An entity has the following information in its balance sheet. Ordinary shares of TZs 50 each TZS 2,500,000 1,000,000 The ordinary shares are currently quoted at TZS 130 each and the loan notes are trading at TZS 72 per shs100 nominal. The ordinary dividend of TZS 15 has just been paid with an expected growth rate of 10%. Corporation tax is currently 12% Unsecured loan notes 30% Required: Calculate the Weighted Average Cost of Capital (WACC) for this entity.
Q: Consider the following information for Federated Junkyards of America. Debt: $76,000,000 book value…
A: Market value of debt = 91% of the book value =91%*$76,000,000 = $69,160,000 Market value of equity =…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: As per formula; Cost of common equity = D0 * (1 + g) / P0 + g Where; D0 = Current dividend i.e.…
Q: Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions):…
A:
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Cost equity by dividend growth model: Cost of Equity = D0*(1+g)/P + g D0 is current dividend g is…
Q: Priyo Prangon Group has the following capital structure, which it considers optimal: Mortgage…
A: The weighted average cost of capital is the overall capital of the company based on the weights. The…
Q: Binomial Tree Farm's financing includes $5 million of bank loans and $6 million book value of…
A: The debt ratio used to calculate WACC is the weight of debt in the capital structure of the company.…
Q: Vickrey Technology has had net income of $1,500,000 in the current fiscal year. There are 1,000,000…
A: Net income= $1,500,000 Common stock outstanding= 1,000,000 shares Total face value= $8 million…
Q: Assume the following facts about a company: Capital (000's) EBIT (000's) $1,000 Debt -…
A: Earnings per share = Net Income attributable to equity shareholders/Weighted average number of…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Cost of Debt = 11% Current Dividend = 2 Current Stock Price = 26.25 Dividend growth rate = 5% Tax…
Q: Shi Import-Export's balance sheet shows $300 million in debt, $50 million in preferred stock, and…
A: Weighted Average Cost of Capital (WACC) is defined as the minimum rate that is needed to be earned…
Q: A company receives $50 million by issuing new shares of stock. It uses the cash received to pay off…
A: The issuance of common stock would affect the common stock and the cash received would increase the…
Q: If Al Salam Firm has preferred stocks with dividends of $4,000 and the common shares outstanding…
A: Given Information: Preferred dividend is $4000 Outstanding shares is 3000 Debt of convertible bonds…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: After tax cost of debt is = 8%(1-0.25) = 6%
Q: How much of the firm's market value is accounted for by the debt-generated tax shield? (Enter your…
A: WACC: It represents the average cost of capital for the firm. It is calculated by the sum of the…
Q: An entity has the following information in its statement of financial position. Ordinary…
A: The average after-tax cost of capital for a corporation is known as the weighted average cost of…
Q: Windsor, Inc. is considering these two alternatives to finance its construction of a new $1.76…
A: EPS stands for Earnings per share which is a vital financial measure, it states the company…
Q: What percentage of the company's capital structure consists of debt? Do not round intermediate…
A: Information Provided: Before-tax cost of debt = 11% Dividend per share = $3.50 Stock price = $21.50…
Q: The following are forecasts for the Can Corn Corporation for the upcoming year: Earnings before…
A: Particulars Amount (in millions) Earnings before interest and taxes P55 Less: Interest 15…
Q: Company A is planning a $4,000,000 expansion this year. The expansion can be financed by issuing…
A: Earnings per share- Earnings per share (EPS) is a financial term that measures a company's ability…
Q: lue Co. has the following information with regards to the financial break-even point: · Annual…
A: Financial breakeven is that there is just interest and preferred dividend is paid.
Q: What is the % of Debt in the Capital Structure?
