User Account

All Pages

Total market value of the firm-western electric

Assignment Help Finance Basics
Reference no: EM132546764

Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.

Required:

a) Calculate the total market value of the firm.

b) Calculate the capital structure of the firm. (Please round up the result at 3 decimal places)

c) Calculate the firm's weighted average cost of capital if the tax rate is 30%, assuming a classical tax system.

Reference no: EM132546764

Questions Cloud

What is the current market price of the bonds : The current market rate of interest on the Fresh Water, Inc. bonds is 12.48 percent. What is the current market price of the bonds? Round the answer to two deci
Calculate transfer price if base on standard absorption cost : Frame Division is 125 percent of direct labor cost. Calculate the transfer price if it is based on standard absorption cost plus a 10 percent markup.
Calculate the current value of the firm equity : The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in the current year is $250,000. The company
ELEC 20009 Antenna Theory and Communication System : ELEC 20009 Antenna Theory and Communication System Assignment Help and Solution, Middle East Countries - Assessment Writing Service
Total market value of the firm-western electric : Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares
Prepare an amortization schedule proving the price : On January 1, 2020, ABC Corp. acquired 8%, $ 100,000 (face value) bonds of DEF Ltd., Prepare an amortization schedule proving the price
Make the necessary adjusting entries on december : The value of office equipment was recorded at Rp176,200,000. Make the necessary adjusting entries on December 31, 2015
What is the pre-tax cost of the company debt : What is the pre-tax cost of the company debt if weighted average costs of the company is 13.5% and the firm's tax rate is 35 percent?
Calculate zap return on sales : Calculate Zap's Return on Sales, Investment Turnover and Return on Investment. Zap is a retailer that specialises in electrical goods.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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