What is the wacc

Assignment Help Business Economics
Reference no: EM132124296

Eggs,Inc. reported earnings available to common stock of $4200000 last year. From these earnings, the company paid a dividend of $1.26 on each of its 1000000 common shares outstanding. The capital structure of the company includes 40% debt, 10% preferred stock, and 50% common stock. It is taxed at a rate of 40%. The market price of the common stock is $40 and dividends are expected to grow at a rate of 6% for the foreseeable future.The company plans to issue $2.00 dividend preferred stock for a market price of $25.00 per share. Flotation costs would amount to $3.00 per share.In addition,the company will also issue $1000-par-value, 10% coupon, 5-year bonds that can be sold for $1200 each. Flotation costs would amount to $25.00 per bond. What is the WACC?

Reference no: EM132124296

Questions Cloud

How do they support communication and e-business : How does the Internet and Internet technology work, and how do they support communication and e-business?
Advances received on sales contract : Allowance for doubtful accounts. Merchandise held on consignment. Advances received on sales contract.
Four stages of graham model of business negotiations : Briefly discuss the four stages of Graham's model of business negotiations.
Why is it important for burger king to add new products : Why is it important for Burger King to add new products? What are they trying to accomplish by adding more products?
What is the wacc : Eggs,Inc. reported earnings available to common stock of $4200000 last year. From these earnings, the company paid a dividend of $1.26
Identify the parties to the warranty : Identify the parties to the warranty? What are the implied warranties? What are the express warranties?
What is the ear on loan : Soma needs loan from Para. Soma needs $14,400 and Para agreed to lend the $14,400 if Soma makes one payment to Para in the amount of $18,000
Cost of new common stock : Using the constant growth valuation model, determine (1) the cost of retained earnings, rr , and (2) the cost of new common stock, rn
How over the past 3 years : How over the past 3 years, has Cash and Futures Oil Price volatility affected the Australian equity market.

Reviews

Write a Review

Business Economics Questions & Answers

  Calculate the price elasticity of supply for copper

Suppose the current price of copper is $3 per pound and the quantity supplied is 200 pounds per day. If the price of copper falls to $2.50 per pound, the quantity supplied drops to 180 pounds per day. Use the midpoint formula to calculate the price e..

  Explain forward exchange rates determination

Which of the following is used to explain forward exchange rates determination? Nonexclusionary, as it relates to public goods means,

  Examining the mobile digital divide

The digital divide is the term used to describe the gap between people and communities that have access to information and communication technology (ICT) and those that do not. Ethicists worry about disadvantaging the socioeconomic groups that do ..

  What is the threshold value of discrimination coefficient

what is the threshold value of the discrimination coefficient "d" at which prejudiced businesses will start hiring only white workers?

  Children in the experimental? group

6,000 children in the experimental? group,73 developed the disease. Of 6,000 children in the control? group,119 developed the disease.

  In which direction will the curve shift

The price of tomatoes rises. How will this affect the market for pizza? Answer the following:

  The middle of one-year rental contract

You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $700,000 per month, and you have contractual labor obligations of $1,250,000 per month that you can’t get out of. What happen..

  Nominal exchange rate

A person who paid $10 for an umbrella in the U.S. sees the exact same umbrella in a store in London, England for 6 British pounds. If the person could expect the real exchange rate to be 1 U.S. umbrella per 1 English umbrella, then the person could i..

  What influence do consumers have on market structures

What influence do consumers have on market structures? What influence do producers have?

  Effect on output of two additional units

1) Using the concept of the differential, determine the effect on output of two additional units of labor when K = 8, N = 20

  Activities contribute to the us economy

How do the following activities contribute to the US Economy?

  Explain the theories of new trade and national competitive

Describe the relationship between international trade volume and world output, and identify overall trade patterns. Explain theories of absolute advantage, comparative advantage, factor proportions, and international product life cycles. Explain the ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd