What is the firms weighted average cost of capital wacc

Assignment Help Finance Basics

Reference no: EM13799211

The market risk premium is 7.2. The firm's required return is 11.2%. The risk-free rate is 5%. What is the firm's beta?
Your portfolio has a beta of 1.4. The portfolio consists of $30,000 of GM and $20,000 of Ford stock. GM's beta is 1.1. What is the beta of Ford?
The balance sheet for Stratton Co. shows $400,000 in common equity, $100,000 in preferred stock, and $500,000 in long-term debt. The company has 20,000 common shares outstanding at a market price of $65 per share. The firm's 4,000 shares of preferred stock are currently priced at $50 per share. The firm has 500 bonds outstanding selling at par value ($1,000). The company's before-tax cost of debt is 6%. The cost of common stock and preferred stock are estimated to be 10% and 7% respectively. If the firm's marginal tax rate is 40%, what is the firm's weighted average cost of capital (WACC)?
You are evaluating the proposed acquisition of a machine that costs $220,000. The machine will result in increased sales of $120,000 per year for 3 years, but costs will increase by $25,000 per year. The machine will be depreciated 3 years MACRS and will be sold for an estimated $50,000 after 3 years. NWC will increase by $75,000 and remain constant for the life of the project. The firm's tax rate is 40 percent and discount rate is 9 percent. Calculate the project's cash flows. MACRS for 3 years: Year 1 Year 2 Year 3 33.33% 44.45% 14.81%

Reference no: EM13799211

Questions Cloud

What you think top three priorities are for a chn working : discuss what you think the top three priorities are for a CHN working with them. Cite at least one scholarly reference that supports your decision.

Child and adolescent safety statistics : Child and Adolescent Safety Statistics

Explain why the marketing plan objectives should be in line : Differentiate between the organization's stated objectives as to whether they are marketable or non-marketable objectives.

Explore time when connection was made between you and other : Explore a time when you felt like "other"-when you were made to feel invisible, excluded, or too visible. Explore a time when a connection was made between you and an "other."

What is the firms weighted average cost of capital wacc : The market risk premium is 7.2. The firm's required return is 11.2%. The risk-free rate is 5%. What is the firm's beta? Your portfolio has a beta of 1.4. The portfolio consists of $30,000 of GM and $20,000 of Ford stock. GM's beta is 1.1. What is the..

Problem related to the impacts of oil : The book talks at length about the many positive and negative effects of oil on the NASWA realm, particularly on the Middle East region but also others.

How the concepts of supply and demand relate : Discuss how the concepts of supply and demand relate to microeconomics and macroeconomics - Is the scenario a macroeconomic or microeconomic example of supply and demand?

What were the rates of the crime for each area : What were the rates of the crime for each area?

Structure of the interior of the planet : Based on the P and S wave info, what do you conclude about the structure of the interior of the planet relative to that of Earth?

User Account

All Pages