A company has long-term debt of $25 million, which has an average interest rate of 11%. The company's market capitalization is $70 million. If the tax rate is 45% and the cost of equity is 16%, determine the weighted average cost of capital.
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- Company A has a debt to equity ratio to one. Its cost of equity is 20% and its cost of debt is 10%. Assuming a tax rate of 50%. Company A's weighted average cost of capital is? (write the process of calculation.)Oblib Inc. has a debt-equity ratio of 2, and a weighted average flotation cost of 4%. What is the dollar flotation cost if the company were to raise $1.5 million in the capital market? Please if you can, show all calculationsKN Stitches has debt of $26,000, a leveraged value of $78,400, a pretax cost of debt of 7.05 percent, a cost of equity of 15.3 percent, and a tax rate of 21 percent. What is the weighted average cost of capital?
- A firm has a total market value of $10 million while its debt has a market value of $4 million. What is the after-tax weighted average cost of capital if the before-tax cost of debt is 10% the cost of equity is 15%, and the tax rate is 21%? Multiple Choice A) 10.4% B) 8.8% C) 12.2% D) 13.0%The cost of capital is 15%, the before-tax cost of debt is 9%, and the mar-ginal income tax rate is 40%. The market value of debt is $50 million and the market value of equity is $50 million. What is the cost of equity?Assume the following data for U&P Company: Debt (D) = $100 million; Equity (E) = $300 million; rD = 6%; rE = 12%; and TC = 30%. Calculate the after-tax weighted average cost of capital (WACC): Multiple Choice A) 10.5% B) 10.05% C) 15% D) 9.45%
- New Energy’s capital structure today is $1,347 million in Long Term Debt and $1,655 million in Common Equity. If its debt were issued today, New Energy would pay an interest rate of 8.2%/year (before tax). New Energy’s Cost of Equity is estimated to be 12%/year. Given a tax rate of 30%, what is New Energy’s Weighted Average Cost of Capital (WACC)? (Your answer should be a % carried to 2 places.)Company A is financed by 20% of debt and the rest of the company is financed by common equity. The company’s before-tax cost of debt is 5%, and its cost of equity is 11%. If the marginal tax rate is 30%, the company’s weighted average cost of capital (WACC) is _____.Company X has debt and equity as sources of funds. Company X has market value of debt as $150,000 and book value of debt as $80,000. The company has book value of equity as $100,000 and market value of equity as $125,000. The cost of debt is 8.25% and cost of equity is 9.57%. the tax rate is 38%. What is the Weighted Average Cost of Capital (WACC)? a. 7.59% b. 7.78% c. 7.14% d. 7.68%
- Fusion Packaging is financed with 55% equity and 45% debt. The required rate of return on its debt is 4.4% and 12% on its equity. If the tax rate is 25%, what is Fusion's weighted-average cost of capital? Enter your answer as a percentage rounded to 2 decimal places.Petra plc. has a current and target leverage ratio of 0.8, the finance cost from loans is 16 per cent, and a cost of equity of 20 per cent. The corporation tax rate is 35 per cent. What is the weighted cost of capitalPT. Sentosa Raya uses its own capital and debt capital. The agreed cost of debt is 10% and the interest to be paid on the debt is Rp. 3,000,000. The company earned an operating profit of Rp. 24,000,000 per year. The expected return is 30% per year. With these data, determine the value of the company and the company's cost of capital!