Cost of debtTax RateCost of equityDebt/EVPart a.SourceDebtEquityPart b.SourceDebtEquityPROBLEM 4-3Given6%30%14%20%SolutionProportion After-tax cost ProductSolution Legend■ Value given in problemFormula/Calculation/Analysis requiredQualitative analysis or Short answer required= Goal Seek or Solver cell= Crystal Ball Input= Crystal Ball OutputSolutionWACCProportion After-tax cost ProductWACC

An important financial indicator called Weighted Average Cost of Capital (WACC) determines how much…

Answered: Cost of debt Tax Rate Cost of equity…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 1Q

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(D/D+E)kd(1-T) + (E/D+E)k2 is also known as Group of answer choices The required rate of equity return The required rate of debt cost The weighted average cost of capital The average cost of equity
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Problem 9-19 MIRR [LO6] Duo Corporation is evaluating a project with the following cash flows: Year 012345 Cash Flow -$ 28,000 10,200 12,900 14,800 11,900 -8,400 The company uses an interest rate of 9 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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Which one of the following formulas is correct? O i) Profit margin = EBIT / Sales ii) ROA = ROE / Equity multiplier %3D O ii) Capital intensity ratio = 1 / Return on assets O iv) Quick ratio = Cash / Current liabilities
What are two kinds of paid-in capital accounts?
Formula for Weighted Average cost of capital is WACC wdT(rdT) + wrP(rP) + wr$(rS) WACC wd(rdT) + wPS(rPS) + w$(rS) WACC = wdS(rdS) + wPS(rPS) + WS(rS) WACC = wdP(rdP) + wPS(rPS) + w$(rS) Clear my selection
Debt Coverage Ratio DCR = DS ÷ EGI %3D O DCR = GSI - OP EX DCR = NOI÷DS O DCR = GSI - VAC
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6 Suppose Blooper's financials are as follows: See SPREADSHEET 9.1 Inputs Initial Investment Salvage value Initial revenue Initial expenses Inflation rate Discount rate ok Acct receivable as % of sales Investment as % of expenses Tax rate 150 Spreadsheet Name Investment 20 Salvage 150 Initial revenue 100 Initial expenses 5.0% 1.1% 1/4 15.0% 21.0% Inflation Discount rate AR Inv_pct Tax rate Calculate Blooper's working capital in each year of its project. Year Working Capital 0 1 23 4 5 6 CO
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