Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%. Calculate the capital structure of the firm.
Q: Lingenburger Cheese Corporation has 6.4 million shares of common stock outstanding, 200,000 shares…
A: Cost of capital: It is the percentage of return that the company is expected to earn from its…
Q: Nevada Mining Co. has only long term debt of $600. This debt consist of long term bond which has…
A: WACC is average cost of all sources of finance based on their weights. It is computed by taking sum…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: a) The computations as follows: Debt: Preferred stock: Common stock:
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: a) Market Value is calculated as the number of units outstanding multiplied by the price. Total…
Q: A firm has 1 million shares outstanding with a book value per share of $10 per share. The stock…
A: The weighted average cost of capital (WACC) is a calculation of a firm's cost of capital
Q: The BEAR Company has 1700 bonds outstanding that have a market price of $1195 each and a face value…
A: "Hi, Thankyou for the question. Since, you posted multiple sub-part question, we will answer first…
Q: The Wildhorse Products Co. currently has debt with a market value of $200 million outstanding. The…
A: A combination of the long-term debts and different types of stocks to raise funds for the business…
Q: Today's Technology has 24,500 shares of common stock outstanding at a price per share of $64 and a…
A: Excel Spreadsheet:
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: a. Market value = Debt + Equity + Preferred stock Market value = ($450,000*102%) + (35,000*$47) +…
Q: The Smith Company has 10,000 bonds outstanding. The bonds are selling at 102% of face value, have a…
A: WACC takes all source of capital into account and assigns weights for computation. WACC increase…
Q: Pandora Manufacturing has 8.4 million shares of common stock outstanding. The current share price is…
A: A firm finances its business operations using various sources of capital such as equity and debt.…
Q: Lingenburger Cheese Corporation has 6.4 million shares of common stock outstanding, 200,000 shares…
A: Cost of capital is also called as weighted average cost of capital. or WACC
Q: Dinklage Corp. has 10 million shares of common stock outstanding. The current share price is $82,…
A: Book value Weight Common issue 50 0.263157895 First issue 85 0.447368421 Second issue 55…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: a) Computation of total market value of the company: Hence, the total value of the company is…
Q: Dinklage Corp. has 121 million shares of common stock outstanding. The current share price is $49,…
A: Weight of common stock : it means the ratio of equity and total capital used by the firm whether on…
Q: Lingenburger Cheese Corporation has 6.6 million shares of common stock outstanding, 235,000 shares…
A: No.of shares of common stock = 6.6 million No.of preferred shares = 235,000 Preferred rate = 3.9%…
Q: Given the following information for Watson Power Co., find the WACC. Assume the company’s tax rate…
A: Using CAPM
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: The weighted average cost of capital is the rate that a company is expected to pay on average on all…
Q: Hero Manufacturing has 8.5 million shares of common stock outstanding. The current share price is…
A: As a first step we need to calculate the weigthed average pre tax cost of debt based on the…
Q: A corporation has 7 million shares of common stock outstanding. The current share price is $68, and…
A: WACC is cost incurred by entity to finance their capital structure from given financial sources that…
Q: Dani Corporation has 9 million shares of common stock outstanding. The current share price is $75,…
A:
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: Answer 1 Number of shares outstanding = 35,000 Market Price per share = 47 Market Value of Equity =…
Q: Y ou are given the following information for Watson Power Co. Assume the company’s tax rate is 21…
A: Cost of debt or yield to maturity is calculated as below:
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: A combination of the long-term debts and different types of stocks to raise funds for the business…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: Capital structure is the ratio of each capital component in the total capital of a company. It is…
Q: Pandora Manufacturing has 6 million shares of common stock outstanding. The current share price is…
A: market value =equity +Debt There are two methods book value and market based.
Q: Filer Manufacturing has 4 million shares of common stock outstanding. The current share price is…
A: (Assumption: since question is silent, we assume that both the bonds pay coupons annually) Cost of…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: A combination of the long-term debts and different types of stocks to raise funds for the business…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: A combination of the long-term debts and different types of stocks to raise funds for the business…
Q: The Smith Company has 10,000 bonds outstanding. The bonds are selling at 102% of face value, have a…
A: Given information: Market price of common stock is $64 Dividend paid amount is $1.10 Dividend…
Q: Phillips Equipment has 6,500 bonds outstanding that are selling at 96.5 percent of par. Bonds with…
A: Weighted average cost of capital (WACC) When a firm has different sources of financing, the cost of…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: Financial management is considered as an indispensable part of business because it plays a…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: a. Market value = Debt + Equity + Preferred stock Market value = ($450,000*102%) + (35,000*$47) +…
Q: Lingenburger Cheese Corporation has 7.4 million shares of common stock outstanding, 270,000 shares…
A:
Q: The market risk premium for FCIB is 9 percent, and has a tax rate of 35 percent. The risk-fr rate of…
A: Q3. We need to calculate market value of willow woods capital structure and rate for discounting…
Q: You are given the following information for Lightning Power Company. Assume the company's tax rate…
A:
Q: Flora Fountain has 26,000 shares of equity priced at $67 per share and the cost of equity is 13.60…
A: WACC = Ke * wte + Kpsc * wtpsc + Kd (1-0.35) * wtd
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: a) Computation:
Q: Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $71, and…
A: Weighted Avg. Cost of Capital(WACC) is avg. cost of financing the given capital structure of the…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: Part (a): Calculation of total market value of the firm: Answer: Total market value of the firm is…
Q: Danı Corporation has 7 million shares of common stock outstanding. The current share price is $79,…
A: WACC is the average cost of capital which can be calculated by using this equation WACC =weight of…
Q: The Smith Company has 10,000 bonds outstanding. The bonds are selling at 102% of face value, have a…
A: Given information: Stock price is $64 Dividend paid is $1.10 Growth rate is 3% Risk free rate is…
Q: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of…
A: Total no. of ordinary shares out standing is 35,000 Price per share is $47 rate of return is 13.5%…
Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a
Step by step
Solved in 2 steps
- Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate ofreturn of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of$58 a share. The preferred share has a par value of $100. The outstanding bond has a total face valueof $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.Required:a) Calculate the total market value of the firm. b) Calculate the capital structure of the firm. (Please round up the result at 3 decimalplaces)c) Calculate the firm's weighted average cost of capital if the tax rate is 30%, assuming a classical taxsystem Answer in wordMasterson, Inc., has 7 million shares of common stock outstanding. The current share price is $73, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $90 million, has a coupon rate of 6 percent, and sells for 98 percent of par. The second issue has a face value of $75 million, has a coupon rate of 5 percent, and sells for 110 percent of par. The first issue matures in 22 years, the second in 7 years. Both bonds make semiannual coupon payments. a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) b. What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) c. Which are more relevant, the book or market value weights?Masterson, Inc., has 8 million shares of common stock outstanding. The current share price is $82, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $135 million, has a coupon rate of 7 percent, and sells for 93 percent of par. The second issue has a face value of $120 million, has a coupon rate of 6 percent, and sells for 102 percent of par. The first issue matures in 25 years, the second in 9 years. Both bonds make semiannual coupon payments. What are the company's capital structure weights on a book value basis? Equity/Value ___________ Debt/Value ____________ What are the company's capital structure weights on a market value basis? Equity/Value __________ Debt/Value ___________
- Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of$58 a share. The preferred share has a par value of $100. The outstanding bond has a total face valueo of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.Required:a) Calculate the total market value of the firm.b) Calculate the capital structure of the firm. (Please round up the result at 3 decimalplaces)c) Calculate the firm's weighted average cost of capital if the tax rate is 30%, assuming a classical taxsystem.Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%. Please answer:a) Calculate the total market value of the firm. b) Calculate the capital structure of the firm. (Please round up the result at 3 decimal places)c) Calculate the firm's weighted average cost of capital if the tax rate is 30%, assuming a classical tax system.Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.Answer Required Both: a) Calculate the total market value of the firm. b) Calculate the capital structure of the firm. (Please round up the result at 3 decimal places) c) Calculate the firm's weighted average cost of capital if the tax rate is 30%, assuming a classical tax system.
- Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%. Required: a) Calculate the total market value of the firm. b) Calculate the capital structure of the firm. c) Calculate the firm's weighted average cost of capital if the tax rate is 30%, assuming a classical tax system.Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%. Required: a) Calculate the total market value of the firm. b) Calculate the capital structure of the firm. (Please round up the result at 3 decimal places) c) Calculate the firm's weighted average cost of capital if the tax rate is 30%, assuming a classical tax system. Please dont use excel sheets and excel workings for the answer.Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.Required:a) Calculate the total market value of the firm. b) Calculate the capital structure of the firm. (Please round up the result at 3 decimalplaces)c) Calculate the firm's weighted average cost of capital if the tax rate is 30%, assuming a classical tax system. Please provide all subheading answer