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Stock Price- $188.50
Dividend- (0.47)
Beta- 1.21
Shares Oustanding- 1.82B
Risk-Free Rate- 1.50%
Market Risk Premium- 7.00%
Market Value of Equity- $343.07B
Total Market Vlaue of Bonds - $767,441
Cost of Debt- 364.049%
Tax Rate- 35%
Question:
After Tax Cost of Debt= ?
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- The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The Treasury bill rate is 4%, and the market risk premium is estimated at 10%. BCCI’s capital structure is 25% debt, paying an interest rate of 8%, and 75% equity. The debt sells at par. Buildwell pays tax at 21%. What is BCCI’s cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The Treasury bill rate is 4%, and the market risk premium is estimated at 10%. BCCI’s capital structure is 25% debt, paying an interest rate of 8%, and 75% equity. The debt sells at par. Buildwell pays tax at 21%. What is BCCI’s cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Note; Dont use excel. Show manual calculations.The common stock of Buildwell Conservation & Construction Incorporated (BCCI) has a beta of 0.9. The Treasury bill rate is 4%, and the market risk premium is estimated at 8%. BCCI’s capital structure is 30% debt, paying an interest rate of 5%, and 70% equity. The debt sells at par. Buildwell pays tax at 21%. What is BCCI’s cost of equity capital? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place. What is its WACC? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. If BCCI is presented with a normal project with an internal rate of return of 12%, should it accept the project if it has the same level of risk as the current firm?
- Inputs for WACC (Re computed using CAPM only) LT Debt: 8000 bonds outstanding of a 5-year maturity; 1020 = PV; 5.8% = Coupon Rate(Semiannual) Common Stock: 42,000 shares outstanding; $22 price today Preferred Stock: 9000 shares, 4.5% dividend yield, $108 share price Other CAPM Information: ERm = 8% Rf = 2.00% Beta = 1.12 Tax Rate = 21% What is the WACC (please show inputs in Excel)?Consider the following information for Federated Junkyards of America. Debt: $76,000,000 book value outstanding. The debt is trading at 91% of book value. The yield to maturity is 10%. Equity: 2,600,000 shares selling at $43 per share. Assume the expected rate of return on Federated’s stock is 19%. Taxes: Federated’s marginal tax rate is Tc = 0.21. Calculate the weighted-average cost of capital (WACC). (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The Treasury bill rate is 4%, and the market risk premium is estimated at 10%. BCCI’s capital structure is 25% debt, paying an interest rate of 8%, and 75% equity. The debt sells at par. Buildwell pays tax at 21%. a. What is BCCI’s cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is its WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. If BCCI is presented with a normal project with an internal rate of return of 10%, should it accept the project if it has the same level of risk as the current firm?
- Using Excel. Given the following information for ONAIR Co., find the WACC. Assume the company’s tax rate is 35 percent. Show all work. Debt - 10,000, 5% semi-annual payment coupon bonds outstanding. $1,000 par value, 30 years to maturity. Selling for 98% of par value. Common Stock - 500,000 shares outstanding, selling for $70 per share, the beta is 1.2 Market - 8% market risk premium and 4% risk-free rate . USING EXCEL.Calculate the WACC for the following. Assume the tax rate to be 21%. Debt: 16,000 6.2% coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 108% of par; the bonds make semiannual payments Common stock: 535,000 shares outstanding, selling for $81 per share; beta is 1.2. Preferred stock: 20,000 shares of 4.2% preferred stock outstanding, currently selling for $92 per share. Par value is $100. Market: 7% market risk premium and 3.1% risk free rateTOPIC WEIGHTED AVERAGE What is the company’s WACC if the tax rate is 30%? Debt = 10,000, 6% semiannual coupon bonds outstanding with a par value of 1,000 and 25 years to maturity. The bonds sell for 105% of par. Common stock = 400,000 shares outstanding, selling for RM60 per share and the beta is 1.10. The market risk premium is 7% and the risk-free rate is 5%. Preferred stock = 18,000 shares of 3% outstanding. Current selling for 80% share. The par value is 100 per share.
- Given the following information for Magrath Power Co., find the WACC. Assume the company’s tax rate is 35%. Debt: 10,000 6.4% coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 108% of par; the bonds make semiannual payments. Common stock: 495,000 shares outstanding, selling for $63 per share; the beta is 1.15. Preferred stock: 35,000 shares of 3.5% preferred stock outstanding, currently selling for $72 per share. Market: 7% market risk premium and 3.2% risk-free rate.The total book value of WTC's equity is $13 million, and book value per share is $20. The stock has a market-to-book ratio of 1.5, and the cost of equity is 9%. The firms bonds have a face value of $9 million and sell at a price of 110% of face value. The yield to maturity on the bonds is 7% andthe firm's tax rate is 21%. What is the company's WACC? (Don't round intermediate calculations, enter final answers as a percent rounded to 2 decimal places.)XYZ Company has an existing capital structure mix of Debt 35%, preferred stock 15% and Common Stock 50%. a) Calculate Cost of Debt, if the cost of debt is 6% (effective rate) and its tax rate is 40% then what is the after-tax cost of debt? b) Calculate the Cost of preferred stock, if the market price for preferred stock is $100 per share, with a stated dividend of $10. c) Calculate Cost of Equity if Beta is 1.5 and the risk-free rate on a treasury bill is currently 5% and the market return has averaged 10%. d) Calculate Weighted Average Cost of capital for XYZ Company