What is the firms weighted average cost of capital

Reference no: EM131642032

Question:

The Rogers Company is currently in this situation: (1) EBIT = $4.million; (2) tax rate, T = 35%; (3) value of debt, D = $2 million; (4) kd = 10%; (5) ks = 15%; (6) shares of stock outstanding, n0 = 600,000. the firm''s market is stable and its expect no growth,so all earnings are paid out as dividends.

The debt consists of perpetual bonds.

a. what are the total market value of the firms stock, S, its price per share, Po and the firms total market value,v?

b. what is the firms weighted average cost of capital?

Attachment:- invoice.pdf

Reference no: EM131642032

Questions Cloud

What challenges face multinational corporations : Discuss working conditions around the world. What challenges face multinational corporations?

Explain the trade-off between risk and reward : You often hear about the trade-off between risk and reward. Is this trade-off part of decision making under uncertainty when the decision maker.

Critique the federal response in regard to hurricane katrina : Critique the local, state, and federal response in regard to Hurricane Katrina. Use specific examples to support your critique.

Distinctions in recuperative medical care-palliative care : What are the fundamental distinctions between recuperative medical care and palliative care?

What is the firms weighted average cost of capital : what are the total market value of the firms stock, S, its price per share, Po and the firms total market value - what is the firms weighted average cost

Discuss how and why these norms affect our ability : Discuss how and why these norms affect our ability to solve global problems referring to the course material.

Define monetary consequences of all possible outcomes : Can you ever use the material in this chapter to help you make your own real-life decisions? Consider the following.

Efforts to promote responsible drinking : A beer company offers to sponsor the even for $25,000 as part of its efforts to promote responsible drinking. As head of the charity

Discuss endothelial cells are damage inflammatory cytokines : When endothelial cells are damage inflammatory cytokines are released, which cytokines are released and why is this important

User Account

All Pages