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their is no devidend rate in the question Mersaco has a Capital Structure of 40% Debt and 60% Equity, and has provided you with the
their is no devidend rate in the question
Mersaco has a Capital Structure of 40% Debt and 60% Equity, and has provided you with the following information: YTM (rd) Risk Free Rate (rf) Market Risk Premium (MRP) Cost Of Equity,rs(current) Tax Rate EPS(current) 10% 3% 6% 12% 40% $4 1. What is the Company's stock price at the current debt ratio 40%?* O $10 $32.78 O $33.33 O $23 O None of the above 2. What is the Current Beta of the company's common stock at the current debt ratio 40%?* 02.15 O 5.12 O 1.50 O 1.20 O None of the above 3. What would be the Beta of the stock if the company had no debt in its capital structure, that's what is Bu?* O 0.7895 01.0714 O 1.25 O Zero O None of the above 4. If the company changes its capital structure to 50% debt and 50 % equity, YTM (rd) would rise to 11% keeping the same Tax rate. In this case, what would be the company's new Beta, that's what is BL new?* O 1.71424 O 1.25055 O 1.15842 O 1.00000 O None of the above 5. What would be the Company's new cost of equity,rs(new) at debt ratio 50%?* O 15.028% O 13.285% O 12.102% O 11.375% O None of the above 6. What would be the Company's new Weighted Average Cost of Capital (WACC) at debt ratio 50%?* O 12.14% O 10.55% O 9.94% 0 5.50% None of the above 7. If the Company changes its capital structure to 50% debt and 50 % equity, its EPS would rise to $4.75. In this case, the company's new stock price will: * O Increase by $0.75 Decrease by $0.75 O Increase by $2.4246 O Decrease by $1.3545 O None of the above Step by Step Solution
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