What is the company wacc-dinklage corp

Assignment Help Finance Basics
Reference no: EM132707644

Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $68, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 97 percent of par. The second issue has a face value of $40 million, a coupon rate of 6.5 percent, and sells for 108 percent of par. The first issue matures in 21 years, the second in 6 years.

Suppose the most recent dividend was $3.25 and the dividend growth rate is 5 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 21 percent. What is the company's WACC?

Reference no: EM132707644

Questions Cloud

What is the degree of operating leverage : A project has the following estimated data: price = $800 per unit; variable costs = $650 per unit; fixed costs = $900,000; required return = 8%; initial investm
Prepare account sales and determine the amount of remittance : Prepare account sales and determine the amount of remittance. On June 1, 2019, AA Company shipped 25 television sets to BB, Inc. on consignment.
What is the present value of cca tax shield : What is the present value of CCA tax shield for the new equipment?
How would decide which one to use : Your business demand data show trend, You want to use either linear regression or exponential smoothing with trend. How would you decide which one to use?
What is the company wacc-dinklage corp : Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $68, and the book value per share is $8. The company
Find weighted average contribution margin calculation : Find Weighted Average Contribution Margin Calculation. Radio Control, Inc., sells radio controlled cars for $300 per unit representing 80 percent of total sales
Degree of operating leverage for project : The fixed cost of a project is $8,000. The depreciation expense is $3,500 and the operating cash flow is $20,000. What is the degree of operating leverage for t
What methods would you suggest for doing so : Twisted is a small company with big dreams. The shopping mall-oriented hot pretzel company has successfully grown its revenues by a rate of 10 percent annually.
How do draft the pro-forma consolidation journal entries : How do Draft the pro-forma consolidation journal entries of the Nike Ltd Group for the year ended 30 September 2019, after taking the above-mentioned

Reviews

Write a Review

Finance Basics Questions & Answers

  What is amount of the firm net working capital

Scare Train,Inc has the following balance sheet statement ,items current liabilities of $818,139,net fixed and others assets of $1,516,470,total assets.

  Compute earnings per share for the year 2010

Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 20 percent. a. Compute earnings per share for the year 2009. b. Compute earnings per share for the year 2010.

  Construct a payoff table for amy problem

Amy decided to choose the lease option that will minimize her total 36-month cost. The difficulty is that Amy is not sure how many miles she will drive.

  Prepare in good form a balance sheet for rogers industries

Prepare in good form an income statement for Rogers Industries for the year ended March 31, 2009. Be sure to show earnings per share (EPS).

  Qone month before she died on april 14 2002 violet isaacson

q.one month before she died on april 14 2002 violet isaacson jeannes mother gave jeanne collection of coin. depends on

  Relationship between the required return and the stock price

Work this problem twice, once assuming annual dividends and once assuming semiannual dividends. Keep the dividend the same ($2.64 per share) for both annual and

  State the null and alternative hypotheses you would use test

State the null and alternative hypotheses you would use to test whether the year-end bonuses paid by Jones & Ryan were different from the population mean. Suppose a sample of 40 Jones & Ryan employees showed a sample mean year-end bonus of $118,000. ..

  What levels of the price earnings ratio and price to book

You are analyzing a stock. You expect that earnings will grow quickly relative to their current level, but the expected return on common stockholders' equity is low. What levels of the price earnings ratio (P/E) and price to book value ratio (P/BV) w..

  Determine the intrinsic value of the call

On December 9 of a particular year, a January Swiss franc call option with an exercise price of 46 had a price of 1.63. The January 46 put was at 0.14. The spot rate was 47.28.

  Compute the before- and after-tax costs of its debt

Compute the before- and after-tax costs of ITS debt. Compute the cost of equity (assuming all funds come from internal sources) Using the constant growth Gordon Dividend Valuation Model.

  Profitability and market value ratios

Determine what conclusions can you draw about Time Warner Corporations performance over the last five years in terms of liquidity, leverage, profitability, activity, and market value ratios?

  What is the share price of company

Company A will pay no dividends for the first five years and then 6 years, According to the Dividend Discount Model, what is the share price of Company A

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