A: Information Provided: Bok value of debt = $600M Book value of equity = $1400M Current price of stock…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Weighted average cost of capital is overall cost of funds employed. It is computed by proportioning…
Q: Book Co. has 1.9 million shares of common equity with a par (book) value of $1.50, retained earnings…
A: The market value of equity is used to define the value of a company in the open market. The market…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Cost of debt =9% Tax = 40% So, After tax cost of debt = Cost of debt*(1 -Tax rate) After tax cost of…
Q: WACC Shi Import-Export's balance sheet shows $300 million in debt, $50 million in preferred stock,…
A: Tax = 25%, rd = 6%, rps = 7.3%, and rs = 10% Weights: 30% debt, (Wd = 30%) 5% preferred stock,(Wps…
Q: i n 2018, Caterpillar Inc. had about 654 million shares outstanding. Their book value was $29.0 per…
A: Debt to Value ratio Debt to value ratio represent the amount of debt held by the company in its…
Q: A firm's new financing will be in proportion to the market value of its current financing shown…
A:
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Before tax cost of debt = 11% Tax rate = 35% After tax cost of debt = 0.11*(1-0.35)…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Cost of Debt before tax = 8% Stock Current Dividend per share = 4 Stock Current Price = 29.50…
Q: Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions):…
A: a. Firm's market value accounted by the debt-generated tax shield can be calculated as follows:…
Q: The following are some financial data pertaining to Czy Corporation: Capital Structure (In…
A: WACC is calculated as the product of weight of each capital structure and their respective cost of…
Q: The following are some financial data pertaining to Czy Corporation: Capital Structure (In…
A: Here, Interest Rate on Long Term Debt is 12% Tax Rate is 30%
Q: Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions):…
A: Weighted average cost of capital (WACC):- Weighted average cost of capital (WACC) is a method of…
Q: Company A pays out all available earnings as dividends. Company A is is entirely equity financed…
A: Repurchase occurs when a company starts buying its own stock on the open market. The company can buy…
Q: The following are some financial data pertaining to Czy Corporation: Capital Structure (In…
A: The cost of equity can be calculated with the help of CAPM equation
Q: A company has the following information in its statement of financial position. Ghs'm Ordinary…
A: Weighted average cost of capital is the expected rate of return that is expected from a company to…
Q: Here are book- and market-value balance sheets of the United Frypan Company (figures in $ millions):…
A: Given Information: Book-Value Balance Sheet Net working capital $ 50 Debt $ 70 Long-term…
Q: Hook Industries capital structure consists solely of debt and common equity. It can issue debt at rd…
A:
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Before tax cost of debt = 11% Tax rate = 25% After tax cost of debt = 0.11*(1-0.25)…
Q: A public company has the following balance sheet ($000’s) Cash…
A: WACC: The weighted average cost of capital is calculated as per weight and cost of each capital used…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Capital Structure: A company's capital structure is the specific mix of debt and equity it employs…
Q: The following information has been extracted from the published accounts of Pesa Corporation…
A: Earnings per share refer to the amount earned by each stockholder. This can be identified by…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: The capital structure of a company consists of equity and debt. The costs of raising funds from both…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Cost of debt = 11% current price of stock = 34.75 Current dividend = 2.50
Q: a. What is the market value of its equity? b. What is the market value of its debt? c. What…
A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…
Q: Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at…
A: Cost of Debt is 12% Current Dividend is $2 Current Stock price is $26 Growth rate is 6% Tax rate is…
Q: The Light Steel Company has the following composition of debt and capital: Bond liability, 20% (sold…
A: Earning per share = Earning attributable to equity share holders/ number of outstanding equity…
Q: Naruto Bakery has a capital structure consisting of: 42,000 issued and paid-up ordinary shares…
A: Given information: 42,000 issued and paid-up ordinary shares RM105,000 5,000 issued and paid-up 10%…
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- The following is the Balance sheet of Moin lilited as on 31st march 2020. You are required to comment on the Liquidity of the Company Liabilities Amount 5,00,000 Equity Share Capital 8% preference Share Capital 10%long term loans 14%debentures Sundry creditors Bills payable Provision for taxation Proposed preference dividend Bank overdraft 3,00,000 3,25,000 1,50,000 75,000 30,000 70,000 24,000 20,000 14,94,000 Assets Goodwill Premises Machinery Trade investments Short term investment Stock Debtors Bills payable Cash Prepaid expenses Amount 1,00,000 3,00,000 4,50,000 1,00,000 44,000 1,75,000 1,75,000 1,25,000 10,000 15,000 14,94,000Binomial Tree Farm's financing includes $5 million of bank loans. Its common equity is shown in Binomial's Annual Report at $6.67 million. It has 500,000 shares of common stock outstanding, which trade on the Wichita Stock Exchange at $18 per share. What debt ratio should Binomial use to calculate its company cost of capital or asset beta? Note: Enter your answer as a percent rounded to 2 decimal places. Debt ratio %An accountant for Stability Inc. must calculate the weighted average cost of capital of the corporation using the following information. Interest Rate Accounts payable $35,000,000 0 Long-term debt 10,000,000 8% Common stock 10,000,000 15% Retained earnings 5,000,000 18% What is the weighted average cost of capital of Stability? Select one: a. 8.00% b. 10.25% c. 12.80% d. 6.88%
