What is the company new cost of equity

Assignment Help Financial Accounting

Reference no: EM131337202

Gamer Co. has no debt. Its cost of capital is 10 percent. Suppose the company converts to a debt–equity ratio of 1. The interest rate on the debt is 7.1 percent. Ignore taxes for this problem.

1. What is the company’s new cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

2. What is its new WACC?

Reference no: EM131337202

Questions Cloud

Discuss benefits and drawbacks of using database marketing : MHA626- Describe your understanding of database marketing and how it could potentially be applied to your marketing plan for the Final Project. Discuss the benefits and drawbacks of using database marketing.

Considers the required rate of return of the project : S. Miller is looking to expand an existing project. The expansion requires an immediate outflow (an investment today) of $85 million. S. Miller anticipates that the project will generate one future cash flow of $155 million that will arrive at the en..

What risk adjusted rate of return is appropriate : The risk-free rate is 7 percent and the market risk premium is 7.4 percent.- Super Muench wants to know what risk-adjusted rate of return is appropriate for investments in its retail outlets.

Two non-standardized processes : Write a 1,050-word paper to assess and resolve resistance to process change. Identify at least two non-standardized processes in your own organization or one you are familiar with that can be documented.

What is the company new cost of equity : Gamer Co. has no debt. Its cost of capital is 10 percent. Suppose the company converts to a debt–equity ratio of 1. The interest rate on the debt is 7.1 percent. Ignore taxes for this problem. What is the company’s new cost of equity?

Probability that project will be acceptable investment : The standard deviation of the project's net present value is $3,000.- What is the probability that this project will be an acceptable investment?

Measure your employees job satisfaction : Imagine you're working as a HR manager in ABC Corporation, How would you measure your employees job satisfaction. Explain

News media have affedted american culture : An essay with at least 700 to 1050 in which you discuss how the information and news media have affedted American culture.

What difference is there in the probability : What factors should be considered when deciding whether to use a parametric or nonparametric statistical analysis? What difference is there in the probability of being tardy to class for male versus female students

User Account

All Pages