Question
(((( I need the answer in Excel File with formula only I do not want the answer in Photo or word file . )))))) Chapter
(((( I need the answer in Excel File with formula only I do not want the answer in Photo or word file . ))))))
Chapter 8 Problem 20 Key facts and assumptions concerning Kroger Company, at December 12, 2007, appear below.Using this information, answer the questions following. Facts and Assumptions Yield to maturity on long-term government bonds 4.54% Yield to maturity on company long-term bonds 6.32% Coupon rate on company long-term bonds 7.50% Market price of risk, or risk premium 6.30% Estimated company equity beta 1.05 Stock price per share $25.97 Number of shares outstanding 681.2 million Book value of equity $4,965 million Book value of interest-bearing debt $6,674 million Tax rate 35.0%
a. Estimate Kroger's cost of equity capital.
b. Estimate Kroger's weighted-average cost of capital.Prepare a spreadsheet or table showing the relevant variables.
Chapter 8 Problem 20 Key facts and assumptions concerning Kroger Company, at December 12, 2007, appear below. Using this information, answer the questions following. Facts and Assumptions Yield to maturity on long-term government bon Yield to maturity on company long-term bonds Coupon rate on company long-term bonds Market price of risk, or risk premium Estimated company equity beta Stock price per share $ Number of shares outstanding Book value of equity $ Book value of interest-bearing debt $ Tax rate 4.54% 6.32% 7.50% 6.30% 1.05 25.97 681.2 million 4,965 million 6,674 million 35.0% a. Estimate Kroger's cost of equity capital. b. Estimate Kroger's weighted-average cost of capital. Prepare a spreadsheet or table showing the relevant variables. Chapter 8 Problem 21 Information regarding Kroger Company, and four industry competitors is shown below, on December 12, 2007. Company Kroger Company Safeway Inc. Supervalu Inc. Whole Foods Markets Winn Dixie Stores Inc. a. b. Equity beta 1.05 0.49 1.17 1.16 2.56 InterestBearing Market Debt value equity $ 6,674.0 $ 17,690.8 5,897.9 15,236.3 8,936.0 8,054.3 760.9 5,762.1 160.1 916.8 . Estimate the industry asset beta, weighting each company by its proportion of total market value of equity. Relever the industry asset beta to reflect Kroger's capital structure, and to make another (industry-informed) estimate of Kroger's equity betaStep by Step Solution
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