What is the companys cost of equity capital

Assignment Help Finance Basics
Reference no: EM13263781

Lisa Marie Cosmetics has a target capital structure of 25% debt and 60% equity. The yield to maturity on the company's outstanding bonds is 6%, and the company's tax rate is 40%. Marie's CFO has calculated the company's WACC as 7.83%. What is the company's cost of equity capital? Round your answer to two decimal places.

Reference no: EM13263781

Questions Cloud

What is the value of a perpetuity with an annual payment : What is the value of a perpetuity with an annual payment of $50 and a discount rate of 4%?
Calculate the option exercise value : The exercise price on one of ORNE Corporation's call options is $35 and the price of the underlying stock is $34. The option will expire in 55 days. The option is currently selling for $0.25.
Calculate the output voltage and the output waveform : With vs = 3sin200tV, R1=20kohms, Cf=5uF, vc(0) = 1.5V. 2. Calculate the output voltage and the output waveform of the circuit.
What is the scattering angle of the photon : In a Compton scattering experiment, the scattered electron is observed to move in the same direction, what is the scattering angle of the photon
What is the companys cost of equity capital : Marie's CFO has calculated the company's WACC as 7.83%. What is the company's cost of equity capital? Round your answer to two decimal places.
Find the initial momentum of the photon : An X-ray photon with a wavelength of 0.260nm scatters from a free electron at rest. Find the initial momentum of the photon
Calculate the energy stored in the inductor at t : R- 1k ohm; L=1nH for the circuit represented in Fig. 8.1, and with the knowledge that i(0) = -3mA: a) Write an expression for i(t) valid for all t>=0 b) Compute i(t) at t=0, t=1ps, 2ps, and 5ps
Determine the object''s average density : A spherical object has an outside diameter of 50.0cm. Its outer shell is composed of aluminum and is 0.800cm thick. Determine the object's average density
Calculate the profitability of the chester company account : Sales $15,000 Number of orders 160 Percent of orders marked rush .70 Calls to technical support 80 Required: Calculate the profitability of the Chester Company account.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the required rate of return

Calculate the required rate of return on a company's stock that has the following characteristics

  Determination of required rate of return

Assume the RiskFree Rate is 8%, the Expected Return this year on the S&P 500 stock market index is 13 percent, and the stock of Joe's Junkyard has a Beta of 1.4.

  Create a statement of cash flows

Bando Corporation has a $300,000 balance in Accounts Receivable and a $4,000 debit balance in Allowance for Doubtful Accounts. Credit sales for the period totaled $1,800,000.

  Explain and discuss on investment plan

Explain and Discuss on investment plan and which option should Tiger Travel take with the first payment due one year from now

  What would be your estimate of shelbys cost of equity

On the basis of the results of parts a through c, what would be your estimate of Shelby's cost of equity? Assume Shelby values each approach equally.

  Jossiah and jemima

Jossiah and Jemima Benson have recently married and in planning their future have decided to solicit the services of a financial advisor with the aim of implementing their short and long term lifestyle goals and financial plans. Jossiah and Jemima ar..

  Finding the original issue price

A Corporation has $1,000,000 in its common stock account and $2,500,00 in its paid in capital account. The company issued 100,000 shares of common stock.

  The bankruptcy laws

I do a lot of work with smaller corporations that are in severe financial difficulty. I constantly hear comments, from others, that bankruptcy is a dodge.

  Prepare a bond amortization schedule

A Corporation issued 10 percent, 10-year, $10,000,000 par value bonds that pay interest semiannually on April 1 and October 1. The bonds are dated April 1, 2004 and are issued on that date.

  What is the operating cash flow

Your firm has net income of $322 on total sales of $1,300. Costs are $720 and depreciation is $120. The tax rate is 30 percent. The firm does not have interest expenses. What is the operating cash flow?

  Risk analysis of an investment

You believe Dr. Washington is now ready to begin risk analysis and is ready to understand the risk differences among various investments. The most basic fact you want to convey to him is risk and return?

  Calculate the current price of the preferred stock

if the dividends on a preferred stock is $9 per year, and the required rate of return on the stock is 12%, then calculate the current price of the preferred stock.

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