What is the cost of equity

Assignment Help Finance Basics
Reference no: EM13286239

Kose Inc has a target debt equity ratio of .65. It's WACC is 11.2 %, and the tax rate is 35%.

a. If Kose's cost of equity is 15 percent, what is its pretax cost of debt?

b. If instead you know that the aftertax cost of debt is 6.4%, what is the cost of equity?

 

Reference no: EM13286239

Questions Cloud

What is the best estimate of the nominal interest rate : Assuming that interest rates in the economy are expected to remain at their current level, what is the best estimate of the nominal interest rate on new bonds? Round your answer to two decimal places.
At what fraction of the speed of light is the proton moving : A cosmic-ray proton is moving at such a speed that it can travel from the Moon to Earth in 1.5s. At what fraction of the speed of light is the proton moving
Which is more relevant and why : Shanken Corp issued a 30 yr, 7% semiannual bond 7 years ago. Bond currently sells for 108 percent of its face value. Company's tax rate is 35%.
Determine the electrons speed as it left the negative plate : Two 2.40cm--diameter disks spaced 1.90mm apart form a parallel-plate capacitor. determine the electron's speed as it left the negative plate
What is the cost of equity : Kose Inc has a target debt equity ratio of .65. It's WACC is 11.2 %, and the tax rate is 35%.
What inflation rate is expected after year 1 : If the yield on 3-year Treasury bonds equals the 1-year yield plus 2.25%, what inflation rate is expected after Year 1? Round your answer to two decimal places.
Explain how many milliliters of a stock solution : How many milliliters of a stock solution of 6.0 M of HNO3 would you have to use to prepare 110 mL of 0.500 M HNO3? If you dilute 10.0 mL of the stock solution to a final volume of 0.250 L, what will be the concentration of the diluted solution
Determine the initial rate of heat transfer due to radiation : A black thin-walled cylindrical can, 10.0 cm in diameter and 20.0 cm tall is filled with water at 100°C and suspended in a 20°C room. Determine the initial rate of heat transfer due to radiation
What is its speed just before it impacts the surface : A long, solid insulating cylinder of radius R = 1 mm has a uniform volume charge density and a total linear charge density of lambda = 3.6X10^9 C/m. what is its speed just before it impacts the surface

Reviews

Write a Review

Finance Basics Questions & Answers

  What is its economic value added

Net operating profit after taxes (NOPAT) = $700; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Total operating capital = $2,100. ABC's weighted average cost of capital is 10%. What is i..

  What is the value of the stock today

Assuming the dividend will grow at a constant rate of 5 percent per year once the payments begin, what is the value of the stock today?

  Find expected dividend payout ratio

Calculation of Dividend Payout ratio - If the firm follows a residual dividend policy and has no other projects, what is its expected dividend payout ratio?

  Use appendix b and appendix d

Use Appendix B and Appendix D. Compute the price of the bonds for these maturity dates (Round "PV Factor" to 3 decimal places, intermediate and final answers to 2 decimal places.

  Prepare the entry to record the sale

The ledger of Salizer Company at the end of current year shows Accounts Receivable 110,000 , Sales 840,000, and sales Returns and Allowances 40,000.

  What are the present values of the relevant investment cash

Assume the appropriate discount rate is 9.6 percent. What are the present values of the relevant investment cash flows?

  Computation of irr as well as net present value

Computation of IRR as well as net present value and Look at the graph you draw and write a short paragraph stating what the graph

  Compute amount of new investment

Associated Breweries is considering to market unleaded beer. The finance the venture, it proposes to make a right issue with a subscription price of 10 One new share can be buy for each two shares held.

  Determine the amount deposited to get specified future value

Following are the present value factors for $1 discounted at 8 percent for 1 to 5 periods. Each of the following items is based on 8 percent interest compounded yearly.

  Computation of variance and standard deviation

Computation of Variance and standard deviation of a portfolio and what is the expected return of the portfolio

  Predicting the company likely balance sheet

Do you think the percentage of sales method may be more or less accurate in predicting the company's likely balance sheet?

  Select the best method for the company

Phoenix Corporation requires $500,000 to finance its growth and it approached a venture capitalist company to fund its future growth in business.

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