Business

FinanceQ&A LibraryPalencia Paints Corporation has a target capital structure of 45% debt and 55% common equity, with no preferred stock. Its before-tax cost of debt is 10%, and its marginal tax rate is 40%. The current stock price is Po = $23.00. The last dividend was Do = $3.50, and it is expected to grow at an 8% constant rate. What is its cost of common equity and its WACC? Do not round intermediate calculations. Round your answers to two decimal places. a. rs = % b. WACC = %Start your trial now! First week only $4.99!*arrow_forward*

Question

6) see picture

Tagged in

Business

Finance

Find answers to questions asked by students like you.

Q: The Taylor Mountain Uranium Company currently has annual cash revenues of $1.2 million and annual ca...

A: Potential investment Current investment potential investment-current investment Annual cash re...

Q: A bank offers the following interest rates on your deposit: (Draw the Cashflow) 10% per year, compou...

A: The effective annual rate (EAR) is the actual rate of interest after taking the compounding effect i...

Q: A lottery ticket costs £1. The following table shows the different prizes available together with th...

A: Given:

Q: 1. Suppose Glenn invested P10,000 for 5 years with simple annual interest of 10%. What is the future...

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any spec...

Q: Throughout the 1990s, the equity premium fell considerably especially in the USA. One conceivable re...

A: The stock price would drop and vice versa if the required return increases. That makes sense: if not...

Q: Q.What is the advantage of an ETF relative to open-end and closed-end investment company? ____ A) In...

A: ETF has quite advantages over open ended and closed ended investment company.

Q: Find the present value of $500 due in five years under each of the following conditions: a. 12 perce...

A: The question is asking about the present value of $ 500 due after 5 year at discount rate 12% but in...

Q: Bob uses 19481 to purchase a 10-year par-value bond (i.e. redeems at face-value). Coupons are paid o...

A: N (Time Period) = 10 Assuming Face Value of bond = 20,000 Coupon = 2%*Face Value = 2%*20,000 = 400 Y...

Q: 11) see picture

A: Formulas: Horizon value = FCF3(1+g)/r - g Market value = FCF/1+R + FCF2/(1+r)^2 + FCF3/(1+r)^3 + Hor...

Q: . For each of the following, compute the future value: Present Value Years Interest Rate ...

A: Given:

Q: An analyst wants to evaluate Portfolio X, consisting entirely of U.S. common stocks, using both the ...

A: The Treynor measure (T) relates the rate of return earned above the risk‑free rate to the portfoli...

Q: 4. Jackal promises to pay P1,000 at the end of 6 months in obtaining a loan from a banker who charge...

A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...

Q: A state lottery commission pays the winner of the “Million Dollar” lottery annual installments of $5...

A: In this case , to know how much winner will get , we have to use formula of future value of annuity ...

Q: Consider a bond with a coupon rate of 14% and coupons paid semiannually. The par value isS1000 and t...

A: Calculating present values using excel PV function

Q: Explain the concept of disruptive innovation, and critically assess using competitor, risk, and impa...

A: Disruptive innovation disrupts an existing market and value network, displacing products, establishe...

Q: Benefits of diversification. What is the expected return of investing in asset M alone?

A: Expected Return = (probability of boom*return on boom)+(probability of normal*return on normal)+(pro...

Q: tion will render the M&O cost lower at $0.5 million per year. At an interest rate of 12% per year an...

A: Lined ponds Construction costs =$11 million MO cost=$2.3 million per year interest rate =12% Peri...

Q: OLA#10.4 A company is evaluating the feasibility of investing in machinery to manufacture an automot...

A: Net present value = present value of future cashflow discounted at 7% Cashflow of year 1-7 =(8900 co...

Q: You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no sp...

A: Sum of Inflation premium and real interest rate is interest rate. Hence, the inflation premium is th...

Q: 5) see picture

A: Formula for stock value per share: Stock value per share = Market value of company/No of shares outs...

Q: Raj Shah, aged 36 years, is employed with a MNC. His wife Pooja, aged 34 years, is also working part...

A: a) Education planning helps in ensuring that funds are available for the expected children education...

Q: Cyclone Software Co. is trying to establish its optimal capital structure. Its current capital struc...

A: Given, Current capital structure = 25% debt and 75% equity Risk free rate = 5% Market risk premium =...

Q: Ahmad earned $475 last summer. He deposited this money in an account that pays an interest rate of 3...

A: Future value = Present value * (1+rate)^n Where, n = no. of compounding period i.e. 15

Q: Chelsea and Bill are buying a house on a 30-year mortgage. They can afford a $1200 per month mortga...

A: Using excel PV function, to calculate purchase price of a house

Q: Jessica’s annual salary decreased by $3800, which was a 9% decrease. What was Jessica’s original sa...

A: Original Salary = $ amount decreased in salary / % decrease

Q: A friend claims to have found a really great deal at a local loan agency without a street address: T...

A: Least monthly payment = Amount borrowed / (years * no. of payments )

Q: If a typical firm reports P20million of retained earnings on its balance sheet, could its directors ...

A: The dividend can be distributed from the profits earned by an entity during a year. An organization ...

Q: Ten $7,000 bonds redeemable at par bearing 10% coupons payable quarterly are sold seven years befor...

A: Bonds are the financial instruments that are bought or sold to raise funds at fixed interest for fix...

Q: The Jacob Chemical Company is considering building a new potassium sulfate plant. The following cash...

A: Period Cash outlay ($) Discount Factor @12% Net investment ($) 0 4,000,000 1 4,000,000 1 2,000,0...

Q: An inventor was offered the following alternatives as royalties for his invention:a. A single lump s...

A: Alternative 1 = Php 310,000

Q: Please solve all part

A: Since there are two possible values of asset that is $1190 AND $970.lets assume a portfolio where th...

Q: If above average returns during the late 90s were due to declining equity premiums, explain thoughtf...

A: Equity premium is the difference between stock returns and risk-free returns. It is the additional r...

Q: suppose you inherited 100000 and invsted it at 7% per year what's the most you can withdraw if the e...

A: Using Excel PMT function

Q: The Westchester Chamber of Commerce periodically sponsors public service seminars and programs. Curr...

A: Let the no. of. TV ads be X Let the no. of radio ads be Y and the no. of online ads be Z Total audi...

Q: You are analyzing two mutually exclusive projects with the cash flows shown below. The cash flows ar...

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If y...

Q: A corporate bond that you own at the beginning of the year is worth $975. During the year, it pays $...

A: The provided information are: Opening price = $975 Interest payment = $ 35 Closing price = $965

Q: OLA #10.2 Natalie was offered two options for a car he was purchasing: Lease option: Pay lease amo...

A: To decide whether to buy a property on cash or to lease it, the present worth of both the options is...

Q: Vincent Van Gogh sold only one painting during his lifetime, for about $30. A sunflower stilllife he...

A: Given information: Future value is $39.85 million Cash flow is $30 Number of years is 100 (1988-1888...

Q: Bartlett Company's target capital structure is 40% debt, 15% preferred, and 45% common equity. The a...

A: Weighted Average Cost of Capital : It is average cost of capital of all capital on the basis of weig...

Q: Jorsen Kithak wishes to analyze the two cases of annuity for 10-years, C and D. Annuity C is an ordi...

A: There are two types of annuity which are as follows: Ordinary annuity: It requires payment at the e...