Given the following information, calculate the weighted average cost of capital for Digital Processing Inc. Percent of capital structure: Preferred stock Common equity Debt 20% 40 40 Additional information: |Corporate tax rate Dividend, preferred Dividend, expected common Dividend, preferred Growth rate 25% $8.50 $2.50 $105.00 7% Bond yield Flotation cost, preferred Price, common 9.5 $3.60 $75.00 You are required to calculate: a. Cost of debt (after tax) b. Cost of preferred stock c. Cost of common equity d. WACC
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- Define each of the following terms: Weighted average cost of capital, WACC; after-tax cost of debt, rd(1 – T); after-tax cost of short-term debt, rstd(1 – T) Cost of preferred stock, rps; cost of common equity (or cost of common stock), rs Target capital structure Flotation cost, F; cost of new external common equity, reWhat is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Interest rate on government bonds SKYE's equity beta Historical excess return on stocks Tax rate Note: Enter your answer to 1 decimal place. Weighted-average cost of capital % 1 million $ 21 7.68% $12 million 9% 4% 0.75 5.6% 30%Given the following information: Percent of capital structure: Preferred stock Common equity (retained earnings) Debt Additional information: Corporate tax rate. Dividend, preferred $ 5.00 Dividend, expected common $ 5.50 Price, preferred $101.00 Growth rate Bond yield. 34% 4% 5% Flotation cost, preferred $5.20 Price, common $ 74.00 Debt Preferred stock Common equity (retained earnings) Weighted average cost of capital 20% 70 10. Calculate the weighted average cost of capital for Digital Processing Inc. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Notice that this problem asks for the weighted costs. These are the unweighted costs times the weights. Like this: (ka)(wa) weighted cost of debt. Weighted Cost % 0.00%
- Given the following information regarding Builtrite's capital structure, calculate its weighted average cost of capital assuming a 40% tax bracket. Type of Cost Debt (before tax) Preferred Stock Common Stock O 12.82% 12.97% O 11.50% 11.76% Target N 40 30 50 Cost 10% 11% 16 %Question: Calculate weighted average cost of capital for Puppet corporation. Assume the funds are internally generated. Percent of capital structure: Debt - 54% Common Equity - 32% Preferred stock - 14% Additional information: Bond coupon rate - 9% Bond yield - 9% Bond flotation coat - 1% Dividend, common(just paid) - $1.30 Pride, common - $ 37 Dividend, preferred - 8% price. preferred - $37 Flotation cost, preferred - $1.79 Flotation cost ,common - 8% Corporate growth rate - 10% Corporate tax rate - 35%Insight Ltd. has the following capital Structure & after-tax Cost for different sources of funds used: Source of Funds Amount After-tax Cost Debt 15,00,000 5 Pref. Shares 12,00,000 10 Eq. Shares Retained Earnings 18,00,000 12 15,00,000 11 You are required to Calculate Weighted Average COC.
- Given the following information: Percent of capital structure: Debt Preferred stock Common equity (retained earnings) Additional information: Bond coupon rate Bond yield to maturity Dividend, expected common Dividend, preferred Price, common Price, preferred Flotation cost, preferred Growth rate Corporate tax rate 40% 20 40 12% 10% $ 6.00 $ 13.00 $ 65.00 $ 122,00 $ 4.00 9% 30% Calculate the Hamilton Corporation's weighted cost of each source of capital and the weighted average cost of capital. Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.Blazingame Inc.'s capital components have the following market values. Debt$34,030,000Preferred Stock16,500,000Common equity47,860,000 Calculate the firm's capital structure and show the weights that would be used for a weighted average cost of capital (WACC) computation. Round the values to the nearest dollar and the weights to three decimal places of percentage. Debt$ fill in the blank 1 Values Weights Debt $ _____ Preferred Stock ____ _____ Common Equity ____ _____ $ _____ _____Percent of capital structure: Preferred stock Common equity (retained earnings) Debt Additional information: Corporate tax rate Dividend, preferred Dividend, expected common Price, preferred Growth rate Bond yield Flotation cost, preferred Price, common 15% 45 40 35% Debt Preferred stock Common equity (retained earnings) Weighted average cost of capital $ 8.00 $ 3.50 $ 105.00 98 8% $ 10.40 $ 78.00 Calculate the weighted average cost of capital for Digital Processing Incorporated Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. Answer is complete but not entirely correct. Weighted Cost 5.20 % 8.33 11.50 25.03 %
- What is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Interest rate on government bonds SKYE's equity beta Historical excess return on stocks Tax rate Note: Enter your answer to 1 decimal place. X Answer is complete but not entirely correct. Weighted-average cost of capital 11.6 × % 1 million $ 23 7.68% $14 million 9% 7% 0.75 5.8% 40%The company capital structure consists of debt 250000 at 0.063, preferred stock 230000 at 11% and common stock 120000 at 14%, calculate company's weighted average cost of capital Select one: O a. 0.0683 O b. 0.0963 O.0.0262 O d. All the given choices are not correct O e. 0.0542Prabhat Tech Ltd has the following specific cost of capital along with the indicated book value and market value weights. Cost of Equity 15% Cost of Long-term debt after tax 8.2 % Preference Shares 12 % Determine the appropriate weighted average cost of capital using book value and market value weights.