Thumbtack's capital structure is shown in table below. If taxes are paid annually and Thumbtack's combined tax rate is 36 percent, determine the weighted average cost of capital Loans Bonds 12%/yr/semi $3,000,000 8%/yr/qtr $4,500,000 Common Stock $72/share price; $2,000,000 $8/shr/yr dividend; Retained Earnings (Answer should be in %) 1%/yr share price growth $1,500,000
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- Assume the following data for U&P Company: Debt (D) = $100 million; Equity (E) = $300 million; rD = 6%; rE = 12%; and TC = 30%. Calculate the after-tax weighted average cost of capital (WACC): Multiple Choice A) 10.5% B) 10.05% C) 15% D) 9.45%Webster Company has compiled the information shown in the following table: Source of Capital Book Value Market Value After-Tax Cost Long-Term Debt $4,000,000 $4,200,000 8% Preferred Stock $40,000 $56,000 13% Common Stock Equity $1,060,000 $4,282,000 18% Totals $5,100,000 $8,538,000 A. Calculate the weighted average cost of capital using book value weights. _____%?B. Caclulate the weighted average cost of capital using market value weights. _____%?C. Compare the answers obtained in parts a and b. Explain the differences.Given the information below. Find the Weighted Average Cost of Capital Market Value of Equity = $22,000,000; Debt = $15,000,000; Cash or Cash Equivalents = $15,000,000 iD = 0.10 or 10% iMKT = 0.17 or 17% tCorp = 0.30 or 30% bK = 1.5 IRF = 0.02 = 2%
- Capital structure of the ABC PJSC is as follows: Equity share capital market value $ 200 million, dividend $ 4 , market price per share $88, dividend growth 4%. Bond $ 300 million, Yield to maturity 4% , tax rate 20% Calculate weighted average cost of capital.General Talc Mines has compiled the following data regarding the market value and cost of the specific sources of capital. Source of Capital Before-Tax Cost Long-term debt 8% Common stock equity 19 Market price per share of common stock $50 (7,200 shares outstanding) Market value of long-term debt is $980 per bond (150 bonds issued at $1,000 par) Tax rate is 20%. What is the weighted average cost of capital using market value weights?Given the following information regarding Builtrite's capital structure, calculate its weighted average cost of capital assuming a 40% tax bracket. Type of Cost Debt (before tax) Preferred Stock Common Stock O 12.86% O 13.02% O 11.54% O 11.80 % Target% 35 15 50 Cost 9% 11% 16%
- What is the weighted-average cost of capital for SKYE Corporation given the following information? 1 million Equity shares outstanding. Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Interest rate on government bonds SKYE's equity beta Historical excess return on stocks Tax rate Note: Enter your answer to 1 decimal place. Weighted-average cost of capital % $ 20 7.68% $11 million 98 3% 0.75 5.5% 45%Given the following information regarding Builtrite's capital structure, calculate its weighted average cost of capital assuming a 40% tax bracket. Type of Cost Debt (before tax) Preferred Stock Common Stock O 12.82% 12.97% O 11.50% 11.76% Target N 40 30 50 Cost 10% 11% 16 %A company has determined that its optimal capital structure consists of 34 percent debt and the rest is equity. Given the following information, calculate the firm's weighted average cost of capital. Rd = 7.8%; Tax rate = 28 %: Po = $ 39.01; Growth = 5.1%; and D1 = $ 1.02. Show your answer to the nearest .1% Your Answer: Answer
- Bogy Enterprises is an all-equity firm with a weighted average cost of capital of 10.25 percent. The current market value of the equity is $32.8 million, and the tax rate is 30 percent. What is EBIT? a. $2,145,066.35 b. $3,425,714.97 c. $5,228,571.18 d. $6,790,110.53 e. $ 48,02,857.14What is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt. Interest rate on government bonds SKYE's equity beta Historical excess return on stocks Tax rate Note: Enter your answer to 1 decimal place. Weighted-average cost of capital % 1 million. $ 35 7.68% $14 million 9% 7% 0.75 7.0% 40%What is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding 1 million Stock price per share $ 35 Yield to maturity on debt 7.68% Book value of interest-bearing debt $14 million Coupon interest rate on debt 9% Interest rate on government bonds 7% SKYE’s equity beta 0.75 Historical excess return on stocks 7.0% Tax rate 40% Note: Enter your answer to 1 decimal place. Weighted-average cost of capital. %
