Ninecent Corporation has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Its cost of equity is 12 percent, the cost of preferred stock is 8 percent, and the pretax cost of debt is 9 percent. The relevant tax rate is 24 percent. What is the company’s WACC? What is the aftertax cost of debt?
Q: M stock currently sells for 100 dollars per share. The implied volatility equals 20.0. The risk-free…
A: Delta of call option indicates that how much change in price of call option will be there with…
Q: What is Eurodollar futures? Why and when will a company use Eurodollar futures?
A: We need to explain Eurodollar futures and why and when they are used.
Q: The stock of Alpha Tool sells for $70.20 per share. Its current dividend rate, D0, is $2 per share.…
A: Concept. According to Gordon's growth model , P =[ D (1+g) ] ÷ ( ke - g) Where , P = current market…
Q: A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of…
A:
Q: Compare graphically the exchange rates between the two currencies between the period mid 2007 – mid…
A: The exchange rate refers to the rate at which one currency can be exchanged for another. Since a…
Q: b. What is the balance of the loan at the end of year Round to the nearest cent c. By how much will…
A: Loans are paid by the monthly payments that carry the payment for interest and payment for principal…
Q: The stock price of Company XYZ can only have 5 possible stock price (PhP10, PhP20, PhP30, PhP40 and…
A:
Q: You will be paying $12,200 a year in tuition expenses at the end of the next two years. Bonds…
A: Given: Particulars Amount Tuition expenses $12,200 Year 2 Yield 9% Yield 10% Yield 8%
Q: 29. If the future is 25% more than the principal after 8 months, determine the simple interest rate.…
A: In case of the simple interest the interest amount is computed only on the initial principal amount.…
Q: Find the future value for the constant growth annuity where the rate of growth is 0.75%, the…
A: Concept. FV = A [(1+r)n - (1+g)n ] ÷ ( r-g) Where , FV = future value A = timely payment r =…
Q: Selling price of home: $198,000 Down payment: $60,000 Principal (loan): 138,000 Rate of interest:…
A: Here, To Find: Part A. Payment per $1,000 =??? Part B. Monthly mortgage payment =????
Q: The common stock of XMen Inc. had the following historic prices. Time Price of X-Tech…
A: The formula for calculating holding period return is = [(End Price - Beginning price) + Income…
Q: Consider a project that has an initial outlay of $1,200. The firm's cost of capital is 10%. The…
A: Net present value(NPV) of a project is calculated using following equation NPV = -CF0 + CF1/(1+d)1 +…
Q: Periodic Payment Payment Interval Term Interest Rate Conversion Period $3990 1 month 8 years 7%…
A: Future value refers to the value of a current asset at some future date affected by the interest…
Q: An individual is 42 years old. At the end of each month, he deposits $320 in a retirement account…
A: concept. 1. future value of annuity. FV = PMT * [(1+i)n - 1]i where , FV is future value of annuity…
Q: t are some of the limits of diversification ben
A: Diversification is extending the investment through various stocks so that overall risk is reduced…
Q: Steve's, a maker of swizzle sticks, is considering the purchase of a new plastic stamping machine.…
A: The IRR is the rate at which the Net present value is zero. It is the rate at which the present…
Q: Q1) Assume Supervisors promotion to a Manager position. How might you assess this person' leadership…
A: A finance supervisor refers to a person who is overseeing the accounting system of organizations and…
Q: For his business, Nicholas leased equipment valued at $23 000. The terms of the lease required…
A: In contrasts to a fee that the borrower may pay the lender or another party, interest is a payment…
Q: 27.In a loan with 20% simple interest, the future amount is P2,000 more the principal after one…
A: Simple interest is quite simple there is no compouding of interest and there is no interest on…
Q: A credit card company determines a card holder's minimum monthly payment by adding all new interest…
A: The total outstanding balance as of November 10th is $1,376 (van repairs ($654) + equipment…
Q: QUESTION 15 If up-front refinancing fees 15% of the new mortgage amount, what is the net present…
A: As per the given information: Up-front refinancing fees = 1.5% of the new mortgage amountRate of…
Q: The risk-free return is 5%, Company x has a beta of 1.5 and an expected return of 20%. Calculate the…
