Calculate the cost of capital for a bond whose yield to maturity is 10% and the firm's tax rate of 34% a. 34% b. 10% c. 11% d. 6.6%
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Calculate the cost of capital for a bond whose yield to maturity is 10% and the firm's tax rate of 34%
a. 34%
b. 10%
c. 11%
d. 6.6%
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- Cost of capitalCost of debtGiven the following calculate the Cost of Equity. Beta Equity Risk Premium Pre-tax Yield on Debt Return on the Bond Market Return on the Stock Market Risk Free Rate Tax Weight of Debt in the Total Capital Structure Weight of Equity in the Total Capital Structure 1.5 5.5% 6.0% 4.5% 8.0% 2.5% 25.0% 25.0% 75.0%
- options A)3.8% B)20.9% C)5.1% D)6.8%D Question 7 Given are the following data: Cost of debt ro = 6%; Cost of equity = re = 12.1%; Marginal tax rate - 35%; and the firm has 50 percent debt and 50 percent equity. Calculate the after-tax weighted average cost of capital (WACC). O 7.1 percent 9 percent 8 percent O 5.9 percentPlease calculate investment in net working capital, net cash flows, and present value of net cash flows! Thank you!
- Explain the table.A firm has an outstanding bond paying a coupon rate of 12%. The firm's tax rate is 34%. If the yield-to-maturity on the bond is 6.18%, what is the firm's after-tax cost of debt? Select one: A. 12.00% B. 4.08% C. 7.92% D. 6.18%Suppose the real rate is 1%, the risk-free rate is 4%, maturity risk premium is 2%, inflation premium is 3%, the default risk on similar debt is 3%, and the liquidity premium is 2%. What is the nominal interest rate on this venture’s debt capital? A. 11% B. 12% C. 13% D. 14% E. 15% the answer is 11% could u please show working to how they go the answer
- 12.Estimate your firm’s Weighted Average Cost of Capital. Assume that the current risk-free rate of interest is 3.5%, the market risk premium is 5%, and the corporate tax rate is 21%. Ø Debt: • Total book value: $10 million • Total market value: $12 million • Coupon rate: 6% • Yield to Maturity: 5% Ø Common Stock: • Total book value: $15 million • Total market value: $20 million • Beta = 1.1 Ø Preferred Stock: • Total book value: $2 million • Total market value: $2.5 million • Price per share: $20 • Dividend per share: $1.50 What is your firm’s Weighted Average Cost of Capital (input as a raw number, i.e. if your answer is 7.1%, input 7.1)?A firm has two components in its capital structure, debt and equity. The after-tax cost of debt is 3% and the cost of equity is 11%. The proportion of equity in the capital structure is 75%. What is the firm's Weighted Average Cost of Capital? Select one: a. 9.47% b. 8.78% c. 9.00% d. 8.37%