Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

i need help with this 2 question QUESTION 9 Bluegrass Mint Company has a debt-equity ratio of 0.35. The required return on the company's unlevered

i need help with this 2 question
image text in transcribed
QUESTION 9 Bluegrass Mint Company has a debt-equity ratio of 0.35. The required return on the company's unlevered equity is 14.6% and the pretex cost of the firm's debt is 68. Sales revenue for the company is expected to remain stable indelinkely at last year level of $21,867.7876. Variable costs amount to 57% of sales. The tax rate is 239 and the company distributes all its earnings as dividends at the end of each year Use the WACC to compute the value of the company NOTE: Enter the number rounding to four DECIMALS. If your decimal answer is 0.034576, your answer must be 0.0346, DO NOT USE the sin QUESTION 10 Bluegrass Mint Company has a debt equity of Ox7 The requved return on the company's revered equity is 14, and the pretax cost of the firms debts Sales revenue for the company is expected to remain table indefinitely at last years level of $19,592.615.7 Variable costs amount to 576 of sales. The tax rate is 39 and the company distributes all its earnings as dividends at the end of each year What would be the value of debt? HINT: Use the WACC to compute the value of the company and then determine the amount of debt NOTE: Enter the number rounding to four DECIMALS. If your decimal answer is 0.034576, your answer must be 0.0346. DO NOT USE the sun

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Intermediate Accounting

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

1st edition

978-0132162302

Students also viewed these Accounting questions