What is the firm wacc if the debt-equity ratio

Assignment Help Financial Management
Reference no: EM132061261

The Riddler's Lair has a cost of equity of 13.8 percent a pre-tex cost of debt of 6.7 percent and a tax rate of 34 percent.what is the firm's WACC if the debt-equity ratio is 0.40? (REMINDER- Debt-equity ratio of 0.3 means that for there is $0.30 debt for every $1 of equity in the capital structure)

Reference no: EM132061261

Questions Cloud

Fixed rate mortgage in which annual interest rate : You obtain a 30-year fixed rate mortgage in which the annual interest rate is 5.85%. What is your monthly payment?
What is the remaining balance on mortgage after five year : If you put 30 percent down on a home costing $150,000 with a 25-year, 9% loan, what is the remaining balance on the mortgage after five years?
What factors do you think determined the movements : Analyze Apple's revenue growth, cost increase, and net income growth. What factors do you think determined the movements.
Interest-only mortgage and adjustable-rate mortgage : Discuss the difference between roll-over mortgage, interest-only mortgage, adjustable-rate mortgage,
What is the firm wacc if the debt-equity ratio : The Riddler's Lair has a cost of equity of 13.8% pre-tex cost of debt of 6.7% and tax rate of 34%.what is the firm's WACC if the debt-equity ratio is 0.40?
What is the npv of the project to the subsidiary : The initial investment in the project is USD 300. What is the NPV of the project to the subsidiary?
Difference between callable-puttable-convertible bonds : Discuss the difference between callable/puttable/convertible bonds. Compare it with the normal bond?
What is the market estimate of the annual inflation rate : What is the market’s estimate of the annual inflation rate over the next three years?
Estimate domestic currency cash flows and npv to parent : Assuming that parity conditions hold, estimate domestic currency cash flows and NPV to the parent under the blocked scenario.

Reviews

Write a Review

Financial Management Questions & Answers

  Systematic risk is measure of return volatility

Systematic risk is a measure of return volatility in an individual stock that is specific to __________.

  Realize all of dividends described in the model

If the current market price of Connell Corp is $35, what will be your rate of return if you realize all of the dividends described in the model?

  What position in exchange-traded interest rate options

What position in exchange-traded interest rate options should it take?

  What is the value of call option on the stock

What is the value of a call option on the stock with a strike price of $41 and 46 days to expiration?

  Financial analysis for managers - oman cables industry

Prepare comparative income statements and balance sheet for years using Horizontal and Vertical Analysis techniques for the both income statements and balance sheet.

  Paid dividend and it expects that dividend to grow

Crazee Enterprises Corporation just paid a dividend and it expects that dividend to grow by 10 percent for the next three years. After that, the dividend is expected to grow at a constant rate of 5 percent in perpetuity. If the company's stock is cur..

  Contracts are governed primarily by contract common law

The Uniform Commercial Code governs sales contracts. Other contracts are governed primarily by contract common law. Identify a situation where the UCC differs from contract common law. Why do you think that difference exists?

  Covariance matrix for portfolio optimization methodology

Estimating the Covariance Matrix for Portfolio Optimization Methodology - He only cares about minimizing the risk of his investment and therefore invests in the GMVP.

  Weighted average cost of capital using market value

Webster Company has compiled the information shown in the following? table: Calculate the weighted aOKverage cost of capital using book value. Calculate the weighted average cost of capital using market value

  What is the value of this stock at the beginning

Waller Co. (WAG) paid a $0.164 dividend per share in 2003, which grew to $0.420 in 2012. This growth is expected to continue. What is the value of this stock at the beginning of 2013 when the required return is 14.0 percent? (Round the growth rate, g..

  What was the stock value when purchased

Four years ago I purchased 100 shares of the XYZ Corp preferred stock. The company pays a $6.75 annual dividend and had a required return of 19%. The most recent required return for the stock is 14%. What was the stock value when purchased? What was ..

  Standard deviation of the portfolio return

Mr. Jones has a 2-stock portfolio with a total value of $530,000. $205,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 17.10%, Stock B is 8.60%, and correlation between Stock A and Stock B is –..

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