Find out wacc, Financial Management

Assignment Help:

Directions: Use the information below to calculate the WACC and its components for Hawk Corp.

WACC= (%CE)(cost of CE) + (%PE)(cost of PE) + (%D)(cost of D)(1-T) Type of capital

# of units

Per unit mkt value (Po)

Total mkt value (# units X unit value)

Weight (Mkt value of each/ Total market value)

Common equity (CE)

15,675,000

$49.60

Preferred equity (PE)

3,250,000

$89.50

Debt (D)

35,000

$962

Total mkt value>

100%









 

1. What percentage of Hawk Corp's capital structure is in common equity?

2. What percentage of Hawk Corp's capital structure is in preferred equity?

3. What percentage of Hawk Corp's capital structure is in debt?

4. What is Hawk Corp's cost of common equity?

5. What is Hawk Corp's cost of preferred equity?

6. What is Hawk Corp's cost of debt?

7. What is Hawk Corp's WACC?


Related Discussions:- Find out wacc

What are assumptions of walters dividend model, Q. What are assumptions of ...

Q. What are assumptions of Walters dividend model? 1. Constant Return and Cost of Capital: - The Walter' model presume that the firm's rate of return and its cost of capital ar

Calculate the net present value-investment proposal, As you checked the Ans...

As you checked the Answer Key to Question 6 in the Mastery Check from this lesson you may have noted that each year's net cash flows are calculated by adding depreciation back to n

Sales managers view on exchange risk, The sales manager considers that ther...

The sales manager considers that there will be substantial foreign exchange risk in trading with Werland. Payment is unpaid in Werland francs in three months time. The current ster

Companies accuse investors of performing credit sales, At times, companies ...

At times, companies accuse investors of performing credit sales that they make their quotations fall. Is that true? It is true: there are companies that accuse investors who pe

Current scenario of hedge fund industry, Global Scenario The Hedge Fund...

Global Scenario The Hedge Fund industry has captured over US $ 2 trillion in assets globally by the end of year 2006. According to an investor survey revealed for the Hedge Fun

Compute the dividend policy and the value of the firm, Q. Compute the divid...

Q. Compute the dividend policy and the value of the firm? Rate of Return: (i) 15% (ii) 10% (iii)8% Cost of Capital (Ke) = 10% Earning per share (E) = Rs. 10 C

Explain speculator - market participants, Explain Speculator - Market Parti...

Explain Speculator - Market Participants A speculator attempts to profit from a modification in the futures price. For doing this, the speculator will take a long or short posi

Process of bringing a new international bond issue to market, Discuss the p...

Discuss the process of bringing a new international bond issue to market. Answer:  A borrower desiring to increase funds by issuing Eurobonds to the investing public will conta

#WALTOR''S MODEL., CAPITALISATION RATE=0.01 EARNINGS PER SHARE(E)=10 ASSUME...

CAPITALISATION RATE=0.01 EARNINGS PER SHARE(E)=10 ASSUME RATE OF RETURNS ON INVESTMENTS (R):15

Write Your Message!

Captcha
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