St. Louis Health Group has a total of $500 million in capital. They have $150 million in debt and $350 million in common equity. Assume their after-tax rate on debt is 7% and the rate on common stock is 13%. What is their WACC?
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- What is the weighted average cost of capital on these financial accounting question?Suppose you are estimating the WACC for Columbus Inc. It has the following data from its balance sheet: total debt = $200 million; total equity=$120 million. It has 20 million shares outstanding, and its stock is trading at $32 per share. Your analysis shows that the company's current borrowing rate is 7%, and that the cost of equity is 13%. If the company marginal tax rate is 30%, what is its WACC?What is their weighted average cost of capital on these financial accounting question?
- Company X has debt and equity as sources of funds. Company X has market value of debt as $150,000 and book value of debt as $80,000. The company has book value of equity as $100,000 and market value of equity as $125,000. The cost of debt is 8.25% and cost of equity is 9.57%. the tax rate is 38%. What is the Weighted Average Cost of Capital (WACC)? a. 7.59% b. 7.78% c. 7.14% d. 7.68%Benjamin Manufacturing has a target debt-equity ratio of .45. Its WACC is 11.2%, and its cost of debt is 9 percent. What is the cost of equity if the tax rate is 20%?Fama's Llamas has a weighted average cost of capital of 11 percent. The company's cost of equity is 15 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 32 percent. What is the company's target debt-equity ratio? a) 0.678 b) 0.7119 c) 0.7051 d) 1.1429 e) 0.6441
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