The GiN Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for a foreseeable future. The stock of the GiN Corp. is currently selling at a market price of $40. The company recently expanded its operations by issuing 10-year Corporate bond at par value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratio of the company is 0.40 and the corporate tax rate is 30%, what is the weighted average cost of capital of the company? Calculate the weighted average cost of capital. The weighted average cost of capital is 9.50% The weighted average cost of capital is 5.60% The weighted average cost of capital is 8.39% The weighted average cost of capital is 8.00%
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- The GIN Corp. is expected to pay a dividend of S3 which is expected to grow at 2% for a foreseeable future. The stock of the GiN Corp. is currently selling at a market price of $40. The company recently expanded its operations by issuing 10-year Corporate bond at par value ($1,000) which pays an annual coupon payment of 580. If the debt-equity ratio of the company is 0.40 and the corporate tax rate is 30%. what is the weighted average cost of capital of the company? Calculate the weighted average cost of capital. (A) The weighted average cost of capital is 9.50% (B) The weighted average cost of capital is 8.39% (C) The weighted average cost of capital is S.00% (D) The weighted average cost of capital is 5.60%The GiN Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for a foreseeable futuré. The stock of the GiN Corp. is currently selling at a market price of $40. The company recently expanded its operations by issuing 10-year Corporate bond at par value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratio of the company is 0.40 and the corporate tax rate is 30%, what is the weighted average cost of capital of the company? Calculate the weighted average cost of capital. (A) The weighted average cost of capital is 9.50% (B) The weighted average cost of capital is 8.39% (C) The weighted average cost of capital is 8.00% (D) The weighted average cost of capital is 5.60% Answer Activate Windows Go to Settings to activate Windows C Type here to search ENG 00:18 4の IN 02-11-2020 A B 00The GiN Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for a foreseeable future. The stock of the GİN Corp. is currently selling at a market price of $40. The company recently expanded its operations by issuing 10-year Corporate bond at par value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratio of the company is 0.40 and the corporate tax rate is 30%, what is the weighted average cost of capital of the company? Calculate the weighted average cost of capital. (A) The weighted average cost of capital is 9.50% (B) The weighted average cost of capital is 8.39% (C) The weighted average cost of capital is 8.00% (D) The weighted average cost of capital is 5.60%
- The Gin Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for aforeseeable future. The stock of the GiN Corp. is currently selling at a market price of$40. The company recently expanded its operations by issuing 10-year Corporate bond atpar value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratioof the company is 0.40 and the corporate tax rate is 30%, what is the weighted averagecost of capital of the company?Calculate the weighted average cost of capital.(A) The weighted average cost of capital is 9.50%(B) The weighted average cost of capital is 8.39%(C) The weighted average cost of capital is 8.00%(D) The weighted average cost of capital is 5.60%A company currently has a bond outstanding that pays 6% coupon rate (coupons paid semiannually), a $1,000 par value and matures in 30 years. The bond is currently trading at $515.16. The company's tax rate is 25%. What is the firm's after-tax component cost of debt for purposes of calculating the weighted average cost of capital ("WACC")? Please show formulas, step by step instructions (without a financial calculator or Excel)The Gin Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for aforeseeable future. The stock of the GiN Corp. is currently selling at a market price of$40. The company recently expanded its operations by issuing 10-year Corporate bond atpar value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratioof the company is 0.40 and the corporate tax rate is 30%, what is the weighted averagecost of capital of the company?Calculate the weighted average cost of capital.
