Question 40 (1 point) Listen Kosmo, Inc. has a market value capital structure of 20% debt and 80% equity. The tax rate is 40%. The firm's bonds currently trade in the market for $930. These bonds have a face value of $1,000, a coupon rate of 8% paid semiannually, and 10 years remaining to maturity. The firm's common stock trades for $15 per share. The firm has just paid a dividend of $2.00 (i.e., Do = 2.00). Future dividends are expected to grow at 3% per year. Based on this information, Kosmo, Inc.'s WACC is ______%. 1) 13.35 2) 10.91 3) 12.17 4) 14.47 5) 11.94 6) None of the answers in this list is within 0.05 percentage points of the correct answer.

1. Cotton On Ltd. currently has the following capital structure:Debt: $3,500,000 par value of outstanding bond that pays annually 10% coupon rate with an annual before-tax yield to maturity of 12%. The bond issue has face value of $1,000 and will mature in 20 years.Ordinary shares: $5,500,000 book value of outstanding ordinary shares. Nominal value of each share is $100. The firm plan just paid a $8.50 dividend per share. The firm is maintaining 4% annual growth rate in dividends, which is expected to continue indefinitely.Preferred shares: 45,000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 12%.The firm's marginal tax rate is 30%.Required:a) Calculate the current price of the corporate bond? b) Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%?c) Calculate the current price of the preferred share if the average return of the shares in the same industry is 10%  2. Giant Machinery Ltd…

Week 6 Cotton On Ltd. currently has the following capital structure: Debt: $3,500,000 par value of outstanding bond that pays annually 10% coupon rate with an annual before-tax yield to maturity of 12%. The bond issue has face value of $1,000 and will mature in 20 years. Ordinary shares: $5,500,000 book value of outstanding ordinary shares. Nominal value of each share is $100. The firm plan just paid a $8.50 dividend per share. The firm is maintaining 4% annual growth rate in dividends, which is expected to continue indefinitely. Preferred shares: 45,000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 12%. The firm's marginal tax rate is 30%. Required: a) Calculate the current price of the corporate bond? (iq zni. b) Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%? a TheT c) Calculate the current price of the preferred share if the average return of the shares in the same industry is…

please answer only last two parts Blooming Ltd. currently has the following capital structure:   Debt:  $2,500,000 par value of outstanding bond that pays annually 12% coupon rate with an annual before-tax yield to maturity of 10%. The bond issue has face value of $1,000 and will mature in 25 years.   Ordinary shares: 65,000 outstanding ordinary shares. The firm plans to pay a $7.50 dividend per share in the next financial year. The firm is maintaining 3% annual growth rate in dividend, which is expected to continue indefinitely.   Preferred shares: 40 000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 14%.   Company tax rate is 30%.   Required: Complete the following tasks:   Calculate the current price of the corporate bond? Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%? Calculate the current value of the preferred share if the average return of the shares in the same industry is…

Week 6 Cotton On Ltd. currently has the following capital structure: Debt: $3,500,000 par value of outstanding bond that pays annually 10% coupon rate with an annual before-tax yield to maturity of 12%. The bond issue has face value of $1,000 and will mature in 20 years. Ordinary shares: $5,500,000 book value of outstanding ordinary shares. Nominal value of each share is $100. The firm plan just paid a $8.50 dividend per share. The firm is maintaining 4% annual growth rate in dividends, which is expected to continue indefinitely. Preferred shares: 45,000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 12%. The firm's marginal tax rate is 30%. Required: a) Calculate the current price of the corporate bond? b) Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%? c) Calculate the current price of the preferred share if the average return of the shares in the same industry is 10%

Assume Time Warner shares have a market capitalization of $70 billion. The company is expected to pay a dividend of $0.35 per share and each share trades for $20. The growth rate in dividends is expected to be 9% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 7%. If the firm's tax rate is 25%, compute the WACC? OA) 8.31% B) 9.29% C) 8.80% D) 9.78%

8 Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 8%, and its common stock currently pays a $4.00 dividend per share (D0 = $4.00). The stock's price is currently $26.50, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 25%, and its WACC is 14.55%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places.   % 11. Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $95.00, but flotation costs will be 8% of the market price, so the net price will be $87.40 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places.   %

Twill Consulting has total assets of $1,810. These assets are expected to increase in value to either $1,900 or $2,400 by next year. The company has a pure discount bond outstanding with a face value of $2,000. This bond matures in one year. Currently, U.S. Treasury bills are yielding 5.5 percent. What is the value of the equity in this firm? Multiple Choice $7.24 $6.98 $7.89 $6.67 $7.08

Given the following information of Electric Transport Debt value: $75,000.   Debt information: 8.4 percent coupon bonds outstanding. $1,000 par value, 22 years to maturity, selling for $1,030, the bonds make annual payments   Equity value: $175,000.   Equity information: Beta is 1.21, Market return is 13.1%, and Risk-free rate is 5.1%   Assume the company's tax rate is 40%.   Calculate the WACC for this firm.   11.80%   12.78%   7.48%   9.19%

Blooming Ltd. currently has the following capital structure: Debt: S2,500,000 par value of outstanding bond that pays annually 12% coupon rate with an annual before-tax yield to maturity of 10%. The bond issue has face value of $1,000 and will mature in 25 years. Ordinary shares: 65,000 outstanding ordinary shares. The firm plans to pay a S7.50 dividend per share in the next financial year. The firm is maintaining 3% annual growth rate in dividend, which is expected to continue indefinitely. Preferred shares: 40 000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 14%. Company tax rate is 30%. Required: Complete the following tasks: a) Calculate the current price of the corporate bond? ) b) Calculate the current price of the ordinary share if the average return of the shares in the same industry is 99%6? (* the average return of the shares in the same industry is 12% - )d) Calculate the current market value (rounded off to the nearest whole number)…