What is PTFCs weighted average cost of capital

Assignment Help Financial Management
Reference no: EM13728289

Pine Tree Farms Corporation (PTFC) has a target capital structure of 30% debt, 10% preferred stock, and 60% common equity. Currently PTFC has a capital structure of 75% debt, 10% preferred stock, and 15% common stock. The after tax cost of debt is 4%. The preferred stock has a par value of $100 per share, a $6 per share dividend, and a market price of $70 per share. The common stock of PTFC trades at $96 per share and has a projected dividend (D1) of $2.55. The stock price and dividend are expected to continue to grow at 7% per year for the foreseeable future.

What is PTFC’s weighted average cost of capital (WACC)?

Reference no: EM13728289

Questions Cloud

What is the dollar return on the stock investment : Your next assignment is to assume that $10,000 was invested in the stock of General Medical Corporation with the intention of selling after one year. The stock pays no dividends, so the entire return will be based on the price of the stock when sold...
Explain their views of human nature and their worldviews : Explain their views of human nature and their worldviews as expressed in their respective theories. Which aspect of their theory do you think would be different if they were alive and working today?
Case study in l l bean company : Write case study in l.l.bean company 300 words
What are hospitals contribution margin-breakeven point : Your firm, General Hospital is a not-for-profit, acute care facility which has the following cost structure for its inpatient services. Your job is to determine based on your extensive knowledge of Cost behaviour and profit analysis theory and concep..
What is PTFCs weighted average cost of capital : Pine Tree Farms Corporation (PTFC) has a target capital structure of 30% debt, 10% preferred stock, and 60% common equity. Currently PTFC has a capital structure of 75% debt, 10% preferred stock, and 15% common stock.
What are the challenges to diversity : Diversity: Why is diversity valued in teams, What are the challenges to diversity
Explain the development of a strategic plan : Define cultural products, and give three examples of them. Identify how cultural products are considered in the development of a strategic plan.
How has art in the context of the social justice movements : How has art, in the context of the social justice movements of the twentieth century, challenged, and shaped American society?
How did nazi racial policies result in the holocaust : How did Nazi racial policies result in the Holocaust? Why did so many Germans, French, and Eastern Europeans participate willingly in the Holocaust?

Reviews

Write a Review

Financial Management Questions & Answers

  Perform analysis of advertising strategy for midtown motors

Midtown's president believes the television station will consider running the Midtown spot announcement on its highly rated evening news program (at the same cost) if Midtown will consider using additional television announcements.

  Dhl and fedex have helped companies throughout the world

dhl and fedex have helped companies throughout the world succeed in the global economy by understanding the customers

  Without changing its sales-assets or capital structure

Last year Blease Inc had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $295,000 and its net income was $10,600. The CFO believes that the company could have operated more efficiently, lowered its costs, and increase..

  What are the clinics expected total costs

What is the clinic's underlying cost structure and what are the clinic's expected total costs and what are the clinic's estimated total costs at 7,500 visits? At 12,500 visits?

  Prepare a consultancy report

Section 1: Financial Analysis Review the Financial Statements: Analyse the current financial state of Anthony's Orchard and evaluate the impact of a major customer cancelling their expected order. This analysis should include the following: Your v..

  Mutually exclusive project

Project S costs $15,000, and its expected cash flows would be $4,500 per year for 5 years. Mutually exclusive Project L costs $37,500, and its expected cash flows would be $11,100 per year for 5 years. If both projects have a WACC of 14%, which proje..

  Prepare a report on the different considerations that an

prepare a report on the different considerations that an mnc should keep in mind when obtaining capital from a foreign

  What was deltas payout ratio for fiscal year

Delta Corporation earned $2.50 per share during fiscal year 2011 and paid cash dividends of 1.00 per share. During the fiscal year that just ended on December 31, 2012, Delta earned $3.00 per share, and the firm’s managers expect to earn this amount ..

  Bond issue outstanding with an annual coupon

Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 9%, what is the value of the bond?

  What is the minimum rate of return

You bought a stock last year that grows by 10% every year. You decide that you will both hold onto that stock for another year and sell it, or you will sell it now and buy a different stock. If you are taxed 40% on half (50%) of the profit you make, ..

  What is the intrinsic value of portmans stock

Portman industries just paid a dividend of $2.40 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12.00% over the next year. After teh next year, though, Portman's dividend is expected to g..

  Maturity quoted at discount yield

What is the price of a U.S. Treasury bill with 56 days to maturity quoted at a discount yield of 1.20 percent? Assume a $1 million face value. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

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