Weighted average cost of capital for this firm

Assignment Help Financial Management
Reference no: EM131063521

The current stock price for a company is $40 per share, and there are 3 million shares outstanding. The beta for this firms stock is 1.2, the risk-free rate is 4.7, and the expected market risk premium is 5.9%. This firm also has 180,000 bonds outstanding, which pay interest semiannually. These bonds have a coupon interest rate of 7%, 16 years to maturity, a face value of $1,000, and a current price of 926.36. If the corporate tax rate is 34%, what is the Weighted Average Cost of Capital (WACC) for this firm? (Answer to the nearest hundredth of a percent, but do not use a percent sign).

Reference no: EM131063521

Questions Cloud

Compare samsung and apple ratios to the industry : Compare Samsung and Apple Ratios to the industry (peer) averages and comment on how they stand when you benchmark the results?
Determine linear correlation between the two variables : find the value of the linear correlation coefficient r, and find the critical values of r from Table VI, Appendix A, p. A-14, of your textbook Elementary Statistics. Use α = 0.05.
Funded with a million dollars at his death : Bob had a will drafted which formed a trust for his wife that would be funded with a million dollars at his death. The trust is required to give her all income annually and allows her to designate who among their children will receive the trust pr..
Demonstrate how internetworking devices : be able to analyse IP addressing requirements and design an addressing scheme;
Weighted average cost of capital for this firm : The current stock price for a company is $40 per share, and there are 3 million shares outstanding. The beta for this firms stock is 1.2, the risk-free rate is 4.7, and the expected market risk premium is 5.9%. what is the Weighted Average Cost of Ca..
Information about clearwater company direct materials : Information about Clearwater Company's direct materials cost follows: Standard price per materials gram $ 100.00 Actual quantity used 9,200 grams Standard quantity allowed for production 9,400 grams Price variance $ 77,740 F Required:
Performs its best-case and worst-case scenario analysis : Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,090 per unit; variable cost = $310 per unit; fixed costs = $4.82 million; quantity = 72,000 units. What values should the company use for the fou..
Characteristics of the firm optimal pricing scheme : How would the firm go about pricing in this case? Identify the key economic characteristics of the firm's optimal pricing scheme. Will profit be higher or lower than that obtained under the assumptions of part a and part b?
Indicators of a material weakness : The PCAOB has outlined a number of circumstances that are indicators of a material weakness. In addition, other control deficiencies may or may not be a material weakness depending upon details of the circumstances involved.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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