What is peter weighted average cost

Assignment Help Business Economics
Reference no: EM131760113

Peter's Audio has 72,000 bonds outstanding that are selling at par value. The bonds have a yield to maturity of 6.95 percent. The company also has 5 million shares of common stock outstanding. The stock has a beta of 1.25 and sells for $28 a share. The U.S. Treasury bill is yielding 3 percent and the market risk premium is 7 percent. Peter's tax rate is 35 percent. What is Peter's weighted average cost of capital?

Reference no: EM131760113

Questions Cloud

Negotiating trade offs and helping management : Negotiating trade offs and helping management and project team members ameliorate the impact of trade offs in adverse conditions is a unique set of skills
Capm assists in measuring both risk and return : Explain how the CAPM assists in measuring both risk and return.
Discuss disposing or replacing old assets : Why are businesses sometimes hesitant about disposing or replacing old assets or antiquated technology
Prepare a production cost report for the assembly department : Luxman Company has several processing departments. Costs charged to the Assembly Department for October 2017 totaled $1,298,400 as follows.
What is peter weighted average cost : Peter's tax rate is 35 percent. What is Peter's weighted average cost of capital?
Prepare the journal entry to record the receipt of refund : Prepare the journal entry to record the receipt of the refund check, Prepare the income tax journal entry at the end of 2017
When learning curve is plotted on ordinary : When a learning curve is plotted on ordinary graph paper, it appears that the improvements can go on forever. How do you account for the difference?
Which of these stocks is overpriced : The market risk premium is 7% and the risk-free rate is 5%. Which of these stocks is overpriced?
The appointment and reappointment of physicians : What specific issues are important in the appointment and reappointment of physicians?

Reviews

Write a Review

Business Economics Questions & Answers

  Input factors are necessary to make the holiday wreaths

Do you think the MP (marginal productivity) figures in the presentation are based on a single variable factor, or all factors of production? Why? In the paper, what other input factors are necessary to make the holiday wreaths?

  Equation to calculate the alcohol death rate for the region

For a region, you are given the number of deaths, the number of deathes related to alcohol, the number of deaths related to painkiller opiates and the averge mid-year population. What is the equation to calculate the crude death rate for the region? ..

  Which is not a function of the foreign exchange market

Which of the following is NOT a function of the foreign exchange market? Which of the following is a system that allocates financial resources in the form of debt and equity according to their most efficient uses?

  Likely to result in an efficient outcome

Which of the following schemes is the most likely to result in an efficient outcome?

  Problems which lead to simultaneous linear equations

The Babylonians studied problems which lead to simultaneous linear equations and some of these are preserved in clay tablets which survive. For example a tablet dating from around 300 BC contains the following problem:

  Discuss the impact of a favorable supply shock

Discuss the impact of a favorable supply shock (technological breakthroughs) on the equilibrium price level (P) and output level (Y). Also, discuss how the Fed could accommodate a favorable supply shock. Discuss in detail how the price level and outp..

  Earnings before interest and taxes

ABC Company currently does not have any debt. Its earnings before interest and taxes (EBIT) are $500,000, and it is a zero-growth company. The firm's tax rate is 40%. What is the firms cost of equity?

  What is the profit maximizing level of output

Suppose that a tax of $5 for each unit produces is imposed by state government. What is the profit maximizing level of output?

  Assume that muffins are incredibly addictive

Assume that muffins are incredibly addictive, so consumers have perfectly inelastic demand for them, up to a certain saturation point.

  Excise taxes are more effective at raising tax revenues

Explain why excise taxes are more effective at raising tax revenues when applied to products with price inelastic demand versus ones with price elastic demand. Under what conditions would it be possible for tax revenues to decline with higher excise ..

  Fundamental equation of capital accumulation

Using the Solow growth model with no technology growth and no population growth, write the fundamental equation of capital accumulation per capita and plot the time series for capital per capita, output per capita, and consumption per capita when ..

  What ethical dilemma might this currency fluctuation present

You are on a business trip from Portugal to the United States for 90 days, and you have a per diem expense account of euro 400 per day, no receipts required. This per diem is advanced to you before the trip (euro 36,000). What ethical dilemma might t..

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