User Account

All Pages

Determine the weighted average cost of capital

Assignment Help Accounting Basics
Reference no: EM133115523

Question - A company has bank liabilities of $1,200,000 and equity of $800,000. The minimum rate of return required by investors is 14% and the bank interest rate is 12%. If the ISR rate is 33%, determine the weighted average cost of capital?

a. 10.42%

b. 5.60%

c. 7.20%

d. 23.76%

Reference no: EM133115523

Questions Cloud

What is morrit tie ratio : The Morrit Corporation has $630,000 of debt outstanding, and it pays an interest rate of 9% annually. What is Morrit TIE ratio
Financing and investing by firms : 1. List two (2) decisions each made for financing and investing by firms and its respective market's reaction (i.e. stock price increase or decrease).
Pricing a forward contract with dividends : The current price ofsilyer is $206 per ounce. The storage cost is $1 ounce per year, payable quarterly in advance. Assuming a constant annual interest rate of 9
Determine the dividends per share on each class of stock : The following amounts were distributed as dividends: first year, $31,000; second year, $74,000; Determine the dividends per share on each class of stock
Determine the weighted average cost of capital : The minimum rate of return required by investors is 14% and the bank interest rate is 12%. If the ISR rate is 33%, determine weighted average cost of capital
Calculate net cash flow : Calculate net cash flow - Increase in Accounts Receivable: 600 and Accumulated Depreciation: $1,000
Calculate the spending variances for March : The planning budget was based on the following assumptions: $206 per automobile per month for depreciation. Calculate the spending variances for March
What is the portfolio standard deviation : A portfolio consists of two securities: a T-bill and S&P/TSX Composite. The expected return on the T-bill is 2.9%. The expected return on Stock S&P/TSX Composit
What is the two-sigma upper control limit for c-bar : Over 10 days the manager recorded the number of calls to be 7, 3, 0, 8, 9, 6, 7, 4, 9, 8. What is the two-sigma upper control limit for c-bar

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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