A: Solution:- Capital Asset Pricing Model (CAPM) is an equity model which calculates the required rate…
Q: he investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and…
A: Net present value is time value based capital budgeting methods that are being used mostly and in…
Q: - The common stock of Permanent Assurance Corporation currently trades at $40.00 per share, which is…
A: The growth of the company is very important for long term creation of value for shareholders and…
Q: 16. Shars 500 Offer Price Total Cost Net Asset Jalue Proceeds Per Share $10.80 $12.60 Dividend -B…
A: The return on investment is a measure of the efficiency of an investment in producing profits. It is…
Q: Company 0:1 Commision Number of Purchace Price Selling vice Buy Sell ODPlot Tital Prouds Gain Shares…
A: The commission is added to cost proceeds to arrive at net cost proceeds whereas the commission is…
Q: 1 2 3 4 5 6 7 8 19 20 Daniel and Jan agreed to pay $560,000 for a four-bedroom colonial home in…
A: Amortization Table: The whole table of periodic loan payments, including the sum of principal and…
Q: Calculate annual interest in dollars and current yield as a percent of the bond. Round your…
A: The annual interest on the bond is the coupon amount paid on the face value of the bond. The current…
Q: profile-image Klieman Company’s perpetual preferred stock sells for $86 per share and pays a $10…
A: Annual dividend (D) = $10 Current price (P0) = $86 Flotation cost (F) = 0.054 Cost of preferred…
Q: Beta of a portfolio. The beta of four stocks-G, H, I, and J-are 0.42, 0.75, 1.19, and 1.65,…
A: Beta of portfolio with stock G, H, I and J is calculated using following equation Beta of portfolio…
Q: (Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.9 percent annual…
A: Par Value is $1,000 The annual coupon rate is 7.9% Time to maturity is 15 years Price of bond is…
Q: Suppose that you purchase a share of stock for 78 dollars, and you purchase for 11 dollars a call…
A: Solution:- Buying a call option means right to buy the share at strike price, if at maturity the…
Q: A debt of $45,000 is repaid over 13 years with payments occurring monthly Interest is 6% compounded…
A: Here, To Find: Part A. Size of periodic payment =? Part B. Outstanding principal after payment 88…
Q: What is the relationship between strategic planning and financial planning? How do you do…
A: Strategic planning - It refers to the art of creating, implementing, and evaluating the results of…
Q: Which of the following are not assumptions of technical analysis? History tends to repeat itself…
A: The fundamental analysis is the analysis of balance sheet and income statement of the company and…
Q: Part III: You have decided that you would like to buy a townhouse in 8years and will need a down…
A: Required down payment of $30,000 The interest rate is 3.50% The time period is 8 years To Find:…
Q: Which of the statements below describes the correct capital budgeting decision rule? i. Reject a…
A: Investors assess the value of a possible investment project through the capital budgeting process.…
Q: (a) The first payment includes $157.50 interest. How much principal is in the 1" payment?…
A: Loans are paid by equal monthly payments and these payments carry the payment for interest and…
Q: You are a financial adviser working with a client who wants to retire in eight years. The client has…
A: The bank generally provides compounded interest, which means the interest is earned on interest. The…
Q: The common stock of Permanent Assurance Corporation currently trades at $40.00 per share, which is…
A: Note: Answer to parts 1-4 is incorrect as the expert has incorrectly taken the dividend value and…
Q: Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds…
A:
Q: Which of the following is FALSE about debt? A) Private debts include bank loans and private…
A: Several statements have been given about debt. We have to find the one that is FALSE.
Q: 42.50
A: So the loan amount =2200-800=1400,
Q: ou have 4 types of assets in your portfolio: Corporate bonds earn 2% return and make up 5% of your…
A: Corporate bonds earn a 2% return and makeup 5% of your portfolio. Large-cap stocks earn a 15% return…
Q: An investor buys one American Call option on one share of stock of ABC. The option's strike price is…
A: An American call option is a type of option where the holder of the call can ask for the delivery of…
Q: You want to calculate the 30 Day 95% VaR for the following portfolio. You invest $5 million in the…
A: We have to find the 30 day 95% VaR of a portfolio of two assets.
