What is the firms weighted average cost of capital

Assignment Help Financial Management

Reference no: EM13919878

Jett’s Carwash has $4 billion in debt and $2 billion in equity. The firm’s cost of debt of 3.3 percent and a cost of equity of 14.4 percent (assume that these costs do not change with the capital structure). The tax rate is 35%. What is the firm’s weighted average cost of capital? Enter your answer rounded to four decimal places (ex. 0.0325).

Reference no: EM13919878

Questions Cloud

Marketing research process : Question 1: The most scientifically valid research is __________ research. Question 2: The marketing research process begins by:

Assume that all transactions involve the receipt or payment : Mabry's Consulting Services experienced the following transactions for 2013, the first year of operations, and 2014. Assume that all transactions involve the receipt or payment of cash.

Design a drainage and pumping system : You are required to design a drainage and pumping system to deal with the mine water for the next 10-15 years based on the data - Describe your proposed drainage and pumping system with the aid of diagrams where required and explain the general phil..

Single mother with two children : Susan Beale is a single mother with two children, ages three and six. She pays a total of $7,000 each year to a neighbor to care for her children while she works. Her employer reimburses $4,000 of this amount

What is the firms weighted average cost of capital : Jett’s Carwash has $4 billion in debt and $2 billion in equity. The firm’s cost of debt of 3.3 percent and a cost of equity of 14.4 percent (assume that these costs do not change with the capital structure). The tax rate is 35%. What is the firm’s we..

Stage in a straight rebuy situation : Which of the following is a stage in a straight rebuy situation?

Effective annual percentage cost of non-free trade credit : Howes Inc. purchases $4,562,500 in goods per year from its sole supplier on terms of 3/13, net 57. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit?

Total tax savings : This year Carrie decided to take some classes at the local community college to help improve her skills as a school teacher. The community college is considered to be a qualifying post-secondary institution of higher education. What is the total tax ..

What is the cost of equity if you ignore taxes : Winter's Toyland has a debt-equity ratio of 0.58. The pre-tax cost of debt is 8.1 percent and the required return on assets is 15.1 percent. What is the cost of equity if you ignore taxes?

User Account

All Pages