From the figures mentioned below of Umbrella Corp, calculate the Weighted Average Cost ofCapital (WACC)."Interest expenses$443 millionCorporate tax rate30%Default spread1.56%Market Value of short term debt$885 millioneMarket Value of long term debt$9,552 millioneMarket value of operating liabilities$1200 millionTotal asset of firm$18,349 millionSystematic risk -0.79Market value of equity$21,129 millionRisk free rate1.7%Market risk premium a4.72%

The capital structure of the company consists of different sources of capital. The cost of these…

From the figures mentioned below of Umbrella Corp, calculate the Weighted Average Cost of Capital (WACC).- Interest expenses $443 million Corporate tax rate 30% Default spreade 1.56% Market Value of short term debte $885 million Market Value of long term debte $9,552 millione Market value of operating liabilities $1200 millione Total asset of firm $18,349 million Systematic risk a 0.79 Market value of equity $21,129 million Risk free rate 1.7% Market risk premium a 4.72%

From the figures mentioned below of Umbrella Corp, calculate the Weighted Average Cost of Capital (WACC).- Interest expenses $443 million Corporate tax rate 30% Default spreade 1.56% Market Value of short term debte $885 million Market Value of long term debte $9,552 millione Market value of operating liabilities $1200 millione Total asset of firm $18,349 million Systematic risk a 0.79 Market value of equity $21,129 million Risk free rate 1.7% Market risk premium a 4.72%

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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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

From the figures mentioned below of Umbrella Corp, calculate the Weighted Average Cost of
Capital (WACC)."
Interest expenses
$443 million
Corporate tax rate
30%
Default spread
1.56%
Market Value of short term debt
$885 millione
Market Value of long term debt
$9,552 millione
Market value of operating liabilities
$1200 million
Total asset of firm
$18,349 million
Systematic risk -
0.79
Market value of equity
$21,129 million
Risk free rate
1.7%
Market risk premium a
4.72%

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