Problemphils carvings inc wants to have a weighted average, Ask an Expert

Finance

Problem:

Phil's Carvings, Inc. wants to have a weighted average cost of capital of 6.5 percent. The firm has an aftertax cost of debt of 4.4 percent and a cost of equity of 8.8 percent.

Required:

Question: What debt-equity ratio is needed for the firm to achieve their targeted weighted average cost of capital?

A) 2.10

B) 1.10

C) 0.91

D) 0.55

E) 1.91

Note: Please show how you came up with the solution.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162020

Have any Question?Write your Review or question?

Related Questions in Basic Finance

You plan to buy the house of your dreams in 12 years you

You plan to buy the house of your dreams in 12 years. You have estimated that the price of the house will be $78,423 at that time. You are able to make equal deposits every month at the end of the month into a savings ac ...

Question - discuss common stock valuation and the required

Question - Discuss common stock valuation and the required assumption(s) for zero growth. Relate this discussion to a real-world problem.

A firm is considering a project that has the following

A firm is considering a project that has the following estimated cashflows: Increased sales to business of $100,000 for the next six years (starting in one year's time) Increased costs of $30,000 for the next six years ( ...

Please provide formula and detailed explanationyou have

Please provide formula and detailed explanation You have accumulated some money for your retirement. You are going to withdraw $59,758 every year at the beginning of the year for the next 18 years starting from today. Ho ...

A firm has a profit margin of 39 percent a capital

A firm has a profit margin of 3.9 percent, a capital intensity ratio of 1.5, and a debt-equity ratio of .7. What is the firm's ROE? Can someone help me understand how to solve this?

Louise mcintyres monthly gross income is 3600 her employer

Louise McIntyre's monthly gross income is $3,600. Her employer withholds $760 in federal, state, and local income taxes and $310 in Social Security taxes per month. Louise contributes $160 each month for her IRA. Her mon ...

Please show all workkanab co and zion co are us companies

Please Show All Work Kanab Co. and Zion Co. are U.S. companies that engage in much business within the U.S. and are about the same size. They both conduct some international business as well. Kanab Co. has a subsidiary i ...

Charles is considering investing in treasury bills he

Charles is considering investing in Treasury bills. He requires a 2.7 percent annualized return on a six-month Treasury bill that has a par value of $10,000. The price Charles would be willing to pay for this T-bill is h ...

Assignment - write a financial analysis for a us-based

Assignment - Write a financial analysis for a U.S.-based, publicly traded organization. To begin, research the latest two years of financial statements for a publicly traded organization based in the United States. Obtai ...

Last year galaxy corp had 350000 of assets which is equal

Last year Galaxy Corp had $350,000 of assets (which is equal to its total invested capital), $475,000 of sales, $30,250 of net income, and a debt-to-capital ratio of 40%. The new CFO believes the firm has excessive fixed ...

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

Recent Questions

Ask Basic Finance Expert