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 CAPM- 5.50% Total Market Vlaue of Bonds - $767,441 Cost of Debt- 364.049% Tax Rate- 35% Question: Cost of Equity = ? Market Value of Equity = ? Aftertax Cost of Debt = ? Market Value of Debt = ?
Q: 1) Cost of common stock equity: CAPM Brigham Jewellery Corporation common stock has a beta, β, of…
A: Hi! Thank you for the question, As per the Honor Code, we are allowed to answer one question in case…
Q: Examine the following book-value balance sheet for University Products Inc. The preferred stock…
A: Given information: Preferred stock selling for $15 per share Dividend is $3 per share Common stock…
Q: Evans Technology has the following capital structure. Debt Common equity 25% 75 The aftertax cost of…
A: The present value is the value of the sum received at time 0 or the current period. It is the value…
Q: Beta of common stock = 1.2 Treasury bill rate = 4% Market risk premium = 6.5% Yield to maturity on…
A: As per CAPM, cost of equity =Risk free rate + beta * market risk premium = 4% + 1.20 * 6.5% = 4% +…
Q: 0-3 COST OF COMMON EQUITY Percy Motors has a target capital structure of 40% debt and 60% common…
A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…
Q: Discounted Cash Flow Valuation. Presented below are data for Alto Audio: Forecast Year Terminal No.…
A: Value of share : To calculate the value of share, first we have to calculate the firm value and then…
Q: Examine the following book-value balance sheet for University Products Inc. The preferred stock…
A: The market value of the firm represents the market value of each source of capital invested in the…
Q: Examine the following book-value balance sheet for University Products Inc. The preferred stock…
A: a) Computation:
Q: The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The…
A: Computation of BCCI’s Cost of equity capital is shown: Formulation is shown:
Q: uch of the $17,000 dividend will be paid to preferred stockholders and how much will be paid to…
A: Preference shares Face value =$100 Number of shares =1200 Dividend =6% Dividend paid =17000 Common…
Q: analyst has obtained the following information Book value of long-term sources of capital: $25,000…
A: Relevant information: To compute the WACC, the market value of the components will be used. Book…
Q: Calculate the cost of equity from retained earnings (rs )AND the cost of newly issued common stock…
A: The Dividend Growth Model refers to a model that helps in calculating the intrinsic value of a stock…
Q: The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The…
A: a) Hence, the cost of equity capital is 9.40%. Working note:
Q: BMM Industries pays a dividend of $1.40 per quarter. The dividend yield on its stock is reported at…
A: Given: Dividend =$1.40 per quarter So, annual dividend = $5.60 Dividend yield = 4.2%
Q: Assume JUP has debt with a book value of $20 million, trading at 120% of par value. The firm has…
A: Weighted Average Cost of Capital ("WACC") is the overall cost of capital for the company for all the…
Q: Salalah
A:
Q: What is the company's actual rate of return based off information below: WACC = ((E/V) * Re) +…
A: The question is based on the concept of weighted average cost of capital (WACC), which represents…
Q: Compute for the: 1.Equity value 2. Firm value
A: Dividend discount model refers to a stock valuation model which is used by the company for…
Q: You are given the following Information for Golden Fleece Financial: $418, e00 Long-term debt…
A: Long term debt outstanding =$410000Value of share =No. of share ×Price per share…
Q: 92,500 Premium on common stocks 16,300 esh ommon stocks, $10 par eferred taxes payable iscount on…
A: The balance sheet represents the financial position of the business.
Q: Book Co. has 1.2 million shares of common equity with a par (book) value of $1.50, retained earnings…
A: Given:Book value has 1.2 million shares of common equity, book value= $1.50Retained earnings=$28.8…
Q: Book Co. has 1.5 million shares of common equity with a par (book) value of $1.30, retained earnings…
A: Debt and equity are the two main sources to raise the funds. Value of these securities fluctuates on…
Q: Here is some information about Stokenchurch Inc.: Beta of common stock = 1.5 Treasury bill rate…
A: The weighted average cost of capital (WACC) refers to the average cost that is paid by a company to…
Q: b. A certain company gave out P25 dividend per share for its common stock. The market value of the…
A: Bonds are a type of long-term instruments used by governments and corporations to raise loan.
