Activity: WACC Estimation Excel Online Structured Activity: WACC Estimation On January 1, the total market value of the Tyssland Company was 560 million. During the year, the company plans to raise and invest $15 million in new projects. The tim's present market value capital structure, shown below, is considered to be optimal. Assume that there is no short-term debt. Debt $30,000,000 Common equity 30,000,000 Total capital $60,000,000 New bonds will have an 7% coupon rate, and they will be sold at par. Common stock is currently selling at $30 a share. The stockholders' required rate of returns estimated to be 12%, consisting of a dividend yield of 4% and an expected constant growth rate of the next expected dividend is $1.20, o $1.20/530-0) The marginal corporate tax rate is 30% The data has been collected in the Microsoft Excel Online Me helow. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet a. In order to maintain the present capital structure, how much of the new investment must be financed by common county Enter your answer in dollars. For example, $1.2 million should be entered as 51200000. Round your answer to the nearest dollar. Do not found intermediate calculations, s 3. Assuming there is sufficient cash flow such that Tysseland to maintain its target capital seructure without issuing additional shares of equity, wat in its wace? Round your answer to two decimal places. Do not round intermediate calculations Sucose now that there is not enough internal cash flow and the firm must ise new shares of stock Outwelv sneakina, what will haben to the WACC) a. In order to maintain the present capital structure, how much of the new investment must be financed by common equity? Enter your answer in dollars. For example, $1.2 million should be entered as 51200000. Round your answer to the near t dollar. Do not found intermediate calculations $ b. Assuming there is sufficient cash flow such that Tysseland can maintain its target capital structure without issuing additional shares of equity, what is its WACC? Round your answer to two decimal places. Do not round intermediate calculations. Suppose now that there is not enough internal cash flow and the firm must issue new shares of stock. Qualitatively speaking, what will happen to the WACC? 1. To will decrease and the WACC will increase due to the flotation costs of new equity. 11., and the WACC will not be affected by flotation costs of new equity III. and the WACC will increase due to the flotation costs of new equity IV. 1, and the WACC will decrease due to the flotation costs of new equity V., will increase and the WACC will decrease due to the flotation costs of new equity. Check My Work Reset Problem Net Black 2595 3:43 12/4/2 74F Sunny o IL
