What is the firm wac

Assignment Help Business Economics
Reference no: EM132414201

A firm is currently financed with $400 of debt and $600 of equity. The expected return on the debt is 5%. The market beta of the firm's equity is 1.2; the risk -free rate is 2%; and the equity premium is 6%. The firm pays taxes at the marginal rate of 40%. What is the firm's WAC? Round your answer to the nearest tenth of a percent.

which of these answers is true?

Reference no: EM132414201

Questions Cloud

How much money will beanie need to have in 18 years : He expects college to cost $50,000 per year (paid at the end of the school year) for each of the four years his child is in school.
Estimate the amount of financing : How should a corporation estimate the amount of financing that must be raised externally during a given year?
What is the estimated project npv : The appropriate after-tax cost of capital is 10%, and the firm pays taxes at the marginal rate of 35%. What is the estimated project's NPV?
Capital structure decision of the nation firms : A new tax law is passed that increases both corporate and personal tax rates. What effect will this likely have on the capital structure decision of the nation'
What is the firm wac : The firm pays taxes at the marginal rate of 40%. What is the firm's WAC? Round your answer to the nearest tenth of a percent.
What is the present value of the tax savings : If the firm is in the 35% tax bracket and the appropriate discount rate is 9%, what is the present value of the tax savings?
BSBINN801 Lead innovative thinking and practice Assignment : BSBINN801 Lead innovative thinking and practice Assignment Help and Solution, Alpha Institute - Assessment Writing Service - Identify and describe a creativity
What will the npv be on the proposed project : What will the NPV be on the proposed project based on a weighted average cost of capital of 12%? Additionally, what will the project's IRR be?
STAT 645 - Biostatistics Assignment Problem : STAT 645 - Biostatistics Assignment, Homework Help, Texas A&M University, USA. Compute the range (maximum minus minimum) for each row

Reviews

Write a Review

Business Economics Questions & Answers

  Represent the citizenry

Discuss if you think policy makers truly represent the citizenry or are they pressured by third party special interest groups that support their campaigns.

  American airlines announced a new pricing strategy

American Airlines announced a new pricing strategy that they believed would address concerns and benefit the company. Conduct further research on American Airlines' value pricing.

  How strategic flexibility and real options work

Need real life examples of how strategic flexibility and real options work.

  Cause an increase in the supply of cotton

Which of the following would not cause an increase in the supply of cotton?

  Comment basically said that the global economy was weak

Recently the stock market reacted positively to Janet Yellen’s comment. She had stated that due to the underlying economic weakness abroad and susceptibility of the US economy to such weakness the fed was not going to increase the interest rate as ra..

  Market supply increases and simultaneously-market demand

If the market supply increases and, simultaneously, market demand decreases, the new equilibrium will show:

  Is an oligopoly inevitable in the diamond industry

Is an oligopoly inevitable in the diamond industry? And what components are needed to ensure that price will remain unchanged?

  Rate of return on the discount bond

You buy a discount bond for $925. It has a face value of $1000. You hold the bond to maturity. What is the rate of return on the discount bond when it matures?

  Tightening of consumer credited effected individual

How has the tightening of consumer credited effected individual spending and in turn the U.S. economy? Has this strategy by the financial institutions.

  Bank of korea chose to maintain relatively

Suppose the Bank of Japan allowed the money supply to grow by 2% each year, whereas the Bank of Korea chose to maintain relatively high money growth of 10% per

  What is your yield to? maturity

Abner? Corporation's bonds mature in 24 years and pay 11 percent interest annually. If you purchase the bonds for $1,200 what is your yield to? maturity?

  Saving obtained-eliminating present equipment and labor cost

The management of a private hospital is considering the installation of an automatic telephone switchboard, which would replace a manual switchboard and eliminate the attendant operator’s position. Disregarding inflation, how large an investment in t..

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