Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

$1.2 malon should be entered as $1200000. Round your answer to the nerarest dolac Do not round intemmetato cakulatons. Round your answer to two decinal

image text in transcribed
image text in transcribed
$1.2 malon should be entered as $1200000. Round your answer to the nerarest dolac Do not round intemmetato cakulatons. Round your answer to two decinal placens. Do not round intermediate calculations. 1. Is and the WACC wid decrease due to the flotation costs of new equity. 11. If will increase and the WACC will decrease due to the flotation costs of new equity. III. Ru wil decrease and the WACC wil incresse due to the forsencosts of new equity: IV. Is and the WACC wI not be affected by flotation costs of new equity. V. ro and the WACC wil inclease doe to the fotation costs of new equaty: WACC Equation \begin{tabular}{|r|} \hline \multicolumn{1}{|c|}{} \\ \hline \\ \hline$30,000,000 \\ \hline 30,000,000 \\ \hline$60,000,000 \\ \hline \\ \hline$20,000,000 \\ \hline 9.00% \\ \hline$30,00 \\ \hline 12.0096 \\ \hline 4.0096 \\ 80096 \\ \hline 30,00%6 \\ \hline \end{tabular} c D 16 in I I k Market value of dobl Market values of common equity Total market value 10 nim 78 \begin{tabular}{|c|c|} \hline A & \\ \hline \multicolumn{2}{|l|}{ WhCC: Equation } \\ \hline & \\ \hline Market value of dobt & $30,000,000 \\ \hline Market value of common equity & 30,000,000 \\ \hline Total market value: & $60,000,000 \\ \hline Now project investrinent & $20,000,000 \\ \hline Coupon rate of of par vatue bonds & 9.00% \\ \hline Price of common stock & $3000 \\ \hline Required return of common stock, in & 12.00% \\ \hline Dividend yield, D4/Pu0 & 40006 \\ \hline Constant growth rate, 9 & 800% \\ \hline Fax rate. & 30.00% \\ \hline & \\ \hline \begin{tabular}{l} Arrount of new investment finanoed \\ Whoc, assuming no new comrron \end{tabular} & \\ \hline \end{tabular} E f 4 8. 9 (1) 1 n 17

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management

Authors: P V V Satyanarayana

1st Edition

9350568012, 9789350568019

More Books

Students also viewed these Finance questions

Question

need help with 2 and 3 please , thank you

Answered: 1 week ago