Company fly high has 3 million shares of common stock outstanding at a book value of $2.5 per share. The stock trades for $3.50 per share. It also has $2 million in face value debt that trades at 110% of par. What is its D/E ratio for WACC purposes? a. 20.95% b. 25.35% c. 17.32% d. 21.50%
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- Assume JUP has debt with a book value of $20 million, trading at 120% of par value. The firm has book equity of $26 million, and 2 million shares trading at $19 per share. What weights should JUP use in calculating its WACC? O A. 30.97% for debt, 69.03% for equity O B. 34.84% for debt, 65.16% for equity O C. 38.71% for debt, 61.29% for equity O D. 27.1% for debt, 72.9% for equityThe Meryl Corporation's common stock currently is selling at $100 per share, which represents a P/E ratio of 10. If the firm has 100 shares of common stock outstanding, a return on equity of 20 percent, and a debt ratio of 60 percent, what is the return on total assets (ROA)? a. 8.0% b. 10.0% с 12.0% 16°10 doThe Sweet Melon Corp. has total 100 shares trading on the market at $20 each.The book value of the total equity is $3500.The total market value of debt issurance is $4000.The expected return on total assets is 15% and the expected return on debt is 10%.What is the estimated return on equity? A.17.5% B.25% C.None of the choices D.18.3
- 7. ABC Corp has 1.4 million shares common valued at $20 per share =$28 million. Debt has face value of $5 million and trades at 93% of face ($4.65 million) in the market. Total market value of both equity + debt thus =$32.65 million. Equity % = .8576 and Debt % = .1424 Risk free rate is 4%, risk premium-7% and ABC's ß=.74 Current yield on market debt is 11%; Tax rate is 40% . Find out the Returm on equity, Return on debt and WACC.Book Co. has 1.0 million shares of common equity with a par (book) value of $1.00, retained earnings of $30.0 million, and its shares have a market value of $50.00 per share. It also has debt with a par value of $20.0 million that is trading at 101% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? a. What is the market value of its equity? The market value of the equity is $ million. (Round to two decimal places.) b. What is the market value of its debt? The market value of the debt is $ million. (Round to two decimal places.) c. What weights should it use in computing its WACC? The debt weight for the WACC calculation is %. (Round to two decimal places.) The equity weight for the WACC calculation is places.) %. (Round to two decimal2. Book Co. has 1.5 million shares of common equity with a par (book) value of $1.15, retained earnings of $29.9 million, and its shares have a market value of $50.88 per share. It also has debt with a par value of $18.2 million that is trading at 102% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? **round to two decimal places**
- CO A has cash flows of $0.76 per share, earnings of $1.25 per share and 115,000 shares outstanding. Co B. is a comparable public company with a price of $60 per share, cash flows of $2.14 per share, and 510,000 shares outstanding. If Co Bis a sufficiently comparable company, what do you estimate Co B. price per share to be? Assume: Risk free rate 4% Market risk premium 7% Cost of debt 4%, beta of debt is 0. Tax rate 23%Assume a company has 10mm outstanding shares of stock that currently trade at $50 per share. Assume the company cost of equity is 18% and its after-tax cost of debt is 6%. Assume the company has $250mm in long term debt and $50mm of other liabilities. What is the WACC?A firm has 1 million shares outstanding with a book value per share of $10 per share. The stock sells for a price of $20 per share. The firm’s bonds have a par value of $8 million and are currently selling at a price of 120 percent of par. What is the appropriate proportion of equity to use in the WACC calculation? 71.4 percent 51.0 percent 55.6 percent 48.0 percent 67.6 percent
- Chisel Corporation has 3 million shares outstanding at a price per share of $3.25. If the deb-to-equity ratio if 1.7 and a total book value of debt equals $12,400,000, what is the market-to-book ratio for Chisel CorporationA company has the following information in its statement of financial position. Ghs'm Ordinary shares of Ghs5 250 12% unsecured bonds 100 The ordinary shares are currently quoted at Ghs 13 each and the bonds are trading at Ghs720 per Ghs1,000 nominal. The ordinary dividend of Ghs 1.50 has just been paid with an expected growth rate of 10%. Assume corporation tax is currently 16.5%. Calculate the WACC for this companyMicro Corp. has 1,000,000 shares of common stock outstanding and i (i.e. the bond price is 1.16 times the par value). The par value of the b A. 27.5% B. 33.9% C. 31.69% D. 28.57% E. 31.0%
