Reference no: EM13878092
Weighted-Average Cost of Capital (WACC)
a. Micro Advantage, Inc., issued a $5,000,000, 20-year bond a year ago at 98 with a stated rate of 9 percent. Today, the bond is selling at 110. If the firm's tax bracket is 30 percent, what is the current after-tax cost of this debt?
b. Micro Advantage, Inc., has $5,000,000 preferred stock outstanding that it sold for $24 per share. The preferred stock has a per share par value of $25 and pays a $3 dividend per year. The current market price is $30 per share. The firm's tax bracket is 30 percent. What is the after-tax cost of the preferred stock?
c. In addition to the bonds and preferred stocks described in (a) and (b) above, Micro Advantage has outstanding 50,000 shares of common stock that has a par value of $10 per share and a cur- rent market price of $170 per share. The expected after-tax market return on the firm's common equity is 20 percent. What is Micro Advantage's weighted-average cost of capital (WACC)?
|
Difference between training and learning and development
: Companies with an old school mentality still consider training a human resource thing and have a mindset of "we'll do it when there's time." Can you explain the difference between training and learning and development
|
|
Fringe benefit tax - advice abc of its fbt consequences
: Analyze and then advice ABC of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2015
|
|
Find the equilibrium national income, consumption, and tax
: Assume a closed economy with the following national income model: Y = C + I + G0 , C = C0 + bY D , T = T0 + tY I = I0 + iY - Find the equilibrium national income, consumption, and tax
|
|
Determine the break-even point
: Determine the break-even point
|
|
What is the after-tax cost of the preferred stock
: The current market price is $30 per share. The firm's tax bracket is 30 percent. What is the after-tax cost of the preferred stock?
|
|
What is meant by time value of money
: a) What is meant by time value of money? b) Draw a cash flow diagram to show how much money a person should be willing to pay now that will yield RM400 per year for 5 years, starting next year if the interest rate is 10% per year. (Note: DO NOT so..
|
|
What is book rate of return based on the original investment
: What is the book rate of return based on the original investment? What is the book rate of return based on the average book value?
|
|
Identify the endogenous and exogenous variables
: Consider a close economy with the following consumption and tax function C = C0 + bY D , T = T0 + tY - Identify the endogenous and exogenous variables and the parameters
|
|
Investigate the declining trust in the health care system
: Investigate the declining trust in the health care system from an ethical and moral position
|