Reference no: EM131068878
Consider the following information for Evenflow Power Co.,
Debt: 5,000 6 percent coupon bonds outstanding, $1,000 par value, 23 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
Common stock: 105,000 shares outstanding, selling for $61 per share; the beta is 1.1.
Preferred stock: 16,000 shares of 5 percent preferred stock outstanding, currently selling for $105 per share.
Market: 7.5 percent market risk premium and 4.5 percent risk-free rate.
Assume the company's tax rate is 34 percent.
Required: Find the WACC. (Do not round your intermediate calculations.)
8.65%
8.15%
9.02%
8.35%
8.25%
|
Calculate the value of the treasury note
: Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with three years to maturity (TM) has a coupon rate of 5%. The yield of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of t..
|
|
Ordinary income and capital gains-tax effect of transaction
: A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent ..
|
|
Explain how you will ensure academic integrity
: You will conclude your toolbox document with a short reflection paper (of 2-3 pages) in which you note any remaining questions and concerns that you may have about becoming an effective scholarly writer, how you will use writing resources availabl..
|
|
Coupon bonds outstanding-common stock-preferred stock
: Debt: 5,000 6 percent coupon bonds outstanding, $1,000 par value, 23 years to maturity, selling for 103 percent of par; the bonds make semiannual payments. Common stock: 105,000 shares outstanding, selling for $61 per share; the beta is 1.1. Find the..
|
|
About the monthly loan payments
: Monthly Loan payments: Personal Finance Problem Tim Smith is Shopping for a used car. He found one priced at $5600. Assuming that Tim accepts the dealer offer, what will his monthly ( end of month) payment amount be? b. Use a financial calculator or ..
|
|
Environmental effects should be treated as sunk costs
: After discovering a new gold vein in the Colorado mountains, CTC Mining Corporation must decide whether to go ahead and develop the deposit. The most cost-effective method of mining gold is sulfuric acid extraction, a process that results in environm..
|
|
What is the percentage price change of bonds
: Bond J is a 7 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 12 years to maturity and have a YTM of 8 percent. a. If interest rates suddenly rise by 1.6 percent, what is the percentage price change of these bonds?
|
|
Calculate the estimated value of share
: Based on analysis of the company and expected industry and economic conditions, China imports is expected to earn 4.60 per share of common stock next year. The average price/earnings ratio for firms in the same industry is 8. Calculate the estimated ..
|