Q: Calculate Cost of Common Equity using CAPM (Capital Asset Pricing Model), DCF (Discounted Cash Flow…
A: As per CAPM, Cost of Common Equity = Risk free rate + Beta * (Market Risk premium) Where, risk free…
Q: mmon stocK has (-free rate is 4 percent an market risk prem 7 регcent. EQUIRED Calculate the…
A: Price of common equity can be present value of dividends and present value of terminal value of…
Q: National Co.’s stock sells for P35 that recently paid a P5 dividend. The growth rate will remain the…
A: As per formula Cost of newly issued equity = [D0*(1+g)/(P0-F)]+g Where D0 - Recent dividend i.e. P5…
Q: ential shares, 14%, P100 par vale ary shares, P25 par value, 33,600 shares um on ordinary shares med…
A: The answer is stated below: Note: Answering the first three subparts as there are…
Q: Assume that a company's beginning-b per share, and its end-of-period price is $10.50 per common…
A: (Note: We’ll answer the M12-20 question since it was specified. Please submit a new question…
Q: 19) You are given the following information regarding UFSK limited, a listed entity. I Number of…
A: 91 Day Treasury bill rate ( Risk Free Rate) = 6% Market Risk Premium = 8% Beta = 1.2 Required Return…
Q: The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The…
A: The provided information are: Beta = 0.9 Risk free rate = 4% Market risk premium = 10%
Q: 9. Corporation Gen. Math, with a current market value of P 95.00, give a dividend of P 15.00 per…
A: Current market value of share = P 95 Annual dividend amount = P 15
Q: The Royal Gold’s stock currently sells for RM 90 per share. The firm issued rights to raise new…
A: In this question we need to compute the ex-rights stock price from below details: Current market…
Q: Assume JUP has debt with a book value of $24 million, trading at 120% of par value. The firm has…
A: Debt: Book value = 24 Million Par value = Book value * 120% = 24*120%= 28.80 Equity : Book value=28…
Q: a. What is the market value of its equity? b. What is the market value of its debt? c. What…
A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…
Q: CDB stock is currently priced at $57.24. The company will pay a dividend of $6.01 next year and…
A: Answer - Calculation of Growth rate - Given, Share price= $57.24 Next year dividend = $6.01…
Q: (Preferred stock valuation) Calculate the value of a preferred stock that pays a dividend of…
A: Annual dividend per share (D) = $8.00 Required return (r) = 0.15 Value of a preferred stock (P0) = ?…
Q: 7. ABC Corp has 1.4 million shares common valued at $20 per share =$28 million. Debt has face value…
A: The question is based on the concept for calculating return on equity (ROE) and Weighted Average…
Q: The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The…
A: The provided information are: Beta = 0.9 Risk free rate = 4% Market risk premium = 10%
Q: Assume JUP has debt with a book value of $22 million, trading at 120% of par value. The firm has…
A: Since WACC will be driven by the investor's expectation so the market value debt can be used.
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:
Market Value of Equity = ?
Aftertax Cost of Debt = ?
Market Value of Debt = ?
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
- 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.)Calculate Cost of Common Equity using CAPM (Capital Asset Pricing Model), DCF (Discounted Cash Flow Model) and Bond Yield Risk Premium CAPM data: VEC’s beta = 1.2 The yield on T-bonds = 3% Market risk premium = 7% DCF data: Stock price = $27.08 Last year’s dividend (D0) = $2.10 Expected dividend growth rate = 4% Bond-yield-plus-risk-premium data: Risk premium = 5.5% Amount of retained earnings available = $80,000 Floatation cost for newly issued shares = 7%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)?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 6%. BCCI’s capital structure is 36% debt, paying an interest rate of 5%, and 64% 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 12%, should it accept the project if it has the same level of risk as the current firm?
- 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.)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.1) Cost of common stock equity: CAPM Brigham Jewellery Corporation common stock has a beta, β, of 1.8. The risk-free rate is 5%, and the market return is 16%. Determine Brigham’s cost of common stock equity using the CAPM. 2) The cost of debt is 4.2%, the cost of preferred stock is 9.5%, the cost of retained earnings is 13.0%, and the cost of new common stock is 15.0%. All are after-tax rates. The company’s debt represents 25%, the preferred stock represents 10%, and the common stock equity represents 65% of total capital on the basis of the current market values of the three components. The company expects to have a significant amount of retained earnings available and does not expect to sell any new common stock. (See the attached photo) a.Calculate the WACC on the basis of historical market value weights. b.Calculate the WACC on the basis of target market value weights. c.Compare the answers obtained in parts a and b. Explain the differences.
- TOPIC 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.Assume JUP has debt with a book value of $24 million, trading at 120% of par value. The firm has book equity of $28 million, and 2 million shares trading at $20 per share. What weights should JUP use in calculating its WACC? A) 41.86% for debt, 58.14% for equity B) 37.67% for debt, 62.33% for equity C) 33.49% for debt, 66.51% for equity D) 29.30% for debt, 70.70% for equity