COST OF COMMON EQUITY Percy Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yield to maturity on the company’s outstanding bonds is 9%, and its tax rate is 40%. Percy’s CFO estimates that the company’s WACC is 9.96%. What is Percy’s cost of common equity?
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COST OF COMMON EQUITY Percy Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yield to maturity on the company’s outstanding bonds is 9%, and its tax rate is 40%. Percy’s CFO estimates that the company’s WACC is 9.96%. What is Percy’s cost of common equity?
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- The Cost of Equity and Flotation Costs Messman Manufacturing will issue common stock to the public for $30. The expected dividend and the growth in dividends are $3.00 per share and 5%, respectively. If the flotation cost is 10% of the issue’s gross proceeds, what is the cost of external equity, re?еВook Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 11.90%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. %Cost of Common Equity Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 11.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. A.
- 1. The Dumaguete Co. has an equity cost of capital of 17%. The debt to equity ratio is 1.5 and a cost of debt is 11%. What is the weighted average cost of capital of the firm? (Assume a tax rate of 33%) a. 15.52% b. 3.06% c. 13.40% d. 16.97% 2. Metrobank’s stock is currently trading at P25 per share. The stock’s dividend is projected to increase at a constant rate of 7 percent per year. The required rate of return on the stock is 10 percent. what is the stock’s dividend yield today? a. cannot be determined from the information provided b. 3% c. 10% d. 7% 3. What is the expected rate of return on a bond that pays a coupon rate of 9%, has a par value of P1,000, matures in five years, and is currently selling for P714? Round your answer to the nearest whole percent and assume annual coupon payments. a. 13% b. 18% c. 16% d. 17%Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 8%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. ? %A company's capital structure consists of 25% debt and 75% common equity. The company has a 20% tax rate, and the cost of equity is 146. What is this company's difference in weighted average cost of capital (WACC) if the cost of debt is 6% at market value and 5% at book value and the cost of equity is 12 %? a. 0.19% b. 0.25% (b is correct, I just don't understand how.)c. 10% d. 11%
- A company finances its operations and growth opportunities, using common equity and debt. The debt-to-equity ratio of the CI Corp. is 0.2. If its cost of equity is 11%, and its pretax cost of debt is 4%, what comes closest to the company's WACC? The tax rate is 25%. 0000 14% 10% 6% 8.5%Take It All Away has a cost of equity of 10.75 percent, a pretax cost of debt of 5.41 percent, and a tax rate of 39 percent. The company's capital structure consists of 75 percent debt on a book value basis, but debt is 35 percent of the company's value on a market value basis. What is the company's WACC? Multiple Choice 10.90% 9.47% 8.14% 8.88% 6.65%Take It All Away has a cost of equity of 10.45 percent, a pretax cost of debt of 5.21 percent, and a tax rate of 34 percent. The company's capital structure consists of 65 percent debt on a book value basis, but debt is 25 percent of the company's value on a market value basis. What is the company's WACC? Multiple Choice 8.17% 9.75% 8.70% 12.39% 9.14% Next < Prev 21 of 40
- Take It All Away has a cost of equity of 10.45 percent, a pretax cost of debt of 5.21 percent, and a tax rate of 21 percent. The company's capital structure consists of 65 percent debt on a book value basis, but debt is 25 percent of the company's value on a market value basis. What is the company's WACC? Multiple Choice ● O O O 9.14% 8.17% 12.39% 9.75% 8.87%David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity of its outstanding long-term debt securities is 9% and its tax rate is 40%. Ortiz's CFO calculated the company's WACC to be 9.96%. Based on the information, what is the company's cost of equity?Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 10.70%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. Hide Feedback Incorrect