User Account

All Pages

What is the company wacc

Assignment Help Finance Basics
Reference no: EM132953465

Smothers Brothers Ltd. is estimating its WACC. The company has collected the following information:

  • Its capital structure (in market value terms) consists of 40 percent debt (i.e. D/(E+D) = 0.4) and 60 percent common equity.
  • The company has 20-year bonds outstanding with a 9.8% annual coupon that are trading at par.
  • The company's tax rate is 33%.
  • The risk-free rate is 3.9%.
  • The market risk premium is 5%.
  • The stock's beta is 0.9.

What is the company's WACC?

Reference no: EM132953465

Questions Cloud

What should be the reported value of Montana inventory : Montana Co. has determined its year-end inventory on a FIFO basis to be $639,000. What should be the reported value of Montana inventory
Calculate how much you would get on the first day : The interest rate on the contract is 7.5% per year. Calculate how much you would get on the first day of each month during those thirty years
Find the underapplied or overapplied overhead for September : For the current year, estimated direct labor hours were 118,000. Find the underapplied or overapplied overhead for September
Cash conversion cycle and net working capital : Why is understanding the relationship between the cash conversion cycle (CCC) and net working capital important to the contemporary business executive?
What is the company wacc : Smothers Brothers Ltd. is estimating its WACC. The company has collected the following information:
What is the gross profit margin for swank : If swank clothier had sales of 368,000 and cost of goods sold of 323,000. What is the gross profit margin (ratio of gross profit to sales)?
Calculate gain or loss on disposal : Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $3,777. Calculate gain or loss on disposal
Find the amount of direct materials issued : During the month of April, the company has the following cost information: Beginning materials inventory 50,100. Find the amount of direct materials issued
Find the price of bonds under current ytm : 1. A bond has a 5% coupon rate, and matures in 18 years, and has par value $1000. Find the price of the bond today if the yield to maturity is 4% first assuming

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd