What is its after-tax WACC

Assignment Help Financial Management

Reference no: EM132044350

AllCity, Inc., is financed 35% with debt, 13%with preferred stock, and 52% with common stock. It's cost of debt is 5.8%, it's preferred stock pays an annual dividend of $2.47 and its prices at $34. It has an equity beta of 1.14. Assume the risk-free rate is 1.9%, the market risk premium is 7% and AllCity's tax rate is 35%. What is its after-tax WACC?

Reference no: EM132044350

Questions Cloud

What is portfolio beta : What is the portfolio beta?

Find the exercise price on the option : The risk free annual interest rate is 6%. The no arbitrage price of the option is $82.75. Find the exercise price on the option.

What is the year one cash flow : Fool Proof Software is considering a new project whose data are shown below. What is the Year 1 cash flow?

Zero salvage value : The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have zero salvage value

What is its after-tax WACC : Assume the risk-free rate is 1.9%, the market risk premium is 7% and AllCity's tax rate is 35%. What is its after-tax WACC?

What is the return on equity and equity multiplier : What is the equity multiplier? What is the return on equity?

What would be cost of new equity : New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of new equity?

What is your year one after tax cash flow : What is your year one after tax cash flow? What is your inital cash flow?

What must the expected return on market be : A stock has an expected return of 12.6 percent, its beta is 1.30, and the risk-free rate is 2.5 percent. What must the expected return on the market be?

User Account

All Pages