Question
44.) Ma, Inc. has a market value capital structure of 30% debt and 70% equity. The tax rate is 40%. The firms bonds currently trade
44.) Ma, Inc. has a market value capital structure of 30% debt and 70% equity. The tax rate is 40%. The firms bonds currently trade in the market for $1035.00. These bonds have a face value of $1,000, coupon rate of 8% paid semiannually, and 10 years remaining to maturity. The firms common stock trades for $20 per share. The firm has just paid a dividend of $2. Future dividends are expected to grow at 2% per year. Based on this information, Ma, Inc.s WACC is _____%.
45.) Cream and Crimson has a capital structure of 40% debt and 60% equity. The tax rate is 32%. The firms bonds currently trade in the market for $784. These face value $1,000 bonds have a coupon rate of 8%, paid semiannually, with 7 years to maturity. The firms common stock trades for $15 per share and the companys beta is 1.28. The risk-free rate (Rf) = 3.2% and the market risk premium (Rm Rf) = 8.1%. Given this information, Cream and Crimsons WACC is _____%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started