What is the company after-tax wacc

Assignment Help Finance Basics
Reference no: EM132506102

Bex Limited just paid a dividend of $0.50, and dividends are expected to grow at a constant rate of 6.5% per year. The ordinary shares currently sell for $18.00 a share, but to sell a new issue, floatation costs of $1.00 per share would be incurred. The before-tax cost of debt is 7.8%, and the tax rate is 40%. The target capital structure consists of 30% debt and 70% ordinary share equity. What is the company's after-tax WACC if all equity is from selling new ordinary shares?

Reference no: EM132506102

Questions Cloud

What is the amount of riverwood ltd lease liability : The interest rate implicit in the lease is the same for both companies at 5%. What is the amount of Riverwood Ltd's lease liability on the commencement day
How much will the price be one : If a bond has a 7% annual coupon rate, a 10% yield to maturity, matures in four years time, and is currently selling for $904.90, how much will the price be one
Analysis of the risks exist in the conversion cycle : Appraise the risks inherent in computer-based systems/ERP, including the role of ethics and the various internal control processes that need to be in place
BAF 421 Commercial Banking Management Assignment : BAF 421 Commercial Banking Management Assignment Help and Solution - Emirates College of Technology, UAE - Assessment Writing Service
What is the company after-tax wacc : What is the company's after-tax WACC if all equity is from selling new ordinary shares?
What is the after-tax cost of debt for kimberly clark inc : What is the after-tax cost of debt for Kimberly Clark, Inc. assuming that floatation costs are 3% and that Kimberly Clark pays taxes at a 28% rate?
Prepare report to managing director of paradise industries : Articulate the various transaction cycles, financial reporting, management reporting systems and e-commerce systems to technical and non-technical stakeholders
What percent of stocks should sell to move into bonds : If during the year stocks go up 10% and bonds go up 4%, what % of your stocks should you sell to move into bonds when re balancing at the end of the year?
What will be total interest received over the life of lease : What will be the total interest received over the life of the lease given that lease payments will be made at the beginning of each of the 7 years.

Reviews

Write a Review

Finance Basics Questions & Answers

  Find the current value of the share of this stock to

which do you think is more risky for a firm trying to raise capital - an underwritten offering or a best-efforts

  Construct an example of the cycle of money

Construct an example of the cycle of money, identify all the players involved, and identify their individual benefits from participating in the cycle of money.

  Calculate diluted earnings per share

Myers Drugs, Inc., has 2 million shares of stock outstanding. Earnings after taxes are $6 million. Myers also has warrants outstanding that allow the holder.

  What is the effective or net cost of the large press

Asset acquisition decision Zarin Printing Company is considering the acquisition of Freiman Press at a cash price of $50,000.

  Economic and political structure of europe

What was the cause of the Industrial Revolution and how did it change the economic and political structure of Europe

  What are retained earnings for last year

Your company, Martin Industries, Inc., has experienced a higher than expected demand for its new product line. The company plans to expand its operation by 25% by spending $5,000,000 for an additional building.

  Provide some examples of sources of short-term credit

Provide some examples of sources of short-term credit? How can use these examples to evaluate the cost of financing as a key determinant

  What is the best method to detect fraud

Explain the three major categories of occupational fraud and according to Mr. Wells, what is the best method to detect fraud? What types of companies are hit the hardest by occupational fraud?

  Discuss about the aerospace dynamics project

Aerospace Dynamics will invest $186,000 in a project that will produce the following cash flows. The cost of capital is 10 percent.

  Population average body temperature

Actually, true population average body temperature is 98.6F but we conclude that average body temperature is not equal to 98.6 degrees Fahrenheit.

  Six months ago you invested 350000 to become a partner in a

six months ago you invested 350000 to become a partner in a medical practice in which you have a 50 ownership interest.

  Long-term debt outstanding at the start of the year

What is the formula to calculate the required external financing over the next year?

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