Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer all questions. #4 Caspian Sea Drinks' is financed with 64.00% equity and the remainder in debt. They have 11.00- year, semi-annual pay, 5.29%

Please answer all questions.

image text in transcribed

image text in transcribed

#4 Caspian Sea Drinks' is financed with 64.00% equity and the remainder in debt. They have 11.00- year, semi-annual pay, 5.29% coupon bonds which sell for 97.17% of par. Their stock currently has a market value of $25.55 and Mr. Bensen believes the market estimates that dividends will grow at 3.70% forever. Next year's dividend is projected to be $2.87. Assuming a marginal tax rate of 26.00%, what is their WACC (weighted average cost of capital)? Submit unanswered not_submitted Attempts Remaining: Infinity Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) #2 Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube Goldberg Machines. This new equipment, the RGM-7000, will allow Caspian Sea Drinks to expand production. It will cost $12.00 million fully installed and will be fully depreciated over a 15 year life, then removed for no cost. The RGM-7000 will result in additional revenues of $2.75 million per year and increased operating costs of $618,383.00 per year. Caspian Sea Drinks' marginal tax rate is 22.00%. The internal rate of return for the RGM-7000 is unanswered not_submitted Attempts Remaining: Infinity Submit Answer format: Percentage Round to: 4 decimal places (Example: 9.2434%, % sign required. Will accept decimal format rounded to 6 decimal places (ex: 0.092434))

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

Public Finance Lessons From The Past And Effects On The Future

Authors: Miguel-Angel Galindo Martin

1st Edition

1629481491, 978-1629481494

More Books

Students also viewed these Finance questions

Question

Identify the universal properties of all languages.

Answered: 1 week ago

Question

Write a Python program to check an input number is prime or not.

Answered: 1 week ago