be 5 years after the original deposit was made?
Cretae a contribution format income statement for the month : Assume that the company uses variable costing. Determine the unit product cost. Cretae a contribution format income statement for the month.
What growth rate could be supported with no outside : What growth rate could be supported with no outside financing at all? (in %)
What is the present value of the project cash : What is the present value (at time 0) of the project's cash flows if the opportunity cost of capital is 9%?
Cost of equity after recapitalization and wacc : What is the cost of equity after recapitalization and WACC? Do not round calculations
Determine the relative proportion of liabilities and equity : Determine the relative proportion of liabilities and equity. Determine the relative proportion of short-term and long-term assets.
Computing weighted average cost of capital : The weighted average cost of capital is 9 percent. The current market value of the equity is $22 million and the corporate tax rate is 35 percent.
How much money would have been in the account in 1992 : In 1492, Queen Isabella sponsored Christopher Columbus journey by giving him $10,000. If she had placed this money in a bank account.
What is meant by the terms net realizable value : What is meant by the terms net realizable value? How do accountants determine the net realizable value of receivables? Why is this amount important?

Reviews

Write a Review

Finance Basics Questions & Answers

  How does government regulation affect a banks expansion in

question 1 how does government regulation affect a banks expansion in the global market? what are the possible

  What is the company expected growing rate

The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $3, and the current stock price is $35.

  Determine what roi you would have received on bonds

Note its YTM and use it to determine what ROI you would have received on bonds with them. You are welcome to use any other route to get the bond ROI.

  Bank evaluation process

Assume that you are nearing graduation and have applied for a job with a local bank. The bank's evaluation process requires you to take an examination that covers several financial analysis techniques.

  Three balls of the same color

How many balls must she select (minimum) to be sure of having at least three balls of the same color?

  Return on investment-education funding

Develop a three- to four-page analysis (excluding the title and reference pages) on the projected return on investment for your college education and projected future employment. This analysis will consist of two parts:

  What is the yield to maturity

The current price is quoted at 98.59 percent of par value. Assume semi-annual payments. What is the yield to maturity?

  What price should be set under full cost pricing

Assume a clinical laboratory is considering a new test. Here are the key assumptions: annual fixed direct costs = $40,000, annual overhead allocation = $10,000, variable cost per test = $8, and expected volume = 10,000 tests. What price should be ..

  Calculating debt ratio

The Altman Corporation has a debt ratio of 33.33%, and it needs to raise $100,000 to expand. Management feels that optimal debt ratio would be 16.67%.

  What is the price of 1 million ounces of gold produced

What is the price of 1 million ounces of gold produced in eight years? Assume that gold prices have a beta of 0 and that the risk-free rate is 5.5%.

  Describe some risks that affect bond prices

Risks and Bonds- Message expanded.Message readRisks and Bonds. Describe some risks that affect bond prices. Consider default risk, liquidity risk, and other risks discussed in the text.

  Distribution possibilities

Determine which of the distribution possibilities except.

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