What would the cost of equity be if the debt-equity ratio

Assignment Help Finance Basics
Reference no: EM132285122

Crosby Industries has a debt-equity ratio of 1.7. Its WACC is 11 percent, and its cost of debt is 8 percent. There is no corporate tax.

What would the cost of equity be if the debt-equity ratio were .7? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Reference no: EM132285122

Questions Cloud

Before-tax cost of borrowing from friends : John n charges you? 5% and Mary charges you? 10%. What is your combined? before-tax cost of borrowing from your? friends?
What is the concept of cash flow in corporate : What is the concept of cash flow in corporate finance and how is it relevant to real-world situations?
Forward rate of the british pound : If the BP's spot rate is $1.3067, what should the one-year forward rate of the British pound be?
What is the cost of capital : A stock has a current price P0=$2.50 and an expected future sale price that will occur at the end of the year P1 = $3.15 when the dividend is paid Div1=$0.50.
What would the cost of equity be if the debt-equity ratio : Crosby Industries has a debt-equity ratio of 1.7. Its WACC is 11 percent, and its cost of debt is 8 percent. There is no corporate tax.
Price of the stock after the announcement : Assuming that the discount rate remains the same, what will be the price of the stock after the announcement?
What is the price of the stock : What is the price of the stock? (Round your answer to 2 decimal places and record your answer without dollar sign or commas).
Bond yield to maturity : Compute the price of a $1,000 par value, 6 percent (semi-annual payment) coupon bond with 26 years remaining until maturity assuming
Yield to maturity on the bond : Compute the price of a $ 3,832 par value, 14 percent coupon consol, or perpetual bond (i.e., coupon interest payment is a perpetuity),

Reviews

Write a Review

Finance Basics Questions & Answers

  Explain the determinants of consumption

Explain the determinants of consumption (current after-tax income, wealth, debt, and present value of expected income). Why do they matter

  You are leasing a car worth 32000 for 36 months you put

you are leasing a car worth 32000 for 36 months. you put down 1200 now and agree to monthly payments. the residual

  What is the beta of stock

The return on the market is 10.8 percent and the risk-free rate of return is 3.8 percent. What is the beta of this stock?

  What is the actual rate being charged on these loans

The pawn shop loans money at an annual rate of 23 percent and compound interest weekly. What is the actual rate being charged on these loans? Suppose there are 365 days in a year and 7 days in a week and round the compounding frequency to the near..

  What is the payout and the profit

You purchase an IBM call contract at $120 for a premium of $5. You hold the option until expiration, when share price is $123.

  Fremont enterprise has an return of 15 and laurelhurst

fremont enterprise has an return of 15 and laurelhurst news has an expected return of 20. if you put 10 of your

  How much additional short-term funding can it borrow

If Mitchem expands its receivables and inventories using its short-term line of credit, how much additional short-term funding can it borrow before its current ratio standard is reached?

  Determine the monthly payments

If Hudson Corporation borrows $500,000 on a 10% add-on basis, payable in twelve equal end-of-month installments, how large would the monthly payments be?

  Show what bank zs balance sheet of assets

Now assume that Bank Z makes a loan in the amount that can be safely lent against the funds deposited in its bank from the transaction described in (b). Show what Bank Z's balance sheet of assets and liabilities would look like after the loan.

  What is the yield to maturity on bond

The Saleemi? Corporation's ?$1,000 bonds pay 7 percent interest annually and have 11 years until maturity. You can purchase the bond for ?$905.

  Manufacture wine goblets

You manufacture wine goblets. In mid-June, you receive and order for 10,000 goblets from Europe. Payment of €400,000 is due in mid-December. You expect the €uro to rise from its present rate of $1=€1.5, to a rate of $1=€1.4 by December.

  How much interest would you be paying in year 2

Your bank offers to lend you $100,000 at an 8.5% annual interest to start your new business. The terms require you to amortize the loan with 10 equal end-of-year payments. How much interest would you be paying in Year 2? Explain.

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