1. The common stock and debt of iOS Corp. are valued at $60 million and $21 million, respectively. Investors currently require a 12% return on the common stock and a 5% return on the debt. There are no taxes. Calculate the weighted average cost of capital. Enter your answer as a percentage rounded to two decimal places.
2. The common stock and debt of iOS Corp. are valued at $72 million and $36 million, respectively. Investors currently require a 11% return on the common stock and an 6% return on the debt. There are no taxes. Calculate the weighted average cost of capital. Enter your answer as a percentage. Enter your answer rounded to 2 DECIMAL PLACES.
3. A firm currently has a debt-equity ratio of 0.7. The debt, which is virtually risk-less, pays an interest rate of 4 %. The expected rate of return on the equity is 11 %. What is the Weighted-Average Cost of Capital if the firm pays no taxes?Enter your answer as a percentage rounded to two decimal places.
4. Mitra Corporation is currently all equity financed and has a value of $65 million.Investors currently require a return of 19.6 percent on common stock.Mitra has a marginal tax rate of 15 percent.Mitra plans to issue $20 millionof debt with a return of 5.9 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 rounded to two decimal places.
5. Jellybean Co. expects EBIT of $200,000 every year forever. Jellybean Co. currently has no debt and its cost of equity is 19%. The firm can borrow at 9%. The corporate tax rate is 20%. What is the value of the firm?Enter your answer rounded to two decimal places.