XYZ Corp. has bonds outstanding with a coupon rate of 2% and a YTM of 5.7%. The risk - free rate of return is 2.2% and the market is returning 10.0%. The stock has a beta of 0.9 and the firm is financed with 45% debt and 55% equity. If the tax rate is 24%, what is XYZ's WACC?

Q: A company's equity has a beta of 1.3 and a total value of £200m. The risk free rate is 9% and the…

A: The Weighted Average Cost of Capital (WACC) is a financial metric that represents the average cost a…

Q: a. Suppose Hardmon borrows to the point that its debt-equity ratio is 0.50. With this amount of…

A: HARDMON ENTERPRISESa)Expected Return18%Debt to Equity Ratio0.5Debt Cost of Capital5%Formula Expected…

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: Corcovado Pharmaceuticals. Corcovado Pharmaceutical's cost of debt is 7.40%. The risk-free rate of…

A: Weighted average cost of capital (WACC) is the average cost of capital which can be calculated by…

Q: Harmony Sego has a tax rate of 21%, the interest rate on debt is 10%, and the WACC is 15%. If the…

A: WACC:  "Weighted average cost of capital" represents the cost of capital from all of the sources of…

Q: Nodebt, Inc., is a firm with all-equity financing. Its equity beta is .8. The Treasury bill rate is…

A: WACC means weighted average cost of capital. it includes the cost of equity and cost of debt , cost…

Q: Your firm has a target debt ratio of 30%. Cost of debt (RB) is 6%. The risk-free rate is 3% and the…

A: Target debt ratio = 30% Cost of debt = 6% Risk free rate = 3% Expected market risk premium = 6%…

Q: Corcovado Pharmaceuticals. Corcovado Pharmaceutical's cost of debt is 7.30%. The risk-free rate of…

A: WACC is an important financial measure that represents the overall cost of financing for a company,…

Q: Swallow Industries has a beta of 1.60, a stock price of $17, and recently paid an annual dividend of…

A: The objective of the question is to calculate the cost of equity capital for Swallow Industries…

Q: Currently the S&P is returning 12% while Treasury bills are returning 4%. The MRP is estimated to be…

A: The provided information are: Risk free rate= 4% Market return= 12% Beta= 1.4

Q: The risk free rate of return is 1.5% and the market risk premium is 6%. Rogue Transport has a beta…

A: CAPM is a Capital Asset Pricing Model.. This is a financial tool that is used to determine the…

Q: please show steps 5.30% annual cou market risk premiu risk as the compar to earn on the pro

A: Debt equity ratio2/3Coupon rate5.30%Beta1.98T-bill returns1.50%Market risk premium8.80%Tax rate40%

Q: A firm has 17M in debt and 83M in equity. It's cost of debt is 3.8% , tax rate 23% and beta of 1.8.…

A: WACC decrease by 2.06% Note: % are rounded off to two decimals.Explanation:

Q: Suppose the risk-free rate is 2.67% and an analyst assumes a market risk premium of 6.91%. Firm A…

A: Risk free rate (Rf) = 2.67% Market Risk Premium(Rm-Rf) = 6.91% Beta = 1.45 Therefore as Capital…

Q: Thunderhorse Oil is a U.S. oil company. Its current cost of debt is 7.40%, and the 10-year U.S.…

A: An entity has multiple options from where it can raise funds. Debt and equity are the major sources.…

Q: Excellent Enterprises has an unlevered beta of 1.2. Excellent is financed with 50% debt and has a…

A: The risk premium is the additional amount of returns provided to the investors in order to draw them…

Q: Rolex, Inc. has equity with a market value of $20 million and debt with a market value of $10…

A: Information about the sources of capital and cost of sources of capital has been provided for a…

Q: onsider a firm whose debt has a market value of $35 million and whose stock has a market value of…

A: given, debt = $35 million  Equity = $55 million rd×1-t=5.53%re=13.915%

Q: Sim Software Co trying to estimate its optimal capital structure. Right now, Simon has a capital…

A: Approach to solving the question: Detailed explanation: To determine the unlevered cost of equity,…

Q: Intuit Inc. (INTU) has a capital structure of 38% debt and 62% equity. The expected return on the…

A: The discount rate is the cost of capital of the company. It is the weighted average cost of using…

Q: What is its WACC after issuing debt? [give your answer in %, with two decimal points precision]

A: First we need to determine the value of the firm with debt and then compute the weight of debt and…

Q: The risk-free rate of return is 6.5%, the expected rate of return on the market portfolio is 13.5%,…

A: 1)Intrinsic value 99.412)Expected 1-year holding-period return-0.59%Explanation:Step 1:We have to…

Q: What will be the expected return of equity after this transaction?

A: Information Provided: Expected Return = 16% Debt-Equity Ratio = 0.50 Cost of capital = 6%

Q: The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its…

A: Yield on debt can be calculated by using this equation Yield on debt =Coupon debtDebt valuen -1

Q: An all equity financed company currently has a beta of 1.2 and a marginal tax rate of 20%. The…

A: 1. Calculate the after-tax cost of debt: Since the company's before-tax cost of debt is 5% and the…

Q: Consider a firm whose debt has a market value of $35 million and whose stock has a market value of…

A: According to the rule, because you have posted multiple questions, we will answer the first question…

Q: Suppose SnowWhite's common stock has a beta of 1.37, the risk-free rate is 3.4 percent, and the…

A: The objective of this question is to calculate the Weighted Average Cost of Capital (WACC) for…

Q: entworth Industries is 100 percent equity financed. Its current beta is 1.1. The expected market…

A: WACC is weighted cost of equity and weighted cost of after tax cost of debt. This is cost of capital…

Q: A firm just paid its annual dividend of $5.50 per share. The stock market price of $58.25 and a beta…

A: CAPM stands for capital asset pricing model.This model explains the relationship between systematic…

Q: Kestrel, Inc. has an equity market capitalization of $6,500,000. Its equity beta is 2.4. The…

A: Value of Equity = e = $6,500,000Beta = b = 2.4Risk free rate = rf = 1.4%Market Return = rm =…

Q: Your firm has a WACC of 16.25%. The cost of equity is 20% and the firm's bonds yield 7.9%. The tax…

A: Debt equity ratio refers to the financial percentage where the ratio defines the amount of debt…

Q: MM Ferguson's market value of common stock is $35.4 million, and its risk-free debt is $13.1 million…

A: WACC is also known as Weighted Average Cost of Capital. It includes the cost of debt & cost of…

Q: Canon Corporation. has a market value of its debts of $350 millions with 8% cost of debt. Currently,…

A: 1. According to Capital Asset pricing model ,ke = Rf + ( Rm - Rf)where ,ke = cost of equityRf =…

Q: ABC, Inc. has equity beta of 1.75 with total assets financed with 80% of equity. The expected excess…

A: Given: Risk free rate of return =3%Beta of the stock =1.75Market risk premium=7%

Q: Assume that you are on the financial staff of Davis Enterprises, and you have collected the…

A: As per the Capital Assets Pricing Model(CAPM),>Cost of equity = Risk free rate +[Beta x Market…

Q: A company has a target debt-to-equity ratio 2/3. The firm has no preferred stock. The firm's bonds…

A: WACC or Weighted Avg. Cost is average total cost incurred by an entity to finance its capital…

Q: MacG, Inc. has an equity market capitalization of $7,800,000. Its equity beta is 4.2. The risk-free…

A: Here, Equity Beta is 4.2 Risk Free Rate is 1.4% Market Return is 7.2% YTM is 5.4% Tax Rate is 14%…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.