What is? acort equity cost of? capital

Assignment Help Business Management
Reference no: EM132691108

Acort Industries has 12 million shares outstanding and a current share price of $48 per share. It also has? long-term debt outstanding. This debt is risk? free, is four years away from? maturity, has an annual coupon rate of 9%?, and has a $92 million face value. The first of the remaining coupon payments will be due in exactly one year. The riskless interest rates for all maturities are constant at 5.4%. Acort has EBIT of $109 ?million, which is expected to remain constant each year. New capital expenditures are expected to equal depreciation and equal $16 million per? year, while no changes to net working capital are expected in the future. The corporate tax rate is 45%?, and Acort is expected to keep its? debt-equity ratio constant in the future? (by either issuing additional new debt or buying back some debt as time goes? on).

a. Based on this? information, estimate? Acort's WACC.

b. What is? Acort's equity cost of? capital?

Reference no: EM132691108

Questions Cloud

What is valuation of amd common stock today : Use the Corporate Valuation model is the most appropriate model to value AMD Here's Free Cash Flow projections (in millions of $) needed to value AMD as a firm.
Find an arbitrage opportunity : Given the following assets, find an arbitrage opportunity. Your answer should consist of a list of assets in your portfolio (including whether you are short or
How much does laura have in the bank at the end of the week : How much does Laura have in the bank at the end of the week? She purchases office equipment for RM900 paying immediately by cheque
Compute the total future value of investment : Consider an 7% coupon bond with 2 years time-to-maturity and $1000 face value, is selling for $980 and making annual coupon payments. The constant market
What is? acort equity cost of? capital : Acort Industries has 12 million shares outstanding and a current share price of $48 per share. It also has? long-term debt outstanding. This debt is risk? free
How do determine what gross profit is : Determine What Gross profit is? To find the value of closing inventory at the end of a period we? Do this by physically counting the inventory
What is the pv of this uneven annuity : You are told that you will receive $5,000, 4,000, 3,000, 2,000, 1,000 at the end of each year (assume compounded annually)
What is valuation of amd common stock today : Use the Corporate Valuation model is the most appropriate model to value AMD Here's Free Cash Flow projections (in millions of $) needed to value AMD as a firm.
Which should be regarded as a current liability : Is it true that the trial balance totals should agree? No, there are sometimes good reasons why they differ. Which should be regarded as a current liability?

Reviews

Write a Review

Business Management Questions & Answers

  Strategic decisions-tactical and operational decisions

Provide examples of organizations making the following levels of decisions: strategic decisions, tactical decisions and operational decisions.

  Find the probability that there are 2 successes

If 10 students are surveyed, find the probability that there are (exactly) 2 successes. Use the Binomial Distribution from Section 5.4 to answer this question.

  Project lessons learned and project retrospectives

What are the distinguishing characteristics between project lessons learned and project retrospectives?

  Temp-to-fulltime workers research and information for job

temp-to-fulltime workers research and information for job huntersthe owner of work now a nonprofit job referral agency

  Use of trade secrets to protect intellectual property

Are there any drawbacks with the use of trade secrets to protect intellectual property?

  According to the rational-expectations approach

According to the rational-expectations approach, if everyone believes that policymakers are committed to reducing inflation, the cost of reducing inflations-the sacrifice ratio-will be lower than if the public is skeptical about the policymakers' ..

  What is your total percentage return on this investment

Suppose that firms with unexpectedly high earnings earn abnormally high returns for several months after the announcement. This would be evidence of:

  How could you surmount these hurdles

What hurdles might you face? How could you surmount these hurdles?

  Discuss bridgett kendall''s position on neutral reporting

Discuss Bridgett Kendall's position on neutral reporting. Discuss how your position on neutral reporting aligns with those expressed by Kendall. Discuss your ideas about the future of diplomatic reporting.

  Numerous apartment-complex owners are installing water

Numerous apartment-complex owners are installing water meters for each apartment as well as billing the occupants according to the amount of water they use

  Barriers to personal growth and developmentwhat are the

barriers to personal growth and developmentwhat are the barriers to personal growth and development? what universal

  Describe your favorite marketing campaign

Describe what you will do to help stimulate positive word of mouth advertising for that product.- Briefly describe your favorite marketing campaign or advertisement, and why it is your favorite.

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