Debt-equity ratio-what is the initial cost of the plant

Assignment Help Financial Management

Reference no: EM131933896

Sheaves Corp. has a debt−equity ratio of .85. The company is considering a new plant that will cost $117 million to build. When the company issues new equity, it incurs a flotation cost of 8.7 percent. The flotation cost on new debt is 4.2 percent.

What is the initial cost of the plant if the company raises all equity externally? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.)

Initial cash flow $

What is the initial cost of the plant if the company typically uses 65 percent retained earnings? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.)

Initial cash flow $

What is the initial cost of the plant if the company typically uses 100 percent retained earnings? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.)

Initial cash flow $

Reference no: EM131933896

Questions Cloud

What is the total amount you have to spend on the russell : What is the total amount you have to spend on the Russell 300 at-the-money puts to protect GAC’s portfolio from loss if you have 500 shares of GAC.

What is its pretax cost of debt and cost of equity : If the company’s cost of equity is 15 percent, what is its pretax cost of debt? what is the cost of equity?

What is the purpose of an administrative agency : What is an administrative agency? What is the purpose of an administrative agency?

Seller of the boat can hedge the above contract : Explain the currency risk you are taking with this contract. Describe (in general) 2 ways the seller of the boat can hedge the above contract

Debt-equity ratio-what is the initial cost of the plant : What is the initial cost of the plant if the company raises all equity externally?

Replacing machine-calculate the initial outlay : Riordan Manufacturing Company is considering replacing a machine. calculate the initial outlay.

Cash flows over the life of the project are reinvested : The internal rate of return method assumes that the cash flows over the life of the project are reinvested at

What is the stock price at the end of year four : Central Development Company just paid a dividend of $3.00 per share. what is the stock’s price at the end of year 4?)

What is the price per share of the company stock : What is the price per share of the company's stock?

User Account

All Pages