d MC algo 13-12 Capital Structure Weight Further From Center has 10,200 shares of common stock outstanding at a price of $36 per share. It also has 215 shares of preferred stock outstanding at a price of $87 per share. There are 520 bonds outstanding that have a coupon rate of 5.5 percent paid semiannually. The bonds mature in 17 years, have a face value of $1,000, and sell at 93 percent of par. What is the capital structure weight of the preferred stock? Multiple Choice О О .0668 .4223 .0982 .0215 .5562 < Prev 11 of 11 Next >
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- Plz complete using excel showing formula of work !! ABC Corp has 20,000 shares of bonds outstanding with a coupon rate of 6%, face value of $1,000, and 30 years to maturity. The bonds are selling for 110 percent of par and make semiannual payments. The company also has 600,000 shares outstanding of common stock selling for $67 per share. The beta of the stock is 1.29 and the tax rate is 21%. a. If the Treasury bill rate is 3% and the market risk premium is estimated at 7%., what is ABC’s cost of equity capital? b. What is the WACC? c. ABC Corp plans to expand the current operations. If the project will pay a cash flow of 10,000 next year and then cash flows growing at a rate of 4% over the next 3 years (for a total of 4 of cash flows), what is the most ABC is willing to spend on the initial investment for this project?11-19 WACC TAFKAP Industries has 3 million shares of stock outstanding selling at $17 per share, and an issue of $20 million in 7.5 percent annual coupon bonds with a maturity of 15 years, selling at 106 percent of par. If TAFKAP's weighted-average tax rate is 34 percent and its cost of equity is 14.5 percent, what is TAFKAP's WACC? (LG11-3)What is the capital structure of this company based on market values? Bond issue #1, maturity 12 years, coupon rate 9%, current YTM 9.75%, book value $10 million Bond issue #2, maturity 16 years, coupon rate 9%, current YTM 7.75%, book value $15 million Preferred stock, 500,000 shares, par $10 per share Common stock, par $1 per share, book value $10 million Market price of preferred stock is $17.50, market price of common stock is $15 What is the WACC if: Tax rate = 40% Preferred stock dividend = $1.50 per share Common stock dividend = $.375 per share Beta is 1.15 RFR = 5.21% Expected return of the market = 14%
- Debt of tion Common Stock Preferred Stock 59,000 bonds with a 5.0% coupon rate, payable annually, 15 years to maturity, selling at $1,050 per bond. 554,000 shares of common stock outstanding. The stock sells for a price of $76 per share and has a beta of 1.20. 215,000 preferred shares outstanding, currently trading at $70.00 per share; with an annual dividend payment of $5.20, Market The market risk premium is 13% and the risk free rate is 4% Tax Rate 26% Time lef What is the after tax cost of debt (Rd)? (Answer as a percentage and round to 2 decimals) Oa. 0.76 % Ob. -0.01 % O c. 7.10% O d. 5.20% O e. 3.35 %Format A & B Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $60, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $85 million, a xxx coupon, and sells for 97 percent of par. The second issue has a face value of $50 million, an 8 percent coupon, and sells for 108 percent of par. The first issue matures in 21 years, the second in 6 years. Suppose the most recent dividend was $3.90 and the dividend growth rate is 6 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 35 percent, What is the company's WACC?Q7-1: Finding the WACC Blue Corp has 5 million shares of common stock outstanding, 750,000 shares of 7% preferred stock outstanding, and 250,000 11% semi-annual bonds outstanding, par value $1,000 each. The stock sells for $40 per share and has a beta of 1.3, the preferred stock currently sells for $75 per share, and the bonds have 15 years to maturity and sell for 93.5% of par. The market risk premium is 6%, T-bills are yielding 4%, and Blue's tax rate is 35%. • What is the firm's market value capital structure? • If Blue is evaluating a new investment project that has the same risk as to the firm's typical project, what rate should it use to discount the project's cash flow?
- Q7-1: Finding the WACC Blue Corp has 5 million shares of common stock outstanding, 750,000 shares of 7% preferred stock outstanding, and 250,000 11% semi-annual bonds outstanding, par value $1,000 each. The stock sells for $40 per share and has a beta of 1.3, the preferred stock currently sells for $75 per share, and the bonds have 15 years to maturity and sell for 93.5% of par. The market risk premium is 6%, T-bills are yielding 4%, and Blue's tax rate is 35%. What is the firm's market value capital structure? If Blue is evaluating a new investment project that has the same risk as to the firm's typical project, what rate should it use to discount the project's cash flow? What is the firm's market value capital structure? Market Value Equity Market Value Preferred Stock par= price per share times number of shares outstanding Market Value of Bonds n price per share times number of shares outstanding tax rate Find the price per bond current price $ 1,000 bonds sell for 0 pmt of par Ann…Question 4 The following information is available for the capital structure of TestraQ Group: Debt: $3,500,000 par value of outstanding corporate bonds that pay a semi-annual 11.5% coupon rate with an annual before-tax yield to maturity of 10%. The bond issue has a face value of $1,000 and will mature in 30 years. Ordinary shares: 75,000 outstanding ordinary shares which just paid a $4.50 dividend per share in the current financial year. The firm is maintaining 9% annual growth rate in dividends, which is expected to continue indefinitely. Prefered share: 42 000 preference shares with a 13% fixed dividend rate, face value of $100, market price of $123. Required: Complete the following tasks: Calculate the current price of the corporate bond for the TestraQ Group? Calculate the current market value of the ordinary share of the TestraQ Group if the average return…12. Finding the WACC Titan Mining Corporation has 6.4 million shares of common stock outstanding and 175,000 6.2 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $53 per share and has a beta of 1.15; the bonds have 25 years to maturity and sell for 106 percent of par. The market risk premium is 6.8 percent, T-bills are yielding 3.1 percent, and the company's tax rate is 22 percent. a. What is the firm's market value capital structure? b. If the company is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows?
- Question 8 One company has the following debt and equity: Common stock: 500,000 shares outstanding, selling for $30 per share; beta is 2.5. Debt: 10,000 bonds, selling for 105 percent of par. The bonds have a $1,000 par value each and the YTM is 8%. Preferred stock: 15,000 shares outstanding, selling for $250 per share. Annual dividend is $30 per share. The market risk premium is 4%, and the risk-free rate is 1.5%. tax rate is 21%. a) What are cost of equity, cost of debt, and cost of preferred stock? b) What is the capital structure weights of the company? (hint: the weight of each financing) c) What is the cost of capital of the company?The Tyler Oil Company's capital structure is as follows: Debt Preferred stock Common equity 15% 20 65 The aftertax cost of debt is 5 percent; the cost of preferred stock is 8 percent; and the cost of common equity (in the form of retained earnings) is 11 percent. Calculate Tyler Oil Company's weighted average cost of capital in a manner similar to Table 11-1. (Round the final answers to 2 decimal places.) Debt (Kd) Preferred stock (Kp) Common equity (Ke) (retained earnings) Weighted average cost of capital (Ka) Weighted Cost % 9.50 %Details of the capital structure of Webber Ltd. appear below: Bonds Number issued 27,000 Coupon rate 6% Interest payments Years to maturity Current price Preferred shares Number issued Dividend per share Current price Common shares Number issued Next dividend per share Dividend growth rate 6.5% Current price Flotation costs Bonds semi-annually 10. $90 1.5 million. $2 $25 3.5 million $3 $30 5% Preference shares Common shares 7% Required: The company's tax rate is 30%. Calculate the company's weighted average cost of capital 6%