- Ma, Inc. has a market value capital structure of 30% debt and 70% equity. The tax rate is 30%. Thefirm’s bonds currently trade in the market for $1035.00. These bonds have a face value of $1,000,coupon rate of 8% paid semiannually, and 10 years remaining to maturity. The firm’s common stocktrades for $20 per share. The firm has just paid a dividend of $2. Future dividends are expected to growat 2% per year. Based on this information, Ma, Inc.’s WACC is _____%. Cream and Crimson has a capital structure of 60% debt and 40% equity. The tax rate is 34%. The firm’sbonds currently trade in the market for $784. These face value $1,000 bonds have a coupon rate of 8%,paid semiannually, with 7 years to maturity. The firm’s common stock trades for $15 per share and thecompany’s beta is 1.28. The risk-free rate (Rf) = 3.2% and the market risk premium (Rm – Rf) = 8.1%.Given this information, Cream and Crimson’s WACC is _____%.Twill Consulting has total assets of $1,810. These assets are expected to increase in value to either $1,900 or $2,400 by next year. The company has a pure discount bond outstanding with a face value of $2,000. This bond matures in one year. Currently, U.S. Treasury bills are yielding 5.5 percent. What is the value of the equity in this firm? Multiple Choice $7.24 $6.98 $7.89 $6.67 $7.08ABC company has a dividend payout ratio of 40% and has maintained this payout ratio for several years. The current dividend per share of the company is 60p per share, and it expects that its next dividend per share, payable in one year’s time, will be 65p per share.The capital structure of the company is as follows(image attached).Bond A will be redeemed at nominal value in ten years’ time and pays annual interest of 10%. The cost of debt of this bond is 11.5% per year. The current ex-interest market price of the bond is £96.02. Bond B will be redeemed at nominal value in four years’ time and pays annual interest of 7%. The cost of debt of this bond is 7.5% per year. The current ex-interest market price of the bond is £105.04. ABC has a cost of equity of 15%. Ignore taxation.Calculate the following: 1. Ex-dividend share price, using the dividend growth model. 2. Capital gearing (debt divided by debt plus equity) using market value. 3. Market value weighted average cost of capital.…
- ABC company has a dividend payout ratio of 40% and has maintained this payout ratio for several years. The current dividend per share of the company is 60p per share, and it expects that its next dividend per share, payable in one year’s time, will be 65p per share.The capital structure of the company is as follows(image attached).Bond A will be redeemed at nominal value in ten years’ time and pays annual interest of 10%. The cost of debt of this bond is 11.5% per year. The current ex-interest market price of the bond is £96.02. Bond B will be redeemed at nominal value in four years’ time and pays annual interest of 7%. The cost of debt of this bond is 7.5% per year. The current ex-interest market price of the bond is £105.04. ABC has a cost of equity of 15%. Ignore taxation.Calculate the following: 1. Ex-dividend share price, using the dividend growth model. 2. Capital gearing (debt divided by debt plus equity) using market value. 3. Market value weighted average cost of…Blooming Ltd. currently has the following capital structure: Debt: $2,500,000 par value of outstanding bond that pays annually 12% coupon rate with an annual before-taxyield to maturity of 10%. The bond issue has face value of S1,000 and will mature in 25 years. Ordinary shares: 65,000 outstanding ordinary shares. The firm plans to pay a S7.50 dividend per share in the next financial year. The firm is maintaining 3% annual growth rate in dividend, which is expected to continue indefinitely. Preferred shares: 40 000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 14%. Company tax rate is 30%. Required: Complete the following tasks: a) Calculate the current price of the corporste bond? b) Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%?, c) Calculate the current value of the preferred share if the average return of the shares in the same industry is 12% (. d) Calculate the current market…Blooming Ltd. currently has the following capital structure: Debt: S2,500,000 par value of outstanding bond that pays annually 12% coupon rate with an annual before-tax yield to maturity of 10%. The bond issue has face value of $1,000 and will mature in 25 years. Ordinary shares: 65,000 outstanding ordinary shares. The firm plans to pay a S7.50 dividend per share in the next financial year. The firm is maintaining 3% annual growth rate in dividend, which is expected to continue indefinitely. Preferred shares: 40 000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 14%. Company tax rate is 30%. Required: Complete the following tasks: a) Calculate the current price of the corporate bond? ) b) Calculate the current price of the ordinary share if the average return of the shares in the same industry is 99%6? (* the average return of the shares in the same industry is 12% - )d) Calculate the current market value (rounded off to the nearest whole number)…