Suppose Abraxas Corp. has an equity cost of capital of 8.2%, market capitalization of $11.37 billion, and an enterprise value of $17.12 billion. Suppose Abraxas's debt cost of capital is 5.6% and its marginal tax rate is 21%. What is Abraxas's WACC?

Q: Hilltop Paving has a levered equity cost of capital of 14.92 percent. The debt-to-value ratio is .4,…

A: rE = rU + [(D/E) x (1-t) x(rU-rD)]WhererE = Levered equity cost of capital = 14.92% or 0.1492rU =…

Q: Suppose Goodyear Tire and Rubber Company has an equity cost of capital of 8.5%, a debt cost of…

A: The Weighted Average Cost of Capital (WACC), also known as Composite Cost of Capital or Average Cost…

Q: A firm has EBIT of $30 million. It has debt of $100 million and the cost of debt is 7%. Its…

A: The value of unlevered firm can be calculated by using equation below.Unlevered firm value…

Q: Suppose Alcatel-Lucent has an equity cost of capital of 10.4%, market capitalization of $11.52…

A: WACC = (Cost of equity x Weight of equity) + (Cost of debt x (1-tax rate) x Weight of debt)Weight of…

Q: A company has a beta of 1.4, pre-tax cost of debt of 5.9% and an effective corporate tax rate of 25…

A: WACC means weighted average cost of capital.It is calculated as follows:-WACC =…

Q: Find the WACC given the following information: A firm has a cost of equity of 8% and cost of debt of…

A: Weighted average cost of capital generally referred to by its abbreviation 'WACC' is the average…

Q: Suppose Woodsburg’s capital structure is 60% equity and 40% debt, and that its marginal tax rate…

A: WACC : [D/D+E]*rd * (1-t) +[ D/D+E] *re  If the marginal tax rate increases, the after-tax cost of…

Q: Capital structure​ analysis)  The liabilities and​ owners' equity for Campbell Industries is found​…

A: The percentage of assets funded by liabilities is calculated as debt ratio of the firm.

Q: A firm has a tax burden of 0.7. a leverage ratio of 1.3, an interest burden of .8, and a…

A: We need to use Du Pont method to calculate ROE. The equation isROE = Tax burden ratio*Interest…

Q: Suppose that MNINK Industries' capital structure features 63 percent equity, 8 percent preferred…

A: WACCWACC refers to Weighted Average Cost of capital it evaluates the average cost a company or firm…

Q: 1. The basic WACC equation The calculation of WACC involves calculating the weighted average of the…

A: Value of debt = $3.9 millionValue of preferred stock = $3 millionValue of common equity = $2.1…

Q: For examples 1 and 2, assume the net cash flow is 2,000,000, the tax rate is 40% and the cost of…

A: The capital structure of a company is comprised of debt and equity. Both these sources of finance…

Q: Suppose that B2B, Inc. has a capital structure of 35 percent equity, 16 percent preferred stock, and…

A: Calculation of WACC:The WACC is 9.59%.Excel Spreadsheet:

Q: You were asked to estimate the cost of equity based on the three most commonly used methods and then…

A: Cost of equity: It represents the cost of raising equity capital for the firm to expand its…

Q: Which of the following firms is the most leveraged? O Cash coverage ratio 1.64 Cash coverage ratio…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Consider a firm that has 15% of debt. The rate of return for debt is 6% and the rate of return for…

A: Weight of debt of firm(Wd) =15%

Q: Suppose Alcatel-Lucent has an equity cost of capital of 10.1%, market capitalization of $11.52…

A: Capital budgeting is the procedure of analyzing potential projects and allocating the company's…

Q: A company has determined that its optimal capital structure consists of 34 percent debt and the rest…

A: WACC stands for Weighted Average Cost of Capital. It represents the average rate of return a company…

Q: Calculate

A: To determine the operating Return on Assets (ROA) for the firm, we need to use the given information…

Q: 2. What would be the WACC if the company in question 1 changed its debt-to-equity ratio to zero?

