Weight used for equity in the computation of Sports WACC

Assignment Help Financial Management

Reference no: EM13941921

Sports Corp has 10.3 million shares of common stock outstanding, 5.3 million shares of preferred stock outstanding, and 1.3 million bonds. If the common shares are selling for $25.3 per share, the preferred share are selling for $12.8 per share, and the bonds are selling for 96.97 percent of par, what would be the weight used for equity in the computation of Sports's WACC?

Which of the following is correct?

a.) 60.95%

b.) 16.40%

c.) 33.33%

d.) 19.62%

Reference no: EM13941921

Questions Cloud

Interests on corporate debts are tax-deductible : All firms can issue debts if their asset values are sufficient enough. In particular, the values of the firms will always increase as they raise more debts since interests on corporate debts are tax-deductible. One of the drawback of Net Present Valu..

Discuss the reasons behind the new expansionism : Discuss the reasons behind the new expansionism that characterized US foreign policy in the 1890s?

What is the underwriters spread per share on the issue : Calculating Costs of Issuing Stock Paige's Purses, Inc. needs to raise $25.20 million to finance plant expansion. In discussions with its investment bank, Paige's learns that the bankers recommend an offer price (or gross proceeds) of $52 per share a..

What is the possible dividend per share for common stock : Company Wii gives you the following information for its operation. The expected income available for dividends is $42 million next year before the firm has any debts. Suppose there is a 25% corporate income tax imposed on the company. What is the pos..

Weight used for equity in the computation of Sports WACC : Sports Corp has 10.3 million shares of common stock outstanding, 5.3 million shares of preferred stock outstanding, and 1.3 million bonds. If the common shares are selling for $25.3 per share, the preferred share are selling for $12.8 per share, and ..

China has been managing its exchange rate : Has the range been similar to the change in exchange rate in say the dollar vs. the euro over the same ten years? Do you think China has been managing its exchange rate?

What will be the after-tax cash flow of this sale : Suppose you sell a fixed asset for $111,000 when it's book value is $127,000. If your company's marginal tax rate is 35%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

Expected return on the market-cost of equity : B24&Co stock has a beta of 1.50, the current risk-free rate is 3.00 percent, and the expected return on the market is 10.50 percent. What is B24&Co's cost of equity?

What would the firms payout ratio be : Suppose a firm pays total dividends of $330,000 out of net income of $2.8 million. What would the firm's payout ratio be?

User Account

All Pages