What is the total market value of this firm

Assignment Help Financial Management

Reference no: EM132047285

Bonds: The company issued 240,000 bonds. The bonds have 1,000 face value with 7.5% coupons with annual payments, 20 years to maturity, and currently sell for $940. The marginal tax rate is 40%z

Equity: The company has 9,000,000 shares of (common) stock outstanding, selling for $71 per share. The company’s beta is 1.2, the risk free rate is 1%, and the market risk premium is 10%.

1. What is the total market value of this firm?

2. What percent of the company’s financing is debt? What percent of the company’s financing is equity?

3. What is the after-tax cost of debt?

4. What is the cost of equity

5. What is the company’s weighted average cost of capital?

Reference no: EM132047285

Questions Cloud

Forecast the firm additional funds needed : the CEO of the Smith Group, is initiating planning for the company's operations next year, and he wants you to forecast the firm's additional funds needed (AFN)

Calculate the all-in cost : The loan is for a period of 180 days with a stated rate of 6.4 percent computed as simple interest on an actual/ 360- day basis. Calculate the all-in cost.

The capital structures used by us firms : In general, the capital structures used by U.S. firms:

Operating leverage at the accounting break-even point : What is the accounting break-even level of output for this project? What is the degree of operating leverage at the accounting break-even point?

What is the total market value of this firm : What is the total market value of this firm? What is the company’s weighted average cost of capital?

Company capital structure consists of debt : Its tax rate is 40%, and its WACC is 13.45%. What percentage of the company's capital structure consists of debt?

Explain the impact of each variable on company valuation : What are the three (3) variables that drive the valuation of a company? Explain the impact of each variable on company valuation.

What was total real return on investment : If the inflation rate was 3.2 percent over the past year, what was your total real return on investment?

What return would you estimate for this asset : What return would you estimate for this asset over the next 10 years?

User Account

All Pages