Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please solve all QUESTION 12 Which of the following is NOT true regarding WACC? None of these If a company's capital structure is spl 50/50

Please solve all image text in transcribed
image text in transcribed
QUESTION 12 Which of the following is NOT true regarding WACC? None of these If a company's capital structure is spl 50/50 then the cost of equly is greater than the cost of debt The change in a company's target capital structure will impact the company's WACC The WACC is equal to the her tax cost of all the company's outstanding debts show on its balance sheet QUESTION 13 Marginal Tax Rate None of these The tax rate applicable to the neat dolor a person cama Percentage of a firms income that must be paid in taxes The amount of money that a company owes in taxes Taxes paid divided by total taccabile income QUESTION 14 Kennedy Corp is thinking of investing in a new location. The managers think that opening a new store will cost $25 (All of the numbers are in thousands) They expect to the following yearly profits: 525 in your 1 $3.7 in year 2.54.5 in year 3 and 560 in year 4. What is the IRR of this investment? 1400% 33 09% 978% 11.00% None of these QUESTIONS You were hired as a consultant to the Michaela Company, whose target capital structure is 45% debt 15% preferred, and 40% common equity. The after tax cost of debt is 11.00%, the cost of preferred is 13.00% and the cost of equity is 1500%. The firm will not be issuing any new stock. What is its WACC? 1290 2450 923 817 None of these QUESTION 16 Suppose that Hide Corpstock just paid a dividend of $100 and that the dividend is expected to grow at a rate of 3%. The company's current beta is 132, the current risk free rate is 2.5% and the market risk premium is 6% What is the intrinsic value of this stock? 10:42 1384 1254 3715 13.88

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

More Books

Students also viewed these Finance questions

Question

3. Identify opportunities to improve this process.

Answered: 1 week ago