The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 398 Weeks Ago, 3 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
The following balance sheet reflects market values of the target proportions of Firm BAc€?cs capital structure. Assets $54,380 Debt $20,664 Pref Stk $ 4,894 Com. Stk $28,822 Firm A plans to finance the project from the following sources: Debt: Outstanding bonds of firms of similar risk and maturity as Firm B have an annual coupon of 6.75 percent, paid semiannually, mature in 15 years, and currently sell for $992. The firmAc€?cs marginal tax rate is 39%. Preferred Stock: The firm plans to issue 8% preferred stock with a par value of $40. The shares are expected to sell for $44. Common Stock: The most recent dividend on the common shares, D0 was $1.65 and that dividend is expected to grow at 3.5 percent per year. The expected issue price is $34.00. Use the dividend discount model discussed in the PP slides to estimate the cost of common stock. Using this information, estimate Firm AAc€?cs weighted average cost of capital. Show all calculations for the weights, the component costs of capital, and the WACC (interim results for component costs in percent to three decimal places and cost of capital to two decimal places, (e.g. KP = 6.352%, WACC = 8.25%) . For the cost of debt, list all the keystrokes and values input to the financial calculator, e.g. PV = xxxx, PMT = yyy, etc. Check Answers: KD = 6.836%, KP = 7.273%, Ke = 8.523%, WACC = 6.76%
Hel-----------lo -----------Sir-----------/Ma-----------dam----------- Â----------- -----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------acq-----------uis-----------iti-----------on -----------of -----------my -----------sol-----------uti-----------on.-----------Ple-----------ase----------- pi-----------ng -----------me -----------on -----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill----------- be----------- ca-----------tch-----------