Wedding and maternity clothing manufacturer

Assignment Help Financial Management

Reference no: EM131493198

Great Expectations, a wedding and maternity clothing manufacturer, has a cost of equity of 16 percent and a cost of preferred stock of 14 percent. Its before tax cost of debt is 12 percent, and its marginal tax rate is 40 percent Assume that the most recent balance sheet shown here reflects the optimal capital structure. Calculate Great Expectations after tax WACC.

Great Expectatios Balance Sheet

Dec 31, 2015

Cash 50,000

Accounts Recievable 90,000 Long Term Debt 600,000

Inventories 300,000 Preferred Stock 250,000

Plant and Equipment, net 810,000 Common Stock 400,000

Total Assets 1,250,000 Total Liabilities and equity 1,250,000

Reference no: EM131493198

Questions Cloud

What should be the size of these payments : If the effective annual interest rate is 7% what should be the size of these payments?

What is the primary insurance amount for social security : 1. What is the Primary Insurance Amount for Social Security? How is it calculated for the 2017 benefit year?

Write proposal that shows your plan for the risk assessment : Write a proposal of approximately 700 to 1050 words that show your plan for risk assessment project. Link risk categories to financial statement assertions.

What is the npv and irr : The cost of capital for this project is 12%. The tax rate for Marshall Heathcare is 40%. What is the NPV and IRR?

Wedding and maternity clothing manufacturer : Great Expectations, a wedding and maternity clothing manufacturer, has a cost of equity of 16 percent and a cost of preferred stock of 14 percent.

Companys target capital structure weight of debt : The companys target capital structure weight of debt is 35%. What would danzas cost of debt, rd, be if we were to use it in the aacc formula?

Determine the one-db compression point in terms velocity : A broadband circuit sensing an input V0 cos ?0t produces a third harmonic V3 cos(3?0t). Determine the 1-dB compression point in terms of V0 and V3.

What will be the value of the given investment : If a physician deposits $24,000 today into a mutual fund that is expected to grow at an annual rate of 8%, what will be the value of the given investment.

Methods of using stocks and options : Determine two to three (2-3) methods of using stocks and options to create a risk-free hedge portfolio can be created.

User Account

All Pages