Q: Renaissance Capital Group is considering allocating a limited amount of capital investment funds…
A: Payback period Net present value Present value index
Q: The present value of a 10-year annuity immediate is 10,000$. The interest rate is j1=5% for the…
A: The interest rate changes over the lifespan of the annuity. We have the present value. We need the…
Q: IDX Technology is a privately held developer of advanced security systems. As part of your business…
A: Discounted cash flow The cash that flows in and out of a project is known as its cash flow. When…
Ninecent Corporation has a target capital structure of 60 percent common stock, 5 percent
-
What is the company’s WACC?
-
What is the aftertax cost of debt?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Fama's Llamas has a weighted average cost of capital of 10 percent. The company's cost of equity is 14 percent and its pretax cost of debt is 7.5 percent. The tax rate is 25 percent. What is the company's debt-equity ratio?Mullineaux Corporation has a target capital structure of 46 percent common stock, 5 percent preferred stock, and the balance in debt. Its cost of equity is 15.8 percent, the cost of preferred stock is 8.3 percent, and the aftertax cost of debt is 6.8 percent. What is the WACC given a tax rate of 23 percent?Take It All Away has a cost of equity of 11.14 percent, a pretax cost of debt of 5.34 percent, and a tax rate of 21 percent. The company's capital structure consists of 66 percent debt on a book value basis, but debt is 32 percent of the company's value on a market value basis. What is the company's WACC?
- Take It All Away has a cost of equity of 10.57 percent, a pretax cost of debt of 5.29 percent, and a tax rate of 21 percent. The company's capital structure consists of 69 percent debt on a book value basis, but debt is 29 percent of the company's value on a market value basis. What is the company's WACC? Multiple Choice a)7.30% b)8.72% c)11.96% d)9.04% e)9.64%Targaryen Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 12 percent, the cost of preferred stock is 6 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 24 percent. a. What is the company’s WACC?Healthy Snacks, Inc. has a target capital structure of 55 percent common stock, 5 percent preferred stock, and 40 percent debt. Its cost of equity is 14.3 percent, the cost of preferred stock is 8.9 percent, and the pretax cost of debt is 8.1 percent. What is the company's WACC if the applicable tax rate is 35 percent?
- Starset, Incorporated, has a target debt-equity ratio of 0.76. Its WACC is 10.5 percent, and the tax rate is 32 percent. If the company's cost of equity is 14.5 percent, what is the pretax cost of debt? If instead you know that the aftertax cost of debt is 6.7 percent, what is the cost of equity?Wilmore Company Limited is a levered entity with percentage of debt out of total capital being 40%. If the interest rate on a bank loan is 10%, the tax rate is 20%, and the cost of equity is as computed in (a), what will be the after tax cost of debt?Paraglide Corp. has a target debt-equity ratio of .48. Its cost of equity is 16.4 percent, and its pretax cost of debt is 8.2 percent. If the tax rate is 34 percent, what is the company's WACC? 11.28 percent 11.72 percent 13.20 percent 12.84 percent 12.91 percent
- M&M Corporation has a WACC of 20 percent. Its cost of debt is 13 percent. If habitat’sdebt-equity ratio is 1.5, what is its cost of equity capital. Ignore taxes in your answer.Mullineaux Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity is 13 percent, and the cost of debt is 6 percent. The relevant tax rate is 35 percent. What is Mullineaux's WACCYou are given the financial information for the Unic Company: Earnings Before Interest and Tax (EBIT) = $126.58 Corporate tax rate (TC) = 0.21 Debt (D) = $500 Unlevered cost of capital (RU) = 0.20 The cost of debt capital is 10 percent. Question: Determine the value of Unic Company equity? Determine the cost of equity capital for Unic Company? Determine the WACC for Unic Company?