Two factors that determine company wacc

Assignment Help Financial Management
Reference no: EM131980744

Fundamentally, what are the two factors that determine a company’s WACC?

1. systematic risk of the company’s assets and the relative mix of individuals and large institutions that the company receives financing from

2. systematic risk of the company’s assets and the relative mix of debt and equity financing

3. total risk of the company’s assets and the relative mix of debt and equity financing

4. unique risk of the company’s assets and the relative mix of individuals and large institutions that the company receives financing from

5. unique risk of the company’s assets and the relative mix of debt and equity financing

Reference no: EM131980744

Questions Cloud

What is weighted average cost of capital for firm : The current stock price for company is $47 per share and there are 4 million shares outstanding. what is Weighted Average Cost of Capital (WACC) for this firm?
What are the net cash flows of the project each year : Assume that the tax rate is 35 percent and the required return on the project is 7 percent. What are the net cash flows of the project each year?
The euro futures contract instead for hedge : Would the U.S. company have done better getting options on the Euro futures contract instead for this hedge? Explain why or why not
What is net profitability in dollars : The total income generated from their investments was $180,000 after all expenses were paid. What is the net profitability in dollars?
Two factors that determine company wacc : Fundamentally, what are the two factors that determine a company’s WACC?
What is the smallest expected loss for your portfolio : What is the smallest expected loss for your portfolio in the coming month with a probability of 16.0 percent?
Bond pays annual interest : A bond pays annual interest. Its coupon rate is 11.2%. Its value at maturity is $1,000. It matures in 4 years. Its yield to maturity is currently 8.2%.
Stock according to dividend discount constant growth model : A decrease in which of the following will increase the estimated value of a stock according to the dividend discount constant growth model?
There are no other assets funding the plan : How much of its portfolio should it allocate to the zero-coupon bonds to immunize if there are no other assets funding the plan?

Reviews

Write a Review

Financial Management Questions & Answers

  What was percentage increase per year in winners check

What was the percentage increase per year in the winner’s check over this period?

  Calculate your profit from purchasing the call option

If you purchased a call option covering 100 shares and the price at maturity was $170, calculate your profit (loss) from purchasing the call option.

  What is present value of its growth opportunities

Sisters Corp expects to earn $7 per share next year. The firm’s ROE is 14% and its plowback ratio is 60%. If the firm’s market capitalization rate is 10%. Calculate the price with the constant dividend growth model. Calculate the price with no growth..

  Required rate of return and current risk- free rate

You have been manageing a $ 5 million portfolio that has a beta of 1.25 and required rate of return of 12 %. the current risk- free rate is 5.25%.

  Minimizes the discounted lifecycle costs of the actuator

What is optimal torque design of the actuator that minimizes the discounted lifecycle costs of the actuator?

  Sales and the operating income for each of the given years

Calculate the degree of operating leverage given the following information: sales of $25,000; variable costs of $15,000; and operating income of $16,000 for year 2. Your answer should be rounded to two decimal places.(For this problem, specifically c..

  What is price and earnings ratio

A company has an EPS of $1.80, a book value per share of $17.46, What is its Price/Earnings Ratio

  Annual market share of the acme widget company

calculate the annual market share of the Acme Widget Company for each year.

  Explain how decreases in the cost of capital

Compute the NPV statistic for Project Y and tell [advise] whether the firm should accept or reject the project with the cash flows shown in the chart if the appropriate cost of capital is 12 percent. Distinguished-level: Explain how decreases in the ..

  Budget Preparation and Incremental Analysis

Incremental Analysis-Budget Preparation-The Lees believe that there production could quadruple in one month after being on Shark Tank.

  Calculate net present value of loan including flotation cost

Daniel Kaffe, CFO of Kendrick Enterprises, is evaluating a 10-year, 5.90 percent loan with gross proceeds of $5,970,000. The interest payments on the loan will be made annually. Calculate the net present value of the loan excluding flotation costs. C..

  What is the price of the convertible bonds

The bonds of goniff bank and trust have a conversion premium of $38. Their conversion price is $15. The common stock price is $13.20. Assume each bond has $1,000 par value. What is the price of the convertible bonds?

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