Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) Finding WACC. Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7% favoured stock outstanding, and 175,000 of 8.2% semi-annual bonds outstanding, par value $1000 each. Common stock presently sells for $64 per share and has beta of 1.2, the favoured stock presently sells for= $108 per share, and bonds have= 15 yrs to maturity and sell for 96% of par. Market risk premium is 6.8%, T-bills are yielding 5.5%, and firm’s tax rate is 34%.

a) Determine the firm’s market value capital structure.

b) If firm is estimating a new investment project which has same risk as firm’s typical project, what rate must firm use to discount project’s cash flows?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915098

Have any Question? 


Related Questions in Basic Finance

An investor estimates that next years sales for gyna inc

An investor estimates that next year's sales for Gyna Inc should amount to about 56 USD million. The company has 3.7 million shares outstanding, generates a net profit margin of about 8% , and has a payout ratio of 45%.a ...

1 define the followinga a conditional sales contractb a

1. Define the following: a. A conditional sales contract b. A chattel mortgage 2. Under what conditions would a firm prefer the following: a. A "fixed-rate" term loan from a bank b. A "floating-rate" term loan, with the ...

Briefly describe each of the following funds transfer

Briefly describe each of the following funds transfer mechanisms: a. Depository transfer check (DTC) b. Automated clearinghouse (ACH) debit transfer c. Wire transfer Why are wire transfers typically used only for high-do ...

Choose an article that discusses the differences between

Choose an article that discusses the differences between book value, liquidation value, market value, and intrinsic value. Explain the three factors that determine the intrinsic, or economic, value of an asset. As an inv ...

If pawn shops charge high interest rates on loans why do

If pawn shops charge high interest rates on loans, why do people borrow money from them? Suppose Congress passes a law that puts a ceiling of 10% per year on the interest rate that pawn shops can charge on loans. Would t ...

The us treasury bill is yielding 185 percent and the market

The U.S. Treasury bill is yielding 1.85 percent and the market has an expected return of 7.48 percent. What is the Treynor ratio of a correctly-valued portfolio that has a beta of 1.33 and a variance of .0045? .056.069.0 ...

Assessment taskquestion 1 chapter 1 the asian financial

Assessment Task: Question 1: (chapter 1): The Asian financial crisis provided some valuable lessons about nation-state and global financial system. What are some of those lessons? List at least 3 reasons. Explain each of ...

1 what are social institutions what effects do social

1. What are social institutions? What effects do social institutions have on people? 2. Discuss the three most important influences of social institutions. Give some examples of each of the three forms of influence. 3. D ...

1 discuss how error accountability can be a major factor in

1. Discuss how error accountability can be a major factor in improving forecast performance. 2. Discuss how a minor change in demand at the retail level can significantly impact supply chain variation at distributors, ma ...

1 what are the primary differences between operating leases

1. What are the primary differences between operating leases and financial leases? 2. How does a leveraged lease differ from a nonleveraged financial lease? What type of firm or organization is most likely to take advant ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen