Analyze the cost of capital situations of the following company cases, and answer the specif qoestions that finance prolessionals neet to afidress. Consider the case of Turnhull Co. cost of preferred stock is 12.2%, common nquity it wier carry a cost of 16.0%. . 0.95% 0,91% 0.7606 1000% 0.76% 0.99% Tumbul Co. is consideng a project that requires an initial investment of $1,708,000. The firm wil raise the $1,708,000 in cagitat by istang $750,000 af debt at a before tax cost of 9.6%,$78,000 of preferred stock at a cost of 10.7%, and $880,000 of equity at a cost of 13.5%. The firm faces a tax iaie of 40%. What wil be the WACC for this project? (Note: Do not round intermediate calculations.) Consider the case of Kuhn Co. Kubn Co, is considenng a new project that will re stock, and 36% common equity, Kuha has nonci 11%, and a market price of $1,555.38. The yeld The company can sell shares of preferred stock t 10.9798 al investment of $45 maloen. It has a target capital structure of 50% dehe, 6 s pieferied poutstanding that mature in 15 years with a face value of 51,000 , an annesal coupoa rate of hpanys current bonds is a good approximation of the yold on aby new bends inat it hasuen. annual dividend of $8 at a price of $95.70 per share. You can assiane that Jordan does net meur any flotation costs when issuing debt and preferred stock. Kuhn does not have any retained earnings avaiable to tinance this project, so the firm wal have to ssue new common stock to help fund it. Its common istock is currently seling for $33.35 per share, and it is expected to pay a divdend of $2.78 at the end of next year, flotation costs wit iepiesent 3$ of Determine what Kuhn Company's WACC wil be for thes project. Fumbul Co. is considering a project that requires an initial investiment of $1,708,000, The firm will faise the $1,708,000 in capatat by hising $750,000 of of 40%. What will be the WACC for this project? (Note: Do not round intermediate calculations.) Consider the case of Kuhn Co. Kuhn C0. is considering a new project that will require an initial investment of $45 milion. It has a target capital structure of 58% debt, 6% oreteried stock, and 36% common equity. Kuhn has noncallable bonds outstanding that mature in 15 years with a face value of $1,000, an annual coupon ratif at 11%, and a market price of $1,555,38. The yieldon the company's current bonds is a pood approximation of the yield on any new bonds that it issiles, The company can sell shares of preferred stock that pay an annual dividend of $8 at a price of $95.70 per share. You can assume that lordan does not incur any flotation costs when issuing debt and preferred stock. Kuhn does not have any retained earnings avalable to finance this project, so the firm will have to issue new common stock to help fund it its corninhen stock is currently selling for $33.35 per share, and it is expected to pay a dividend of $2.78 at the end of next yeat Flotation costs wilspresent 3% of the funds raised by issuing new common stock. The company is projected to grow at a constant rate of 8,7%, and they face a tax tate of 40%. Determine what Kuhn Company's WACC will be for this project. debt at a before-tax cost of 9.6%,$78,000 of preferred stock ot a cost of 10.7%, and $880,000 of equaty at a cost of 13.5%. The firm faces a tis nsto of 40%. What will be the WACC for this project? (Note: Do not round intermediate calculotions.) Consider the case of Kuhn Co. Kuhin Co. is considering a new project that will require an initial investment of $45 milion, It has a target capital structurn of S8\% debt, 6% preferred stock, and 36% common equity, Kuhn has noncallable bonds outstanding thot mature in 15 years with a face value of $1,000, an annual cuppon iste of 11%, and a market price of $1,555.38. The yieldon the company's current bonds is a good approximation of the yield on any hew bonds that it issies The company can sell shares of preferred stock that pary an ann 8.63% of $8 at a price of $95.70 per shate. Yau can assume that Jordan does abt incur any flotation costs when issuing debt and preferred stock. Kuhn does not have any retained earnings available to finance th stock is currently selling for $33.35 per shate, and it is expected the funds rased by issuing new common stock. The company is 9.49% o the firm wil have to issiae new common stack to help fund ie its carrition idend of $2.78 at the end of next yeac, Flotavion costs wil iepresent 3 of b. grow at a constant rate of 8.7%, and they face a tax rate of 40%. Determine what Kuhn Company's WACC will be for this project
