calculate weighted average cost of capital if: 1) share of debt from total capital is 25% and cost of debt is 8% 2)share of preference shares from total capital is 25% and the cost of preference shares is 10% 3)share of equity shares from total capital is 35% and the cost of equity shares is 15% 4)share of retained earning from total capital is 15% and the cost of retained earning is 6% Select one: a. 10.1% b. 11.1% c. None of them is correct d. 10.7%

calculate weighted average cost of capital if: 1) share of debt from total capital is 25% and cost of debt is 8% 2)share of preference shares from total capital is 25% and the cost of preference shares is 10% 3)share of equity shares from total capital is 35% and the cost of equity shares is 15% 4)share of retained earning from total capital is 15% and the cost of retained earning is 6% Select one: a. 10.1% b. 11.1% c. None of them is correct d. 10.7%

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

Problem 1PS

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Assume Skyler Industries has debt of $4,950,000 with a cost of capital of 7.2% and equity of $4,950,000 with a cost of capital of 10.8%. What is Skyler’s weighted average cost of capital? Round your intermediate calculations and final answer to 3 decimal places.
14 A. Assume Skyler Industries has debt of $4,377,783with a cost of capital of 9.7% and equity of $5,791,640 with a cost of capital of 6%. What is Skyler’s total weighted average cost of capital? Round to the nearest hundredth, two decimal places and submit the answer in a percentage
The target capital structure is said to be constant with: Maximum Earnings Per Share (EPS) O Minimum Cost of Debt Minimum Cost of Equity O Minimum Weighted Average Cost of Capital (WACC) MM Proposition O Minimum Risk
The Sunland Products Co. currently has debt with a market value of $300 million outstanding. The debt consists of 9 percent coupon bonds (semiannual coupon payments) which have a maturity of 15 years and are currently priced at $1,434.63 per bond. The firm also has an issue of 2 million preferred shares outstanding with a market price of $10 per share. The preferred shares pay an annual dividend of $1.20. Sunland also has 14 million shares of common stock outstanding with a price of $20.00 per share. The firm is expected to pay a $2.20 common dividend one year from today, and that dividend is expected to increase by 5 percent per year forever. If Sunland is subject to a 40 percent marginal tax rate, then what is the firm's weighted average cost of capital? Eyeol Template
Assume Skyler Industries has debt of $4,074,000 with a cost of capital of 7.3% and equity of $5,626,000 with a cost of capital of 10.0%. What is Skyler’s weighted average cost of capital? Round your intermediate calculations and final answer to 3 decimal places. fill in the blank %
3
Assume Skyler Industries has debt of $4,398,941with a cost of capital of 9% and equity of $5,435,265 with a cost of capital of 6.1%. What is Skyler’s weighted average cost of capital for debt? Round to the nearest hundredth, two decimal places and submit the answer in a percentage.
Determine Garneau's optimal capital structure based on the following information: Debt EPS DPS Stock Price 20% 2.2 1.1 40.12 30% 2.4 40% 2.6 50% 2.8 Equity 80% 70% 60% 50% O a. 20% debt; 80% equity O b. 40% debt; 60% equity O c. 50% debt; 50% equity O d. 30% debt; 70% equity 1.2 1.3 1.4 41.34 40.52 39.42
Percent of capital structure: Preferred stock Common equity (retained earnings) Debt Additional information: Corporate tax rate Dividend, preferred Dividend, expected common Price, preferred Growth rate Bond yield Flotation cost, preferred Price, common 15% 45 40 35% Debt Preferred stock Common equity (retained earnings) Weighted average cost of capital $ 8.00 $ 3.50 $ 105.00 98 8% $ 10.40 $ 78.00 Calculate the weighted average cost of capital for Digital Processing Incorporated Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. Answer is complete but not entirely correct. Weighted Cost 5.20 % 8.33 11.50 25.03 %
Calculate the Weighted Average Cost of Capital (WACC) Cost of Equity = 11.02% Cost of Debt = 5.35% Debt-to-Equity Ratio = 15.52%
Which of the following capital structures has the highest EBIT-EPS break-even point compared to an all equity capital structure? a. 25% debt / 75% equity b. 75% debt / 25% equity c. 50% debt / 50% equity d. 95% debt / 5% equity
Capital structure of the ABC PJSC is as follows: Equity share capital market value $ 200 million, dividend $ 4 , market price per share $88, dividend growth 4%. Bond $ 300 million, Yield to maturity 4% , tax rate 20% Calculate weighted average cost of capital.

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