Reference no: EM13196079
Surgico, a manufacturer of consumer plastic products, is evaluating its capital structure. The balance sheet of the company is as follows (in millions):
In addition, you are provided the following information:
- The debt is in the form of long-term bonds, with a coupon rate of 10%. The bonds are currently rated AA and are selling at a yield of 12%. The market value of the bonds is 80% of the face value.
- The firm currently has 50 million shares outstanding, and the current market price is $80 per share.
- The stock currently has a beta of 1.2. The Treasury bond rate is 8% and the market risk premium is 5.5%. The tax rate for this firm is 40%
a. What is the debt-equity ratio for the firm in book value terms? In market value terms?
b. What is the firm's cost of equity?
c. What is the firm's after-tax cost of capital?
|
What factors represent the length and width of that recangle
: suppose the trinomial x2 - x - 2 represents the area of a rectangle. what factors represent the length and width of that recangles.
|
|
Essay proposal for anthropology class
: I need an Essay proposal for anthropology class. I am willing to pay upto $25 for it. Specifically, you should identify the two cultures or culture areas that you will compare and the theme that will form the basis for your comparison.
|
|
Explain how to prepare the buffer solution
: Describe how you would prepare the buffer solution using one of the weak bases listed in the Table below and any other necessary reagents.
|
|
How many miles would you need to drive to pay less
: solve using inequality A car rental company has two rental rates. Rate 1 is $63 per day plus $0.18 per mile. Rate 2 is $126 per day plus $0.09 per mile. If you plan to rent for one week, how many miles would you need to drive to pay less by taking..
|
|
What is the firms cost of equity
: What is the debt-equity ratio for the firm in book value terms? In market value terms and what is the firm's cost of equity?
|
|
How far directly north of site b should a second explosion
: The recording devices record the time the sound reaches each one. How far directly north of site B should a second explosion be done so that the measured time difference recorded by the devices is the same as that for the first detonation?
|
|
What is the probability that not enough seats
: An airline estimates that 98% of people booked on their flights actually show up. If the airline books 76 people on a flight for which the maximum number is 74, what is the probability that not enough seats will be available on the plane? Round an..
|
|
Violating the counterfeit access device
: Sally is charged with violating the Counterfeit Access Device and Computer Fraud and Abuse Act (CFAA). Crime under the CFAA involves
|
|
Find the quadratic equation in vertex
: a baseball is hit 3 feet above home plate. It will reach its highest point of 83 feet 125 feet from home plate.
|