What is the company cost of capital

Assignment Help Finance Basics
Reference no: EM13302967

A company is 40% financed by risk-free debt. The interest rate is 10%, the expected market risk premium is 8%, and the beta of the company's common stock is .5. What is the company cost of capital? What is the after-tax WACC, assuming that the company pays tax at a 35% rate?

Reference no: EM13302967

Questions Cloud

The data-centric java agricultural image storing application : Develop and test a specified a data-centric Java application. The required application is described in the Agricultural Image storing application- case-study
What is the required return on okefenokee stock : The treasurer estimates that the beta of the stock is currently 1.5 and that the expected risk premium on the market is 6%. The Treasury bill rate is 4%. Assume for simplicity that Okefenokee debt is risk-free and the company does not pay tax.
Find velocity of each block knowing the relative velocity : The three blocks shown move move with constant velocities. Find the velocity of each block, knowing that the relative velocity of A with respect to C is 300 mm/s upward and that the relative velocity of B with respect to A is 200 mm/s downward.
What is the decibel intensity at this distance : A loudspeaker receives 8.0 W of power from an audio amplifier, and turns 3 % of that power into sound waves. What is the decibel intensity at this distance
What is the company cost of capital : What is the company cost of capital? What is the after-tax WACC, assuming that the company pays tax at a 35% rate?
Find the coefficient of performance of the air conditioner : A Carnot air conditioner maintains the temperature in a house at 294 K on a day when the temperature outside is 308 K
What is the net cost of the spectrometer : The spectrometer would have no effect on revenues, but it is expected to save the firm $25,000 per year in before-tax operating costs, mainly labor. The firm's marginal federal-plus-state tax rate is 40%.
If per capita personal income increases : If per capita personal income increases by 10%, and a firm's demand increases by 15%, you can conclude that the firm sells a product with a (n)_____. A company raises the price of toilet tissue by 10%, and the quantity sold by its competitor rises by..
What is the marginal cost in a production situation : What is the marginal cost in a production situation? Where does the minimum point occur on the average cost curve?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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