elta Lighting has 24,500 shares of 5 common stock outstanding at a market price of $ 19 a share . This stock was originally issued at $ 21 per share . The firm also has a bond issue outstanding with a total face value of $ 150,000 which is selling for 94 percent of par . The cost of equity is 12.6 percent while the aftertax cost of debt is 5.8 percent . The firm has a beta of 1.33 and a tax rate of 23 percent . What is the weighted average cost of ?capital

elta Lighting has 24,500 shares of 5 common stock outstanding at a market price of $ 19 a share . This stock was originally issued at $ 21 per share . The firm also has a bond issue outstanding with a total face value of $ 150,000 which is selling for 94 percent of par . The cost of equity is 12.6 percent while the aftertax cost of debt is 5.8 percent . The firm has a beta of 1.33 and a tax rate of 23 percent . What is the weighted average cost of ?capital

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter14: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 12P: Bayani Bakerys most recent FCF was 48 million; the FCF is expected to grow at a constant rate of 6%....

See similar textbooks

Similar questions

Bayani Bakerys most recent FCF was 48 million; the FCF is expected to grow at a constant rate of 6%. The firms WACC is 12%, and it has 15 million shares of common stock outstanding. The firm has 30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has 368 million in debt and 60 million in preferred stock. a. What is the value of operations? b. Immediately prior to the repurchase, what is the intrinsic value of equity? c. Immediately prior to the repurchase, what is the intrinsic stock price? d. How many shares will be repurchased? How many shares will remain after the repurchase? e. Immediately after the repurchase, what is the intrinsic value of equity? The intrinsic stock price?
At a market price of $26 per share, The Seattle, Inc. has 20,000 shares of common stock outstanding. This stock was first offered at a price of $19 per share. In addition, the company has a bond issue with a total face value of $300,000 that is selling for 97 percent of its face value. The cost of equity is 10%, while the cost of debt after taxes is 5%. The company has a beta of 1.2 and a 35 percent tax rate. What is the weighted average cost of capital in The Seattle, Inc.
wilson's has 10,000 shares of common stock outstanding at a market price of $35 a share. the firm also has a bond issue outstanding with a total face value of 250,000 which is selling for 102% of face value. the cost of equity is 11% while the pre-tax cost of debt is 8%. the firm has a beta of 1.1 and a tax rate of 34%. what is wilson's weighted average cost of capital?
Alto and Tenor have 15,000 shares of stock outstanding at a market price of $21 per share. The firm also has $140,000 of 6 percent bonds outstanding that are selling at par. The firm does not expect to pay taxes for the foreseeable future. The cost of equity is 14.7 percent. What is the value of RWACC?
Western Electric has 63,000 shares of common stock outstanding at a price per share of $70 and a rate of return of 10.2 percent. The firm has 7,100 shares of 7 percent preferred stock outstanding at a price of $80 a share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $750,000 and currently sells for 96 percent of face. The yield to maturity on the debt is 11.75 percent. What is the firm's weighted average cost of capital if the tax rate is 34 percent? WACC = %
Phillips Equipment has 80,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 6.75 percent. The company also has 750,000 shares of 7 percent preferred stock and 2.5 million shares of common stock outstanding. The preferred stock sells for $53 a share. The common stock has a beta of 1.34 and sells for $42 a share. The U.S. Treasury bill is yielding 2.8 percent and the return on the market is 11.2 percent. The corporate tax rate is 38 percent. What is the firm's weighted average cost of capital
Hotel Cortez is an all-equity firm that has 11,200 shares of stock outstanding at a market price of $35 per share. The firm's management has decided to issue $68,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 9 percent. What is the break-even EBIT?
Western Electric has 31,000 shares of common stock outstanding at a price per share of $77 and a rate of return of 13.10 percent. The firm has 7,200 shares of 7.60 percent preferred stock outstanding at a price of $94.00 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $398,000 and currently sells for 110 percent of face. The yield to maturity on the debt is 8.02 percent. What is the firm's weighted average cost of capital if the tax rate is 39 percent? A) 10.52% B) 10.72% C) 11.10% D) 11.50% E) 10.29%
McGraw Hill publishers have 200,000 shares of common stock outstanding with a par value of £1.00 per share. The current share price is £4 per share. The firm has outstanding debt with a par value of £0.6 million, which is selling at 75% of par. The risk-free rate of interest is 5% and the required return on the firm’s debt is 10%. The risk premium on the market is 8% and the firm has an equity beta of 1.5. The corporation tax rate is 20%. Assume that debt payments are tax deductible. What is McGraw Hill’s (i) cost of equity capital and (ii) WACC? a.None of the above b. (i) 13.6% and (ii) 13.76% c. (i) 17% and (ii) 11.58% d. (i) 13.6% and (ii) 11.58% e. (i) 17% and (ii) 13.76%
Today's Technology has 24,500 shares of common stock outstanding at a price per share of $64 and a rate of return of 13.75 percent. The firm has 6,550 shares of 6.30 percent preferred stock outstanding at a price of $87.50 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $359,000 and currently sells for 103.5 percent of face. The yield to maturity on the debt is 7.63 percent. What is the firm's weighted average cost of capital if the tax rate is 35 percent?
McGraw Hill publishers has 200,000 shares of common stock outstanding with a par value of £1.00 per share. The current share price is £4 per share. The firm has outstanding debt with a par value of £0.6 million, which is selling at 75% of par. The risk-free rate of interest is 5% and the required return on the firm’s debt is 10%. The risk premium on the market is 8% and the firm has an equity beta of 1.5. The corporation tax rate is 20%. Assume that debt payments are tax deductible. What is McGraw Hill’s (i) cost of equity capital and (ii) WACC? a None of the above b (i) 13.6% and (ii) 13.76% c (i) 17% and (ii) 11.58% d (i) 13.6% and (ii) 11.58% e (i) 17% and (ii) 13.76%
Charlotte's Crochet Shoppe has 17,300 shares of common stock outstanding at a price per share of $85 and a rate of return of 12.01 percent. The company also has 380 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.33 percent and the bonds sell for 100.2 percent of par. What is the firm's WACC if the tax rate is 40 percent?