The Board of Grant Metal Inc has asked you to review its capital structure and determine ways to reduce the welghted average cost of capital. Looking at select data from the most recent financial statements shown in Exhibit B. your conclusions about the debt equity mix are Using the data in the Exhibit the WACC of the company is Select %. The formula for computing WACC using the company's structure is Select Exhibit B Current stock price shares outstanding tace value of debt outstanding recently quoted price on debt, as of par current yield to maturity on debt risk free rate stock beta market risk premium corporate tax rate $25.00 1.200.000 $4.000.000 98.00% 7.00% 2.50% 0.95 8.00% 21.00% 25 pts The Board of Grant Metal Inc has asked you to review its capital structure and determine ways to reduce the weighted average cost of capital. Looking at select data from the most recent financial statements shown in Exhibit B). your conclusion about the debt equity mix are Seinet Using the data in the Exhibit, the WACC of the company is Oratio is 0.813 DVE ratio is 0.133 DE ratio is 0.121 %. The formula for computing WACC using the company's structure is DVE ratio is 1.331 Select Exhibit B Current stock price # shares outstanding face value of debt outstanding recently quoted price on debt, as % of par current yield to maturity on debt risk free rate stock beta market risk premium corporate tax rate $25.00 1.200.000 $4,000,000 98.00% 7.00% 2.50% 0.95 8.00% 21.00% Question 6 2.5 pts The Board of Grant Metal Inc has asked you to review its capital structure and determine ways to reduce the weighted average cost of capital. Looking at select data from the most recent financial statements shown in Exhibit Bl. your conclusions about the debt equity mixare Select Using the data in the Exhibit the WACC of the company is Select %. The formula for computing WACC using the company's structure is cannot be computed 0.57 15.0 8.00 Exhibit B $25.00 1.200.000 $4,000,000 98.00% 7.00% Current stock price # shares outstanding face value of debt outstanding recently quoted price on debt, as % of par current yield to maturity on debt risk free rate stock beta market risk premium Icorporate tax rate 2.50% 0.95 8.00% 21.00% Question 6 25 pts The Board of Grant Metal Inc has asked you to review its capital structure and determine ways to reduce the weighted average cost of capital. Looking at select data from the most recent financial statements shown in Exhibit B. your conclusions about the debt equity mix are Select Using the data in the Exhibit the WACC of the company is I Select %. The formula for computing WACC using the company's structure is Select WACC Weight of Debtpre tax cost of debt weight of equity. Cost of equity Weight of debt cost of equity weight of equity cost of debt-11-tax rate) weight of debt pre tax cost of debt 11 - tax rate + weight of equity cost of equity weight of preferred cost of preferred weight of equity cost of equity Current stock price 525.00 # shares outstanding 1.200.000 face value of debt outstanding $4,000,000 recently quoted price on debt as % of par 98.00% current yield to maturity on debt 7.00% risk free rate 2.50% stock beta 0.95 market risk premium 8.00%
