What is the company wacc

Assignment Help Financial Accounting
Reference no: EM133433720

Question: You are given the following information for Tara Ita Power Co. Assume the company's tax rate is 21 percent.

Debt: 8,000 7.5 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.

Common stock: 470,000 shares outstanding, selling for $65 per share; the beta is 1.08.

Market: 8 percent market risk premium and 5.5 percent risk-free rate.

What is the company's WACC?

 

Reference no: EM133433720

Questions Cloud

Determine a cost of capital and apply capital budgeting : determine a cost of capital and apply capital budgeting techniques and an efficient capital structure given the resources and constraints imposed on the company
What was the exchange rate between french francs and u.s. : Before World War I, $20.67 was needed to buy one ounce of gold. If, at the same time, one ounce of gold could be purchased in France for FF410.00
Calculate current ratios and operation ratios for government : calculate current ratios and operation ratios for governmental activities (GA), business-type activities (BA), and total primary government activities
How should the business financing be recorded on the books : How should the business financing be recorded on the books of the company? How should the company record the assets of the company? How would a business plan
What is the company wacc : Market: 8 percent market risk premium and 5.5 percent risk-free rate. What is the company's WACC?
Describe how a value-based method for financial reform : Describe how a value-based method for financial reform would impact efficiency and quality, and how it would promote positive outcomes for the organization.
What is abc average net float : ABC Health care writes on average $25,000 in checks. It generally takes 3 days for those checks to be cancelled by the bank. Each day ABC receives $25,000
Explain why this is a flaw : Explain why this is a flaw and Identify some practical solutions that could mitigate this flaw
What is the amount of each payment : What is the amount of each payment? (Note that the single payment at the end of the period (aka balloon payment) is in addition to the regular payment scheduled

Reviews

Write a Review

Financial Accounting Questions & Answers

  Production planned-batch-related overhead

Borck's entrerprises has the following production planned for the first quarter of next year: Each unit requires 3 hours of direct labor time at $12 per hour. Unit-related overhead is $10 per machine hour and each unit requires 1/2 machine hour. Batc..

  What do call the process of reconciling the balance sheet

What do we call the process of reconciling the balance sheet and the income statement? what is the cash balance as of the end of the month?

  What were m and m sales revenues last year

What were M&M's sales revenues last year? What were M&M's sales revenues last year? Last year M&M Corporation reported its net income as $920,000.

  What are the fundamentals of double entry bookkeeping

What are the fundamentals of double entry bookkeeping? How would you state the debit and credit rule in double-entry bookkeeping?

  Determining the depreciation expense

What should be the depreciation expense on this machine for the year ended December 31, year 3?

  Find What was average days of inventory

Find What was its average days of inventory? Your company had $13 million in sales last year. Its cost of goods sold was $9.1 million and its average inventory

  How much cash did apollo collect from students for tuition

Assume all of this was on account. If write-offs were $245,255, how much cash did Apollo collect in 2012 from students for tuition?

  What is the average accounts payable for app

1/15, net 35. APP always takes the discount, but takes the full 15 days to pay its bills. What is the average accounts payable for APP?

  Determine the standard direct materials cost for one bag

Determine the standard direct materials cost for one bag of Insect-Be-Gone. Each bag of the product contains 56 pounds of direct materials.

  How much dividend lily fashion house can pay

How much dividend Lily Fashion House can pay its shareholders this year and what is dividend payout ratio of the company. Assume the Residual Dividend

  What additional revenues and costs should be evaluated

What additional revenues and costs should be evaluated? What risks could exist with the acquisition

  Prepare entry to allocate the over- or underapplied overhead

Prepare entry to allocate the over- or underapplied overhead. Yarra Fabrication estimates that its manufacturing overhead will be $2,252,800 in year 1.

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