d.  Calculate the​ firm's weighted average cost of capital using the capital structure weights shown in the following​ table . ​ (Round answer to the

Use the following information to answer the following question(s). a) What is the percentage of common stock in Sumitomo's weighted average cost of capital? b) What is the percentage of debt in Sumitomo's weighted average cost of capital? c) What is the percentage of preferred stock in Sumitomo's weighted average cost of capital? d) What is the total capital that should be used in computing the weights for Sumitomo's WACC?

3. Explain the relationship between the weighted average cost of capital (WACC), the maximization of firm value, and financial decision making.

The financial manager of a firm determines the following schedules of cost of debt and cost of equity for various combinations of debt financing:   Debt/Assets After-Tax Cost of Debt Cost of Equity 0 % 4 % 8 % 10   4   8   20   4   8   30   5   9   40   6   10   50   8   12   60   10   14   70   12   16     Find the optimal capital structure (that is, optimal combination of debt and equity financing). Round your answers for the capital structure to the nearest whole number and for the cost of capital to one decimal place. The optimal capital structure:   % debt and   % equity with a cost of capital of   % Why does the cost of capital initially decline as the firm substitutes debt for equity financing? The cost of capital initially declines because the firm cost of debt is  than the cost of equity. Why will the cost of funds eventually rise as the firm becomes more financially leveraged? As the firm becomes more financially leveraged and riskier, the cost of…

You have the following information about Burgundy Basins, a sink manufacturer. Equity shares outstanding Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Market value of debt Book value of equity Cost of equity capital Tax rate a. What is the internal rate of return on the investment? Note: Round your answer to 2 decimal places. Internal rate of return I Weighted-average cost Burgundy is contemplating what for the company is an average-risk investment costing $38 million and promising an annual ATCF of $4.9 million in perpetuity. % b. What is Burgundy's weighted-average cost of capital? Note: Round your answer to 2 decimal places. 20 million % $39 7.5% $350 million 4.4% $ 245 million $ 410 million 11.8% 35%

BIE The Cost of Capital: Weighted Averige cost of capital The firm's target capital structure is the mix of debt, presured stack, and common equity the firm plans to mise funds for future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these I components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common study then the cost of retained earnings is used in the firm's WACC calculation. However, if the firm will I have to issue new common stock, the cost of new common stock should be used in the firm's WALC calculation. Barton Industines expects that its target capital Structure for finds in the future for its raising capital budget will consist of 40% debt, 5% prefence stock, and 55% common equity. Note that the firm's marginal tax rate is 25%. Assume that the firm's cost of debt, rd is 10.0%, the firm's cost of preferred stock, rp is 9.2.%. and the firm's cost of…