- Q1. Alpha Corporation reported the following financial details for the financial year 2021. Revenue is $250 million. EBITDA margin is 45%, EBIT margin is 25%. D&A is $10 million. Interest expense is $5 million. Interest & dividend income is $15 million. The firm sold an asset that has a book value of $33 million, for $30 million. The tax rate applicable for the firm is 20%. The basic number of shares were 5 million, and diluted number of shares were 5.25 million. a) Show the required workings to determine the basic EPS and diluted EPS for 2021. b) The Board of Directors of Alpha Corporation decided to declare 40% of net income as dividend for the financial year 2021. An investor holds 350 shares of Alpha Corporation. Determine the dividend income received by the investor. How much funds will be added to the retained earnings account for 2021.1. In January 2028. Interesado Bank reported a net income of P500,000, net of debt securities trading loss of P100,000. In February 2028, the bank reported the following gross receipts: Interest income with maturity more than 5 year 400,000Leasehold income 300,000How much is the gross receipts tax on the collections of Interesado for February 2028? 2. Macmod sold 2,000 shares of his investment in stock eCare. The sale is made through the Philippine Stock Exchange (PSE) tor P1,000,000. How much is the percentage tax if Macmod acquired the shares of stock for P800,000 3. Macmod sold 2,000 shares of his investment in stock eCare. The sale is made through the Philippine Stock Exchange (PSE) tor P1,000,000. How much is the percentage tax if Macmod acquired the shares of stock for P800,000REQUIREMENT : Compute for the Net Sales At the beginning of the current year, Glasgow Company started business and issued share capital, 60,000 shares with P100 par, for the following considerations: Cash - P500,000; Building with useful life of 15 years - P4,500,000; and Land - P1,500,000. An analysis of the bank statements showed total deposits, including the original cash investment, of P3,500,000. The balance in the bank statement on December 31 was P250,000 but there were checks amounting to P50,000 dated in December but not paid by the bank until January of next year. Cash on hand on December 31 was P125,000 including customers' deposit of P75,000. During the year, the entity borrowed P500,000 from the bank and repaid P125,000 and P25,000 interest. The proceeds of the loan were credited to the bank account of the entity. Disbursements paid in cash during the year were as follows: Utilities - P100,000; Salaries - P100,000; Supplies - P175,000; Taxes - P25,000; and Dividends -…
- You are given the financial information for the Unic Company: Earnings Before Interest and Tax (EBIT) = $126.58 Corporate tax rate (TC) = 0.21 Debt (D) = $500 Unlevered cost of capital (RU) = 0.20 The cost of debt capital is 10 percent. Question: Determine the value of Unic Company equity? Determine the cost of equity capital for Unic Company? Determine the WACC for Unic Company?The book value of Debt is $600M and the book value of Equity is $1,400M. The company's stock is currently trading at $4 per share and there are 1M shares outstanding. The tax rate is 30% What is the % of Debt in the Capital Structure? a. 20% b. 33.3% c. 87% d. 13%The current balance sheet of Bramble Inc. reports total assets of $24 million, total liabilities of $6 million, and stockholders' equity of $18 million. Bramble is considering several financing possibilities in order to expand operations. What will be the effect on Bramble's debt to assets ratio if Bramble issues an additional $6 million in stock to finance its expansion? O The debt to assets ratio will decrease from 0.2500(6/24) to 0.2000 (6/30) after the additional stock sale. O The debt to assets ratio will increase from 24 before to 30 after the additional investment. O The additional stock issuance will have no effect on the debt to assets ratio. The debt to assets ratio will decrease from 6/18 before to 6/30 after the additional stock sale.
- Weaver Plus is a company listed on the New York Stock Exchange market. Extracts from its current statement of financial position are as follows: $’m $’m Equity Ordinary shares (K1 nominal) 15 Reserves 153 168 Non-current liabilities 8% Irredeemable loan notes 10 6% Loan notes 12 22 190 Weaver Plus is planning on expansion of its existing business line and locations costing $10 million in the near future and is assessing its current financial position as part of preparing a business case in support of seeking new finance. The business expansion is expected to increase the profit before interest and tax of Weaver Plus by 20% in the first year. The planned business expansion by Weaver Plus has already been announced to the stock market. Information on the expected increase in profit before interest and tax has not yet been announced and the company has not decided on how the expansion is to be…Jordan Manufacturing reports the following capital structure: Current liabilities P100,000 ; Long-term debt 400,000 ; Deferred income taxes 10,000 ; Preferred stock 80,000 ; Common stock 100,000 ; Premium on common stock 180,000 ; Retained earnings 170,000. What is the debt ratio? A. 0.48 B. 0.49 C. 0.93 D. 0.96A company has current ratio 2:1. It's bank balance is 80000 debit and it's current liabilities are 200,000. It then issues 50,000 new ordinary shares of 1 each at a premium of 0.10 per share. What is the new current ratio