What is crypton cost of capital where the firm rate

Assignment Help Financial Management
Reference no: EM131325140

Crypton Electronics has a capital structure consisting of 43% common stock and 57% debt. A debt issue of $1000 par value, 5.7% bonds that mature in 15 years and pay annual interest will sell for $974. Common stock of the firm is currently selling for $30.06 per share and the firm expects to pay a $2.31 dividend next year. Dividends have grown at the rate of 5.1% per yeat and are expected to continue to do so for the foreseeable future. What is Crypton's cost of capital where the firm's rate is 30%?

Reference no: EM131325140

Questions Cloud

What information is necessary to create an account at itunes : Search and provide an overview about both companies and their business models. What information is necessary to create an account at iTunes? Why is it needed?
About the dollar equivalent : The U.S. dollar equivalent is 0.4502 for the Brazilian real and 1.4729 for the U.K. pound. Which one of the following statements is correct given this information? One U.S. dollar will buy 0.4502 Brazilian reals. If you have 0.4502 Brazilian real..
Could the war of 1812 be considered americas second war : Could the War of 1812 be considered America's second war for independence? Explain.
Represents the gene for normal pigmentation : Where n represent gene for albinism and N represents the gene for normal pigmentation.
What is crypton cost of capital where the firm rate : Crypton Electronics has a capital structure consisting of 43% common stock and 57% debt. A debt issue of $1000 par value, 5.7% bonds that mature in 15 years and pay annual interest will sell for $974. Dividends have grown at the rate of 5.1% per y..
Construct a five-equation econometric model of the state : Construct a five-equation econometric model of the state of Indula. There will be a consumption equation, an investment equation, a tax receipt equation, an equation representing the GDP identity, and a national income equation.
What do you think would happen to the futures price : What do you think would happen to the futures price over the month of November? Why?- If you expected this to occur, would you have purchased or sold a December futures contract on GBP on 1 November? Explain.
Amount of waste and pollution that you create : 1. How can/do YOU reduce the amount of waste and pollution that you create?  In other words, describe 3 things that you can do/already do to reduce, reuse and recycle more.
Explore the potential limitations of this authors view : Analyze whether he or she agrees or disagrees with the idea that all people-regardless of race, nationality, or religion-experience cities as vibrant sites of cultural exchange and enrichment. Be sure to cite specific details from the text that ei..

Reviews

Write a Review

Financial Management Questions & Answers

  The market portfolio and the risk-free asset

Consider the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio RP σP βP X 13.00 % 30.00 % 1.30 Y 12.00 25.00 1.10 Z 7.00 15.00 .75 Market 10.10 20.00 1.00 Risk-free 5.00 .00 .00 Assume that th..

  Without referring to the pre programmed function

Without referring to the pre programmed function on your financial calculator, use the basic formula for the present value, along with the given opportunity cost r, and the number of periods, n, to calculate the present value of $1 in the case shown ..

  What is the one year future exchange rate

John wants to build a new building. He needs $35 million. He may borrow in the US at 4.5% or in the UK for 7.5% for 1 year. The current exchange rate is $1.5:£1.0. What is the 1 year future exchange rate?

  What is rUTI-the required rate of return on UTI Stock

As an equity analyst you are concerned with what will happen to the required return to Universal Toddler Industries stock as market conditions change. Suppose rRF=5% rM =12% and bUTI = 14. Under the current conditions what is rUTI, the required rate ..

  Refinancing the outstanding mortgage balance

Assume a 25-year, $490,000 mortgage with a rate of 7.2 percent. 9 years into the mortgage, rates have fallen to 6.2 percent. What would be the monthly saving to a homeowner from refinancing the outstanding mortgage balance at the lower rate?

  Buybacks can be used to maintain certain stock price range

A firm should only pay cash dividends during the maturity phase. A stock dividend is a lower cost alternative to a cash dividend and can be considered at all but the initial stages of a corporate life cycle. A poison pill strategy should be considere..

  How much would you lose over 5 years

How much would you lose over 5 years if you had to give up interest on the interest-that is, if you received 50% instead of compounded interest?

  Mortgage rate-what would be your monthly payment

On June 1, you borrowed $195,000 to buy a house. The mortgage rate is 2.5%. The loan is to be repaid in equal monthly payments over 15 years. All taxes and insurance premiums are to be paid separately. What would be your monthly payment?

  Present value of perpetuity-when dealing with estate taxes

Stock A has a current price of $40.00, a beta of 2.5, and a dividend yield of8%. If the Treasury bill yield is 5% and the market portfolio is expected to return15%, what should stock A sell for at the end of an investor’s three year horizon? What is ..

  What is its nominal annual rate of return

Preferred stock returns Bruner Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $2, and its current price is $80. What is its nominal annual rate of return?

  What is the payoff from a call option on the cumulative

Weather derivatives are often written in terms of HDD and CDD, heating degree days and cooling degree days, where on a given day, HDD = max(0,65-A) CDD = max(0,A-65) A = average of the day’s low and high temperatures. What is the payoff from a call o..

  Characteristic of the self-attribution bias

Which one of the following is a characteristic of the self-attribution bias?

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