Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

answers for all please!! options for first question 0.76% 0.65% 0.91% 0.99% second question 11.44% 8.43% 13.85% 12.04% Third question 12.14% 9.38% 13.25% 11.04% Numbull

answers for all
please!! image text in transcribed
image text in transcribed
image text in transcribed
options for first question
0.76%
0.65%
0.91%
0.99%
second question
11.44%
8.43%
13.85%
12.04%
Third question
12.14%
9.38%
13.25%
11.04%
Numbull Co, has a target capital structure of 58% debt, 6% preferred stock, and 36% common equity. It has a before-tax cost of debt of 11.14, an its cost of preferred otock is 12:2%. If Tumbull can raise all of its equity capital from retained earnings, its cost of common equity will be 14.746. Howevec, if it is nacessary to raise hew common equity, it will carry a cost of 16.6%. If its current tax rate is 25W, hoy much higher will Turnbull's weighted average cost of capital (WACC) be if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained earnings? (Rote: Round your intermediate calculations fo two decimal places.) 0.76sin 0.65 hin 0,91% 0.9946 Turnbull Co, is considering a project that requires an initial investment of $570,000. The firm will raise the $570,000 in capital by issuing $230,000 of debt at a before-tax cost of 11.1%,$20,000 of preferred stock at a cost of 12.250, and 5320,000 of equity at a cost of 14.7%, The firm faces a tax rate of 259 . What will be the WACC for this project? (Note: Round your intermediate calculations to three decimal places.) stock, and 63\% common equity. Kuhn has noncaliable bonds outstanding that mature in 15 years with a face value of si, ooo, an annual coupon rate of 1175 , and a market price of s1555.31. The yield on the company'a current bonds is a good approximation of the yleld on any new bonds that it issues. The company can seli shares of preferred stock that pay an annual dividend of s8 at a price of 595.70 per share. Kuhn dees not have any retained earnings avallable to ficance this praject, so the firm will have to issue new cammon atock to halp fund it. Its common stock is currently selling for 522.35 per share, and it is expected to pay a dividend of st. 36 at the end of neut year, Flotation costs will represent. 3 th of the funds ralied by issuing new common stock. The compary is projected to grow at a constant rate of 0 . yab, and they face a tax rate of 25%. What will be the WACC for this project? (Note: Round your intermediate calculations to two decimal pisces.)

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

Investments

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

8th Edition

0077261453, 978-0077261450

More Books

Students also viewed these Finance questions

Question

How did the plague contribute to the Renaissance?

Answered: 1 week ago