Target debt-equity ratio and cost of debt

Assignment Help Financial Management

Reference no: EM13953860

Lannister Manufacturing has a target debt−equity ratio of .45. Its cost of equity is 13 percent, and its cost of debt is 7 percent. If the tax rate is 34 percent, what is the company’s WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

WACC %

Reference no: EM13953860

Questions Cloud

Annual rate of return on this sculpture : Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction house sold a sculpture at auction for a price of $10,261,500. Unfortunately for the previous owner, he had purchased it in..

What is the total amount invested by all stockholders : On January 29, Quality Marble Inc., a marble contractor, issued for cash 75,000 shares of $10 par common stock at $23, and on May 31, it issued for cash 100,000 shares of $4 par preferred stock at $6. a. Illustrate the effects on the accounts and fin..

Risk-free rate have to for two stocks to correctly priced : Stock Y has a beta of .9 and an expected return of 12.6 percent. Stock Z has a beta of .6 and an expected return of 8.9 percent. What would the risk-free rate have to be for the two stocks to be correctly priced?

What must the beta of this stock be : A stock has an expected return of 14 percent, the risk-free rate is 6 percent, and the market risk premium is 10 percent. What must the beta of this stock be?

Target debt-equity ratio and cost of debt : Lannister Manufacturing has a target debt−equity ratio of .45. Its cost of equity is 13 percent, and its cost of debt is 7 percent. If the tax rate is 34 percent, what is the company’s WACC?

Outstanding debt issues-both bonds make semiannual payments : Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $75, and the book value per share is $6. The company also has two bond issues outstanding. Suppose the most recent dividend was $4.70 and the dividend growth ..

How much must you invest today : Suppose you are committed to owning a $207,000 Ferrari. If you believe your mutual fund can achieve a 13 percent annual rate of return and you want to buy the car in 10 years on the day you turn 30, how much must you invest today?

What was his annual rate of return on this sculpture : Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction house sold a sculpture at auction for a price of $10,331,500. Unfortunately for the previous owner, he had purchased it in..

Eligible to claim the deduction for the interest paid : Sandra is legally responsible for her qualified student loans, but her grandparents make the monthly payments. Sandra is not claimable as anyone's dependent. Who is eligible to claim the deduction for the interest paid on Sandra's student loans?

User Account

All Pages