QUESTION 1a) The following Capital structure is extracted from Mirza Corporation Sdn Bhd amultinational company producing electronic gadgets. The capital structure on Jun 2022 isas followed. The number of common stock outstanding was 40,000 units and value isRM$8,000,000. The preference share valued at RM$2,000,000 and expected dividendpayout is 11%. The preferred stock par value is RM$1.00 and current internal trading priceis RM1.08. We have taken debenture as loan which amount to RM$6,000,000 and pay12% as interest rate. The par value of debenture is RM$100 and Market price is RM$90.The share of the company currently is traded for RM$25. The company is expected to paya divided of RM$2 per common share which will grow at 7% forever. The tax bracket forthe company is 40%.I. Compute the Capital structure and the proportionII.Compute the cost of the capital for Mirza's Capital structure.III.Compute the weighted average cost of capital for the existing capital structure. QUESTION 1a) The following Capital structure is extracted from Mirza Corporation Sdn Bhd amultinational company producing electronic gadgets. The capital structure on Jun 2022 isas followed. The number of common stock outstanding was 40,000 units and value isRM$8,000,000. The preference share valued at RM$2,000,000 and expected dividendpayout is 11%. The preferred stock par value is RM$1.00 and current internal trading priceis RM1.08. We have taken debenture as loan which amount to RM$6,000,000 and pay12% as interest rate. The par value of debenture is RM$100 and Market price is RM$90.The share of the company currently is traded for RM$25. The company is expected to paya divided of RM$2 per common share which will grow at 7% forever. The tax bracket forthe company is 40%.I. Compute the Capital structure and the proportionII.Compute the cost of the capital for Mirza's Capital structure.III.Compute the weighted average cost of capital for the existing capital structure.

Weighted average capital(WACC) structure is the average capital structure of the company. It can be…

a) The following Capital structure is extracted from Mirza Corporation Sdn Bhd a multinational company producing electronic gadgets. The capital structure on Jun 2022 is as followed. The number of common stock outstanding was 40,000 units and value is RM$8,000,000. The preference share valued at RM$2,000,000 and expected dividend payout is 11%. The preferred stock par value is RM$1.00 and current internal trading price is RM1.08. We have taken debenture as loan which amount to RM$6,000,000 and pay 12% as interest rate. The par value of debenture is RM$100 and Market price is RM$90. The share of the company currently is traded for RM$25. The company is expected to pay a divided of RM$2 per common share which will grow at 7% forever. The tax bracket for the company is 40%. II. III. Compute the Capital structure and the proportion Compute the cost of the capital for Mirza's Capital structure. Compute the weighted average cost of capital for the existing capital structure. ww

a) The following Capital structure is extracted from Mirza Corporation Sdn Bhd a multinational company producing electronic gadgets. The capital structure on Jun 2022 is as followed. The number of common stock outstanding was 40,000 units and value is RM$8,000,000. The preference share valued at RM$2,000,000 and expected dividend payout is 11%. The preferred stock par value is RM$1.00 and current internal trading price is RM1.08. We have taken debenture as loan which amount to RM$6,000,000 and pay 12% as interest rate. The par value of debenture is RM$100 and Market price is RM$90. The share of the company currently is traded for RM$25. The company is expected to pay a divided of RM$2 per common share which will grow at 7% forever. The tax bracket for the company is 40%. II. III. Compute the Capital structure and the proportion Compute the cost of the capital for Mirza's Capital structure. Compute the weighted average cost of capital for the existing capital structure. ww

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

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Railsplitters, Inc. has the following information for its capital structure: Instrument: Amount Issued Current Price YTM Bond A $500 Million 100.82 4.36% Bond B $350 Million 101.36 4.49% Common Stock 42.5 Million Shares $28.21 per share E(R ) Market = 8.65% β = 1.27 Expected Dividend = $1.95 Rf = 2.10% Growth Rate = 2.75% Given this information, if the tax rate of the firm is 30%, what is the after-tax cost of debt?
1. You are required to calculate the Weighted Average Cost of Capital (WACC) of Sethoo & Sons Limited from the data below: Black Limited Star Limited Number of Ordinary Shares (GH¢1.00) 2,000,000 1,000,000 Net Income available to Ordinary Shares 600,000 250,000 Gross Dividend 500,000 200,000 Market Price per share 3.00 2.00 Market value of Debts 3,000,000 1,500,000 Annual Growth rate of Dividend 12% 10% Gross Interest yield 10% 11% NOTE: The corporation tax rate is 50%. Debts are currently quoted at GH¢100 per block. 2. Explain why the Market Value Approach of calculating WACC is preferred to the Book Value Approach. 3. What are the uses of Weighted Average Cost of Capital?
Company E has 4 million shares of stock outstanding, 1 million shares of preferred stock, and 20,000 bonds. If the common shares sell for $28 per share, the preferred shares sell for $18.50 per share, and the bonds are selling for 97% of par, what would be the weights used in the calculation of Company E’s Weighted Average Cost of Capital (WACC)?
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The entity received P4,500,000 cash from the issuance of its 9%, 10-year P5,000,000 par value preference shares. How much is the cost of the preference shares using the following methods? 1. Yield-to-maturity formula 2. Interpolation method using multiplies of 1%
A7 please help.......
Huntington Power Co. has issued following three securities as its long-term source of capital. Calculate the weights of each source of capital (kd, kp, ke). Debt: 2,500 bonds outstanding, current market price of the bond is $1,080. Preferred Stock: 3,000 shares outstanding, selling for $98. Common Stock: 60,000 shares outstanding, selling for $55 per share. a. 42.90%; 4.67%; 52.43% b. 45.63%; 1.72%; 59.67% c. 42.90%; 4.67%; 55.71% d. 59.67%; 5.08%; 35.24% e. 45.63%; 1.72%; 52.65% f. 42.90%; 2.23%; 52.14%
The market capitalization of Morning Rose Corp. is $5,580,000 at the company's most recent trade of $9.00 per share. How many shares of stock are outstanding?
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