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You have acquired 30 million dollar by issuing bond. The Yield of Maturity of the bond is 8%.
You have also acquired 40 million dollar by issuing preferred stocks. The net price is 98% of par and the fixed dividend rate is 6%.
You have also acquired 10 million dollars by a long term loan from Bank ABC. The APR is 4% and is compounded annually.
There is no floatation cost of any kind, and your tax rate is 30%.
What is your after tax WACC? (Write your answer with four decimals. For example, if your answer is 7.52%, write your answer as 0.0752)
This question is worth 2 points. answer asap
The cost of equity capital is equal to the risk free rate plus an equity risk premium. In the US, over time that equity risk premium has averaged about 8.5% so that at a 3% Treasury rate, the cost of equity has averaged about 11.5%. The equity risk p..
Bowdeen Manufacturing intends to issue callable, perpetual bonds with annual coupon payments.
Assume a $250,000 investment and the following cash flows for two products. Year Product X Product Y 1 $ 90,000 $ 50,000 2 90,000 80,000 3 60,000 60,000 4 20,000 70,000 a. Calculate the payback for products X and Y. Payback Product X Years Product Y ..
Indigo Ink Supply paid a dividend of $4.5 last year on its common stock. It is expected that this dividend will grow at a rate of 8% for the next five years. After that, the company will settle into a slower growth pattern and plans to pay dividends ..
If a potential investor estimates the market value of an industrial park to be $10,000,000 and can obtain a loan with the following terms:
Zowie is a six-year-old company that specializes in immediate (less than two hours) delivery of computer peripheral devices to consumers.
Shifting Future Expenses to the Current Period as a Special Charge A company might choose to accelerate discretionary expenses, such as repairs and maintenance, into the current period if the current year’s revenue is relatively high in relation to e..
how would the nature of this venture affect the interest rate that could be expected on the loan?
Growth technology companies typically do not issue dividends to their shareholders.
A company is purchasing and installing a new machine. What is your calculated ERR? Show all your work including your cash flow diagram.
What is the sustainable growth rate?
Select a company in which you have an interest. For that company, describe a capital budgeting project (i.e., an investment in fixed assets) that might be undertaken by the company. Determine (make estimate) of the discount rate, or hurdle rate, that..
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