Reactive Power Generation has the following capital structure. Its corporate tax rate is 21%.Required Rate ofReturn4%610SecurityDebtPreferred stockCommon stockMarket Value$ 30 million30 million40 millionWhat is its WACC?Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.WACCAnswer is complete but not entirely correct.7.29%

Tax Rate = t = 21%Value of Debt = vd = $30 millionCost of Debt = cd = 4%Value of Preferred Stock =…

Answered: Reactive Power Generation has the…

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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c. What will the marginal cost of capital be immediately after that point? (Equity will remain at 45 percent of the capital structure, but will all be in the form of new common stock, Kn.) Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Marginal cost of capital % d. The 5.0 percent cost of debt referred to above applies only to the first $36 million of debt. After that, the cost of debt will be 8.5 percent. At what size capital structure will there be a change in the cost of debt? Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as "10"). Capital structure size (Z) million e. What will the marginal cost of capital be immediately after that point? (Consider the facts in both parts cand d.) Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Marginal cost of capital %
Assume the firm has a tax rate of 23 percent. c-1. Calculate return on equity (ROE) under each of the three economic scenarios before any debt is Issued. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. Calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-3. Calculate the return on equity (ROE) under each of the three economic scenarios assuming the firm goes through with the recapitalization. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-4. Given the recapitalization, calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round…
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F1
Need all three parts
Solve it using formulas, no tables correct answers are: i) i^2= 0.063977 > 0.0536 iii) Po= £91,630.9 iv) i'= 0.028985 = 2.9% pa
3. Problem 14.04 (Unlevered Beta) eBook Hartman Motors has $24 million in assets, which were financed with $8 million of debt and $16 million in equity. Hartman's beta is currently 1.2, and its tax rate is 20%. Use the Hamada equation to find Hartman's unlevered beta, bu. Do not round intermediate calculations. Round your answer to two decimal places.
only looking for parts c-1 and c-3
Use the following information for Cronos Group, Inc. (CRON): EBIT / Revenue 25.50% Government Tax Rate 42.50% Revenue / Assets 1.95 times Current Ratio 3.15 times EBT / EBIT 0.80 times Assets / Equity 2.00 times Its interest coverage ratio is closest to: A. 2.50. B. 5.00. C. 7.15. D. 9.25.
Subject:- finance
Calculate the aftertax cost of debt under each of the following conditions. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) raw C. Yield 8.0% 8.6 % 6.5 % Corporate Tax Rate 22 % 25 % Aftertax Cost of Debt % % %
Use the following information to answer this question. Total assets Total current liabilities Total expenses Total liabilities Total revenues Tax rate $150,000 105,000 70,000 110,000 80,000 40% After -tax cost of capital 12% Invested capital is defined as total assets less total liabilities. (round your answers te one decimal ) Capital turnover equal O A) 53.3% B) 2 OC) 6.7% D) 28.6%

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