What is capital structure weight of the firms common stock

Assignment Help Finance Basics
Reference no: EM13261041

NR Industries has 150,000 shares of common stock outstanding. The stock is currently selling for $33.50 a share. The firm also has 2 bond issues outstanding. The first bond issue has a total face value of $2,500,000, pays 9.5 percent interest annually, and currently sells for $1,030. The second bond issue consists of 7,500 bonds that are selling for $960 each. These bonds pay 8 percent interest annually and mature in 11 years. The tax rate is 34 percent. What is the capital structure weight of the firm's common stock? (Hint: Assume each bond has face value of $1,000.)

a. 33.66 percent
b. 33.71 percent
c. 33.80 percent
d. 33.95 percent
e. 34.07 percent

 

Reference no: EM13261041

Questions Cloud

What is difference between logical nd arithmetic shift right : Data Transfer/Manipulation Instructions a) If accA holds $16 and accB holds $2A, what memory locations will change value after executing the STD $637F instruction. Identify the new value in any changed memory locations.
How companys health and wellness programs add value : How did the company's health and wellness programs add value and evaluate the company's approach to selecting and designing a health plan, and pharmacy benefits.
What is the mass of the gas in the tank : A 10m^3 tank of compressed natural gas has an absolute pressure of 400 kPa at a temperature of 27 C. What is the mass of the gas in the tank
Will the acquisition have on wilsons cost of equity capital : which will change the company's beta to 1.7. What effect, if any, will the acquisition have on Wilson's cost of equity capital?
What is capital structure weight of the firms common stock : What is the capital structure weight of the firm's common stock? (Hint: Assume each bond has face value of $1,000.)
What series of instructions would achieve 16-bit subtraction : a) If accA holds $16 and accB holds $2A, what values will be in the each accumulators after executing the ABA instruction b) What series of instructions would achieve the 16-bit subtraction of $1234 from $8ABC
Explain what is the molarity of a sodium chloride solution : What is the molarity of a sodium chloride solution if 2.45 grams of NaCl is dissolved in 250 mLs of water? C. How many grams of solute are in 1.75 Liters of 0.460 M sodium monohydrogen phosphate
Explain what would be the effect on your calculated mass : Explain What would be the effect on your calculated mass percent recovery Cu if you used all your NaOH solution in part ll and the litmus paper never turned blue
What percentage of the firms capital funding should be debt : The pretax cost of debt is 6.7 percent and the cost of common stock is 10.4 percent. What percentage of the firm's capital funding should be debt financing if its tax rate is 30 percent?

Reviews

Write a Review

Finance Basics Questions & Answers

  Outcome on the accounting equation on payment of interest

Outcome on the accounting equation on payment of interest on the loan payable in due and in advance

  Objective type questions on foreign exchange assets

Objective type questions on foreign exchange assets and When a foreign subsidiary is not wholly owned by the parent

  Finding sustainable growth rate

Storico Cleaning, Corporation, had additions to retained earnings for the year just ended of $510,000. The company paid out $130,000 in cash dividends, and it has ending total equity of $6.8 million.

  Discuss the importance of quality in a financial statements

Assume you have $100,000 and want to invest money. How would you proceed to find a good company to put your money in?

  What is the target share price five years from now

Davis, Inc., currently has an EPS of $1.10 and an earnings growth rate of 4.5 percent. If the benchmark PE ratio is 16, what is the target share price five years from now?

  Objective type question on currency exchange rates

Objective type question on currency exchange rates and foreign subsidiaries and When an MNC cannot produce an actual product in a foreign subsidiary due to political restrictions

  Computation of ytm of the bond and annual coupon payment

Computation of YTM of the bond and what is the duration of a bond that makes annual coupon payment

  Question on merger evaluation

ABC Incorporated shares are currently trading for $32 per share. The firm has 1.13 billion shares outstanding. In addition, the market value of the firm's outstanding debt is $2 billion.

  Stock price and dividend policy

Good Values, Inc., is all-equity financed. The total market value of the firm currently is $100,000, and there are 2,000 shares outstanding. Ignore taxes. The firm has declared a $5 per share dividend. The stock will go ex-dividend tomorrow. At wh..

  Determine the new value

Friedman Steel Corporation will pay a dividend of $1.50 per share in the next 12 months. The required rate of return is 10% and the constant growth rate is 5%.

  Market risk premium under capm

Analysts give Proctor & Gamble, the consumer products firm, an equity beta of 0.65. The risk-free rate is 4.0 percent. What market risk premium is she assuming?

  Business assessment-acquisitions

Examine the company's mission and vision statements against the performance of the organization. Then, evaluate how well the company lives out its mission and vision statement. Provide support from the organization's performance in your evaluation..

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