Given the following information: Percent of capital structure: Debt 30% Preferred stock 15 Common equity (retained earnings) 55 Additional information: Bond coupon rate 16% Bond yield to maturity 14% Dividend, expected common $ 7.00 Dividend, preferred $ 14.00 Price, common $70.00 Price, preferred $ 124.00 Flotation cost, preferred $ 5.80 Growth rate 10% Corporate tax rate 35% Calculate the Hamilton Corporation's weighted cost of each source of capital and the weighted average cost of capital.

Given the following information: Percent of capital structure: Debt 30% Preferred stock 15 Common equity (retained earnings) 55 Additional information: Bond coupon rate 16% Bond yield to maturity 14% Dividend, expected common $ 7.00 Dividend, preferred $ 14.00 Price, common $70.00 Price, preferred $ 124.00 Flotation cost, preferred $ 5.80 Growth rate 10% Corporate tax rate 35% Calculate the Hamilton Corporation's weighted cost of each source of capital and the weighted average cost of capital.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section9.8: The Weighted Average Cost Of Capital (wacc)

Problem 3ST

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Given the following information: Percent of capital structure: Debt Preferred stock Common equity (retained earnings) Additional information: Bond coupon rate Bond yield to maturity Dividend, expected common Dividend, preferred Price, common Price, preferred Flotation cost, preferred Growth rate Corporate tax rate 40% 20 40 12% 10% $ 6.00 $ 13.00 $ 65.00 $ 122,00 $ 4.00 9% 30% Calculate the Hamilton Corporation's weighted cost of each source of capital and the weighted average cost of capital. Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.
What is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding 1 million Stock price per share $ 35 Yield to maturity on debt 7.68% Book value of interest-bearing debt $14 million Coupon interest rate on debt 9% Interest rate on government bonds 7% SKYE’s equity beta 0.75 Historical excess return on stocks 7.0% Tax rate 40% Note: Enter your answer to 1 decimal place. Weighted-average cost of capital. %
What is the weighted average cost of capital for SKYE Corporation given the following information? Equity shares outstanding 1 million Stock price per share $ 23 Yield to maturity on debt 7.68% Book value of interest - bearing debt $14 million Coupon interest rate on debt 9% Interest rate on government bonds 7% SKYE's equity beta 0.75 Historical excess return on stocks 5.8% Tax rate 40% Note: Enter your answer to 1 decimal place.
Given the following information, calculate the weighted average cost of capital for Digital Processing Inc. Percent of capital structure: Preferred stock 20% Common equity 40 Debt 40 Additional information: Corporate tax rate 25% Dividend, preferred $8.50 Dividend, expected common $2.50 Dividend, preferred $105.00 Growth rate 7% Bond yield 9.5 Flotation cost, preferred $3.60 Price, common $75.00 You are required to calculate: 1.Cost of debt (after tax) ? 2 .Cost of preferred stock ? 3.Cost of common equity ? 4.WACC ?
Given the following information: Percent of capital structure: Debt Preferred stock Common equity (retained earnings) Additional information: Bond coupon rate Bond yield to maturity Dividend, expected common Dividend, preferred Price, common Price, preferred Flotation cost, preferred Growth rate Corporate tax rate 13% 11% Debt Preferred stock Common equity (retained earnings) Weighted average cost of capital $ 7.00 $ 14.00 $ 70.00 $110.00 $ 2.50 30% 10% 5 85 Calculate the Hamilton Corp's weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Weighted Cost %
What is the weighted-average cost of capital for SKYE Corporation given the following information? 1 million Equity shares outstanding. Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Interest rate on government bonds SKYE's equity beta Historical excess return on stocks Tax rate Note: Enter your answer to 1 decimal place. Weighted-average cost of capital % $ 20 7.68% $11 million 98 3% 0.75 5.5% 45%
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Given the following information: Percent of capital structure: Preferred stock Common equity (retained earnings) Debt Additional information: 15% 45 40 Corporate tax rate 35% Dividend, preferred $ 10.00 Dividend, expected common $ 5.50 Price, preferred $ 98.00 Growth rate 10% Bond yield Flotation cost, preferred 11% $ 8.20 $ 77.00 Price, common Calculate the weighted average cost of capital for Digital Processing Incorporated Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. Debt Preferred stock Common equity (retained earnings) Weighted average cost of capital Weighted Cost 0.40% 0.15 0.45 1.00 %
What is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Interest rate on government bonds SKYE's equity beta Historical excess return on stocks Tax rate Note: Enter your answer to 1 decimal place. X Answer is complete but not entirely correct. Weighted-average cost of capital 11.6 × % 1 million $ 23 7.68% $14 million 9% 7% 0.75 5.8% 40%
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Given the following information, calculate the WACC. Capital Structure: Debt = 40% Pref Stock = 20% Common St = 40% Additional Information: Corporate Tax rate Preferred Dividend 25% $8.50 %3D Expected Common Dividend = $2.50 $105.00 Preferred Price= Growth Rate = 7% 9.5% Bond Yield = Preferred Floatation Cost = $3.60 $75.00 Common Stock Price=