T.J. Enterprises is trying to determine the weights to be used in estimating their cost of capital.
Question:
T.J. Enterprises is trying to determine the weights to be used in estimating their cost of capital. The firm’s current balance sheet and market information regarding the price and number of securities outstanding are listed below.
Calculate the firm’s capital component weights using book values as well as marketvalues.
Transcribed Image Text:
TJ Enterprises Balance Sheet (in thousands) S50,000 S60,000 S0 S48,000 $15,000 Current Assets Current Liabilities Long-Term Assets Long-Term Liabilities Bonds Payable Owner's Equity Preferred Stock Common Stock S47,000 Total Assets $110,000 Total L & OE $110,000 Market Information Debt 48.000 $850 Preferred Stock Common Stock 1,300,000 Outstanding Market Price 102,000 S95.40 S40
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 61% (13 reviews)
Based on book values Weight of Debt 48000110000 4364 Weight of PS 1500011...View the full answer
Answered By
Aysha Ali
my name is ayesha ali. i have done my matriculation in science topics with a+ . then i got admission in the field of computer science and technology in punjab college, lahore. i have passed my final examination of college with a+ also. after that, i got admission in the biggest university of pakistan which is university of the punjab. i am studying business and information technology in my university. i always stand first in my class. i am very brilliant client. my experts always appreciate my work. my projects are very popular in my university because i always complete my work with extreme devotion. i have a great knowledge about all major science topics. science topics always remain my favorite topics. i am also a home expert. i teach many clients at my home ranging from pre-school level to university level. my clients always show excellent result. i am expert in writing essays, reports, speeches, researches and all type of projects. i also have a vast knowledge about business, marketing, cost accounting and finance. i am also expert in making presentations on powerpoint and microsoft word. if you need any sort of help in any topic, please dont hesitate to consult with me. i will provide you the best work at a very reasonable price. i am quality oriented and i have 5 year experience in the following field.
matriculation in science topics; inter in computer science; bachelors in business and information technology
_embed src=http://www.clocklink.com/clocks/0018-orange.swf?timezone=usa_albany& width=200 height=200 wmode=transparent type=application/x-shockwave-flash_
4.40+
11+ Reviews
14+ Question Solved
Related Book For
Question Posted:
Students also viewed these Finance questions
-
The CFO of DMI is trying to determine the companys WACC. Brad, a promising MBA, says that the company should use book value to assign the components percentage for the WACC. Angela, a long-time...
-
The Avalon Floor Cleaner Company is trying to determine the number of salespeople it should allocate to its three regionsthe East, the Midwest, and the West. The company has 100 salespeople that it...
-
The controller for Eastwood Co. is trying to determine the amount of cash to report on the December 31, 2014 statement of financial position. The following information is provided: 1. A commercial...
-
Imagine you are a member of your local school board. You wantan answer to the very simple question, Are students learning?What can you recommend to school principals to answer thequestion?
-
Body temperature oscillates between high values during the day and low values at night. Draw graphs based on the above descriptions.
-
The method where you should place drawing code for Swing objects is ______________. a. CallPaint() b. Paint() c. RequestPaint() d. PaintComponent()
-
6. List the five types of governmental funds. What are the primary distinctions among them?
-
Phil Jackson, after winning his tenth NBA title as a coach, said: I dont motivate my players. You cannot motivate someone. All you can do is provide a motivating environment and the players will...
-
Please provide the correct answers
-
Question 1. A geometry is given by the line element ds 2 = e 2y dx 2 + e 4x dy 2 . The curve C 1 , parametrized by , is defined by: x() = , y() = 2. Compute the length of C 1 between = 1 and = 4. A...
-
R.K. Boats Inc. is in the process of making some major investments for growth and is interested in calculating their cost of equity so as to be able to correctly estimate their adjusted WACC. The...
-
New Ideas Inc. currently has 30,000 of its 9% semi-annual coupon bonds outstanding (Par value =1000). The bonds will mature in 15 years and are currently priced at $1,340 per bond. The firm also has...
-
List five factors that distinguish an independent contractor and five factors indicating that an individual is an employee.
-
1. What are the threats being faced by Indian General Insurance Ltd. (IGIL)? 2. What are its traditional strengths? What 'business definitions' should it follow while capitalizing on its traditional...
-
You go to discuss the incident and the client's claims with your supervisor. As you retell the incident, it is clear that your supervisor is not comfortable. You ask your supervisor for advice on the...
-
Case Study Two: Rawlings Rawlings is an American sports equipment manufacturing company based in Town and Country, Missouri, and founded in 1887. Rawings specializes in baseball equipment and...
-
The discussion is for Administrating organizational change course. (we should write 300 words) Discussion question is: Refer to table 6.4 in your book. Think of a time when you were introduced to...
-
Content: Identify at least two resources for each of the four critical sections in the course project: Strategic Planning, Healthcare Reimbursement, Revenue Cycle Process, and Reimbursement...
-
George and Margaret Wealthy are in the 48 percent tax bracket, considering both federal and state personal taxes. Norman Briggs, the CEO of Community General Hospital, has been aggressively pursuing...
-
Suppose that a flow network G = (V, E) violates the assumption that the network contains a path s t for all vertices V. Let u be a vertex for which there is no path s u t. Show that there must...
-
Tyler Oil Corporation estimates the following costs to acquire, drill, and complete a well on Lease A: REQUIRED: Would the investment be profitable if proved reserves are: a. 12,000 bbl? b. 18,000...
-
What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually? Discuss.
-
Your parents will retire in 18 years. They currently have $250,000, and they think they will need $1,000,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they...
-
Your parents will retire in 18 years. They currently have $250,000, and they think they will need $1,000,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they...
-
I need help finding the callable price and call value
-
On 31 October 2022, the owner took goods for his son as a birthday gift. The cost price of the goods was R15 000
-
Provide a graph chart or data with sample numbers indicating Valuing Stocks and Bonds?
Study smarter with the SolutionInn App