Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

only last question pls Maynes Corporation is currently all equity financed and has a value of $70 milion require a return of 11.70 percent on

only last question pls
image text in transcribed
image text in transcribed
Maynes Corporation is currently all equity financed and has a value of $70 milion require a return of 11.70 percent on common stock. Maynes pays no taxes. Maynes plans to issue $45 million of debt with a return of 7.4 percent and use the proceeds to repurchase common stock. What will be the value of the firm after the debt issue? Please state your answer in millions. nin Enter your response below. 115 Correct response: 70million nmin til This question has 4 parts, so you will be clicking verify 4 times. IC Given that the firm will still have a value of $70 million, what will be the value of the equity after the debt issue? Please state your answer in millions. Enter your response below. 35 Correct response: 25million > Given that the value of the equity after the debt issue will be $25, what will be the expected return on the stock after the debt issue? Enter your answer as a percentage and round to 2 decimal places. Do not enter the percentage symbol. Enter your response below. 19.44 Correct response: 19.44+0.01 Given that the expected return on the stock after the debt issue is 19.44%, what will be the Weighted Average Cost of Capital after the debt issue? Enter your answer as a percentage and round to 2 decimal places. Do not enter the percentage symbol. Enter your response below. Number

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

Students also viewed these Accounting questions