A: The debt to equity ratio is the proportion of debt of total equity in total invested capital. It is…

Q: A company has an expected EBIT of $18,000 in perpetuity, a tax rate of 35%, and a debt-to- equity…

A: The unlevered cost of capital is the cost of capital for a company if it had no debt. It represents…

Q: Petra plc. has a current and target leverage ratio of 0.8, the finance cost from loans is 16 per…

A: Weighted cost of capital: It can be defined as the rate that is paid by the company on the average…

Q: Intro Munding Corp. has debt with a market value of $23 million and equity with a market value of…

A: Weighted Average Cost Capital means the cost which was borne by the company  in overall terms for…

Q: Trout and the market data of Salmon for the weights in the weighted average cost of capital: If the…

A: Given Data: Book valueDebt 7896109Equity4003759Cost of Debt = 10.3%Cost of Equity = 14.38%

Q: What is the cost of equity (%)?  What is the post-tax cost of debt (%)? What is the WACC (%)?…

A: With cost of equity (re), post tax cost of debt (rd), debt (D) and equity (E), WACC is calculated as…

Q: Suppose Alcatel-Lucent has an equity cost of capital of 10.2%, market capitalization of $11.20…

A: Years0123FCF-$100.00$55.00$103.00$74.00Debt$38.84$31.34$13.57$0.00Interest$0.00$2.52$2.04$0.88Equity…

Q: Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure the…

A: A company's average after-tax cost of capital from all sources, including common stock, preferred…

Q: The​ after-tax cost of debt using the​ bond's yield to maturity​ (YTM) is _____​(Round to two…

A: The after tax cost of debt using the RATE function in excel: RATE = (NPER, PMT, PV, FV) where NPER =…

Q: ager each specific type of capital as well as the weighted average cost is to be measured by using…

A: WACC is the expected rate that the company is expecting to pay to the sources of finance. In this,…

Q: Netglobe Ltd is a well established company providing telecommunications services. An analyst has…

A: Growth rate after year 3 = 3%  WACC = 10%  FCF3=FCF1(1+gs)3 =$16 million×(1+0.05)3 =$18.522 million…

Q: What is the firm's new cost of equity? None of the choices New cost of equity is 26.05% New cost of…

A: The capital asset pricing model aids analysts and investors in calculating the expected return on…

Q: A business has a cost of equity of 9.5 percent and a pretax cost of debt of 5.4 percent. The debt -…

A: The cost of capital is the return rate a company must pay to its investors in order to attract…

Q: Suppose a firm raises $21 million dollars by issuing debt at a cost of 6.1%, raises $15 million by…

A: GivenValue of debt (D) = $21 million Value of Equity (E) = $15 million Value of preferred stock (P)…

Q: The following information is available regarding XYZ Co. sales = $250,000 net income = $35,000…

A: Here, Sales is $250,000Net Income is $35,000Dividends is $10,000Total Debt is $100,000Total Equity…

Q: Assuming that the above information remains constant, find the Weighted Average Cost of Capital…

A: Information Provided: Cost of equity = 13.00% Cost of debt = 5.60% Corporate tax = 25% Debt to…

Q: If a firm has an EV of $820 million and EBITDA of $187 million, what is its EV ratio?

A: Given: EV = $820 million EBITDA = $187 million

Q: Suppose Goodyear Tire and Rubber Company has an equity cost of capital of 7.6%, a debt cost of…

A: The Weighted Average Cost of Capital (WACC), sometimes referred to as the Composite Cost of Capital…

Q: Suppose your firm has a market value of equity is $500 million and a market value of debt is $475…

A: Given: Market value of equity = $500 Million Market value of debt = $475 Million

Q: A firm has only two funding sources, debt and equity. Their percentage of debt is 58%, their tax…

A: Recall that the weighted average cost of capital (WACC) can be calculated using the following…

Q: Suppose Goodyear Tire and Rubber Company has an equity cost of capital of 8.6​%, a debt cost of…

A: Here, Equity Cost of Capital8.60%Debt Cost of Capital7.10%Tax Rate24%Debt Equity Ratio2.5

Q: Suppose you are estimating the WACC for Columbus Inc. It has the following data from its balance…

A: To calculate Columbus Inc.'s weighted average cost of capital (WACC), we need to consider the…