Name three factors that affect the cost of capital

Assignment Help Basic Statistics
Reference no: EM132951696

When calculating a company's WACC, should book value, market value, or target weights be used? Explain. Suppose Firm A plans to retain $100 million of earnings for the year. It wants to finance its capital budget using a target capital structure of 46% debt, 3% preferred, and 51% common equity. How large could its capital budget be before it must issue new common stock?

A company has outstanding 20-year noncallable bonds with a face value of $1,000, an 11% annual coupon, and a market price of $1,294.54. If the company was to issue new debt, what would be a reasonable estimate of the interest rate on that debt? If the company's tax rate is 40%, what is its after-tax cost of debt?

Name three factors that affect the cost of capital and that are beyond the firm's control.

Reference no: EM132951696

Questions Cloud

What will be the resulting percentage change in ebit : The average selling price for one of their swim trunks is $76.24. What will be the resulting percentage change in EBIT if they expect units sold to changes
What annual carrying cost of cheese inventory for cheese co : The company is using Economic Order Quantity model in placing the orders. What is the annual carrying cost of cheese inventory?
Make the system profitable for sussex : Sussex Inc., a large fertilizer distributor based in Nova Scotia, is planning to use a lockbox system to speed up collections from its customers located on the
What is the annual total inventory management cost of cheese : The company is using Economic Order Quantity model in placing the orders. What is the annual total inventory management cost of cheese inventory?
Name three factors that affect the cost of capital : Name three factors that affect the cost of capital and that are beyond the firm's control.
What is the project IRR : A project has an initial cost of $45,000, expected net cash inflows of $9,000 per year for 9 years, and a cost of capital of 10%. What is the project's IRR
What is the annual ordering cost of the maps inventory : The carrying cost is $0.21 per maps per year. The ordering cost is $411 per order. What is the annual ordering cost of the maps inventory?
What is yield to call on bond : Brandi owns a 5% coupon rate callable bond that can be called in 8 years with a 3% call premium. What is her yield to call on this bond, assuming she just paid
What is the average daily float for the company : Given a 30 day month, what is the average daily float for this company? The XYZ Company had divided its monthly check collections into 3 batches.

Reviews

Write a Review

Basic Statistics Questions & Answers

  Find a printed article using data

Find a printed article using data that are subject to a bias that could have a dra~ marie effect on the conclusions reached in the article.

  A psychologist wants to determine if there is a linear

a psychologist wants to determine if there is a linear relationship between the number of hours a person goes without

  Explanation of hypothesis testing of population proportion

The researcher estimated that out of the 100 students at least 50% of the students would be exposed to movies and TV w/ crude humor at least 2-4 times per week.

  Determine the optimal parameter a in the ses method

Implement the SES and DES formulae on a spreadsheet program, and use it to determine the optimal parameter a in the SES method giving the best MAPD8 error on the time-series of the previous exercise.

  Normal distribution with a mean

Suppose that the diameters of the holes in the nuts in another large box follow a normal distribution with a mean of 2.02 centimeters

  Link found between breast feeding and school performance

Which of these two alternative headlines do you think would be preferable: "Breast-feeding leads to better school performance" or "Link found between breast-feeding and school performance"? Explain.

  How tall do you predict their son to be

If a mother and father are 73 and 80 inches tall, respectively, how tall do you predict their son to be? Explain why this is called "regression toward the mean."

  Participants that milgram used in the original study

Given the infamous study and the negative attention it received, current researchers doubt that current (and more knowledgeable) participants

  Drink independent of ordering a square pizza

Suppose 59 percent of the customers at Pizza Palooza order a square pizza, 73 percent order a soft drink, and 40 percent order both a square pizza and a soft

  Development of western europe

How did the barbarian invaders contribute to the development of western Europe following the rule of Charlemagne?

  Find the insurance company expected profit per policyholder

A health insurance company charges policyholders a $1250 annual premium for health insurance for hospitalization. Find the insurance company's expected profit per policyholder

  Construct the appropriate control chart using sample data

Use the sample data to construct the appropriate control chart(s). Does the process appear to be in statistical control?

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd