Time warner shares have a market capitalization of 55, Ask an Expert

Finance

Time Warner shares have a market capitalization of $55 billion. The company just paid a dividend of $0.35 per share and each share trades for $35. The growth rate in dividends is expected to be 6.5% per year. Also, Time Warner has $20 billion of debt that trades with a yield to maturity of 7%. If the firm's tax rate is 30%, compute the WACC?

A) 6.81%

B) 6.85%

C) 7.45%

D) 7.93%

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M944169

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Felcor stock is currently selling for 4000 a share but is

Felcor stock is currently selling for $40.00 a share but is expected to either decrease to $36 or increase to $44 a share over the next year. The risk-free rate is 4 percent. What is the current value of a 1-year call op ...

Question - booker inc has identified an investment project

Question - Booker, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $1,000 2 1,230 3 1,450 4 2,190 If the discount rate is 9 percent, what is the future value of these cash flows ...

A company recently had 26 million shares outstanding

A company recently had 26 million shares outstanding trading at $45/share. The company announces its intention to raise $290M by selling new shares. What price shoukd the company expect its existing shares shares to sell ...

A company has a projected times interest earned ratio of 40

A company has a projected times interest earned ratio of 4.0 for the next year. What percentage could EBIT decline next year before the company's times interest earned ratio would fall below 1.0?

Use the following datapurchase costdown payment 1500loan

Use the following data: PURCHASE COST Down payment: $1,500 Loan payment: $450 for 48 months Estimated value at end of loan: $4,000 Opportunity cost interest rate: 4 percent par year LEASING COST Security deposit: $500 Le ...

Estimate cost of capital for a 10-year project with a

Estimate cost of capital for a 10-year project with a market risk B=1.2. Assume expected market return is 10%.

Question - a company currently pays a dividend of 4 per

Question - A company currently pays a dividend of $4 per share (D0 = $4). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, then at a constant rate of 7% thereafter. Th ...

Joshua borrowed 500 on january 1 2017 and paid 25 in

Joshua borrowed $500 on January 1, 2017, and paid $25 in interest. The bank charged him a service charge of $10. He paid it all back at once on December 31, 2017. What was the APR? (Enter your answer as a percent rounded ...

1 your firm expects to incur a 500k loss in year 1 and

1. Your firm expects to incur a ($500K) loss in year 1 and make $100K of net income in year 2 and $300K of net income in year 3. The retention ratio is projected to be 100%. The beginning equity balance on the balance sh ...

Fifth fourth national bank has a savings program which will

Fifth Fourth National Bank has a savings program which will guarantee you $11,000 in 12 years if you deposit $60 per month. What APR is the bank offering you on this savings plan? 3.61% 4.29% 4.46% 3.91% 4.34%

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