Ghirardelli currently has no loans. The company's cost of capital is 12 percent annually. Ghirardelli expects a cash inflow of $111,000 in annual earnings before interest and axes, forever. The company faces a 22 % tax rate on all taxable income. Ghirardelli does decide to borrow money, it will do so by issuing corporate bonds. If his happens, the interest rate on the bonds will be 8%. . Ghirardelli's cost of equity will equal if it borrows $165,000 and uses it back its shares of stock. (Do not round intermediate calculations and enter yo answer as a percent rounded to 2 decimal places, e.g., 32.16.) W - Continue part (a). In addition, in this case Ghirardelli's weighted average cost of capital will equal (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Linkcomn expects an Eamnings after Taxes of 7500005 every year. The firm currently has 100% Equity and cost of raising equity is 12%. If the company can borrow debt with an interest of 10% What will be the value of the company if the company takes on a debt equal to 60% of its unlevered value? What will be the value of the company if the company takes on a debt equal to 50% of its levered value? Assume the company's tax rate is 30% (Must show the steps of calculation)

Johnson Tire Distributors has debt with both a face and a market value of $90,000,000. This debt has a coupon rate of 7 percent and pays interest annually. The expected earnings before interest and taxes is a constant $50,000,000 in perpetuity. The company's tax rate is 25 percent, and the unlevered cost of capital is 25 percent. What is the firm's cost of equity? Write your answer as a percent rounded to two digits, but don't include the % sign (i.e. enter 12.63, not 0.1263). HINT: You need to use both M&M propositions. Numeric Response

Yosemite Corporation has an outstanding debt of $10.12 million on which it pays a 5 percent fixed interest rate annually. Yosemite Just made its annual interest payment and has three years remaining until maturity. Yosemite believes that interest rates will fall over the next three years and that floating-rate debt will allow it to reduce its overall borrowing costs. A bank offers Yosemite a three-year interest rate swap with annual payments in which Yosemite will pay LIBOR, currently at 5.1 percent, and receive a 4.6 percent fixed rate on $10.12 million notional principal. Suppose that LIBOR turns out to be 4.5 percent in one year and 4.2 percent in two years. Including interest payments on Yosemite's outstanding debt and payments on the swap, what will be Yosemite's net interest payments for the next three years? Note: Negative values should be indicated by parentheses. Year 11 Year 2 Year 3 Net Interest Payments 12

Hi there, I'm trying to solve this corporate finance problem without using excel. John has a 5 year mortgage contract on $332,100 amortized over 25 years at a rate of 5% per year compounded semiannually. At the end of the 5 year contract, the outstanding principal is $250,000. John's interest rate is still the same but he wishes to switch to weekly payments. How much will John's weekly payments be?

Bhupatbhai

Braxton Enterprises currently has debt outstanding of $45 million and an interest rate of 10%. Braxton plans to reduce its debt by repaying $9 million in principal at the end of each year for the next five years.If​ Braxton's marginal corporate tax rate is 21%​, what is the interest tax shield from​ Braxton's debt in each of the next five​ years? (Round to three decimal​ places.)

Sandyhorse Corp. has $370 million of debt outstanding at an interest rate of 14 percent. What is the present value of the interest tax shield if the debt has no maturity and if Sandyhorse is subject to a 30 percent marginal tax rate? $_________

AT&T is a profitable company.  On its $200 Billion of debt, it pays an interest rate of 5%.  Assuming its tax rate is 20%, what is its effective cost of debt?   a) 15% b) 6% c) 5% d) 4%

Hunter Corporation expects an EBIT of $30,000 every year forever. The company currently has no debt and its cost of equity is 14 percent. The tax rate is 20 percent. The company is able to borrow at 8 percent. What will the value of the company be if it takes on debt equal to 60 percent of its levered value? [Note: the proceeds from issuing new debt are used to repurchase Hunter's equity.] O $251,488.1 $194,805.2 O $274,285.8 O $171,428.6