What is the weighted average cost of capital for SKYE Corporation given the followinginformation? Equity shares outstanding 1 million Stock price per share $ 23 Yield to maturityon debt 7.68% Book value of interest - bearing debt $14 million Coupon interest rate ondebt 9% Interest rate on government bonds 7% SKYE's equity beta 0.75 Historical excessreturn on stocks 5.8% Tax rate 40% Note: Enter your answer to 1 decimal place.

Value of Equity =Equity shares outstanding ∗ Stock price per share=1million×$23=$23million Value of…

Answered: What is the weighted average cost of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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What is the weighted-average cost of capital for SKYE Corporation given the following information? 1 million Equity shares outstanding. Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Interest rate on government bonds SKYE's equity beta Historical excess return on stocks Tax rate Note: Enter your answer to 1 decimal place. Weighted-average cost of capital % $ 20 7.68% $11 million 98 3% 0.75 5.5% 45%
What is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding 1 million Stock price per share $ 35 Yield to maturity on debt 7.68% Book value of interest-bearing debt $14 million Coupon interest rate on debt 9% Interest rate on government bonds 7% SKYE’s equity beta 0.75 Historical excess return on stocks 7.0% Tax rate 40% Note: Enter your answer to 1 decimal place. Weighted-average cost of capital. %
What is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Interest rate on government bonds SKYE's equity beta Historical excess return on stocks Tax rate Note: Enter your answer to 1 decimal place. X Answer is complete but not entirely correct. Weighted-average cost of capital 11.6 × % 1 million $ 23 7.68% $14 million 9% 7% 0.75 5.8% 40%
Assume Skyler Industries has debt of $4,398,941with a cost of capital of 9% and equity of $5,435,265 with a cost of capital of 6.1%. What is Skyler’s weighted average cost of capital for debt? Round to the nearest hundredth, two decimal places and submit the answer in a percentage.
Assume Skyler Industries has debt of $4,775,777with a cost of capital of 7.8% and equity of $5,798,398 with a cost of capital of 9.6%. What is Skyler’s weighted average cost of capital for equity? Round to the nearest hundredth, two decimal places and submit the answer in a percentage.
Assume Skyler Industries has debt of $4,153,821with a cost of capital of 7.4% and equity of $5,679,075 with a cost of capital of 6.7%. What is Skyler’s total weighted average cost of capital? Round to the nearest hundredth, two decimal places and submit the answer in a percentage.
Estimating Cost of Equity Capital Assume that a company’s market beta equals 0.8, the risk-free rate is 5%, and the market return equals 8%. Compute the company’s cost of equity capital. Round answer to one decimal place (ex: 0.0245 = 2.5%) Answer%
Question Suppose a firm raises $23 million dollars by issuing debt at a cost of 6.1%, raises $14 million by issuing common stock at a cost of 8.6% and raises an additional $10 million by issuing preferred stock at a cost of 10.7%. What is the average cost of capital per dollar raised (this is similar to the concept of weighted average cost of capital in your finance classes)? (please round your answer to 1 decimal place)
Following is the financial statements data for XYZ Corporation: XYZ Corp. Total Assets $23,565 Interest-Bearing Debt $12,131 Average borrowing rate for debt Common Equity: 11.7% Market Value $26,887 Marginal Income Tax Rate 35% Market Beta 1.91 Based on the information above, what is the weight on equity capital that you can use to calculate the firm's weighted-average cost of capital (WACC) (Write your answer in percent, omit the "%" sign, and round your answer to two decimal places. For example, if your answer is 0.538, type in 53.80):
You have collected the following information about a company: Source of capital Market value Book value After-tax cost Long-term debt 100,000 100,000 0.08 Preferred stock 60,000 72,000 0.11 Common stock 200,000 100,000 0.15 Total 360,000 272,000 What is the weighted average cost of capital using market values?
Evans Technology has the following capital structure. Debt Common equity 30% 70 The aftertax cost of debt is 7.50 percent, and the cost of common equity (in the form of retained earnings) is 14.50 percent. a. What is the firm's weighted average cost of capital? Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. Debt Common equity Weighted average cost of capital Weighted Cost % 0.00 % Q Search An outside consultant has suggested that because debt is cheaper than equity, the firm should switch to a capital structure that is 50 percent debt and 50 percent equity. Under this new and more debt-oriented arrangement, the aftertax cost of debt is 8.50 percent, and the cost of common equity (in the form of retained earnings) is 16.50 percent. b. Recalculate the firm's weighted average cost of capital. O Che
if A firm's current balance sheet is as follows: Assets $100 Debt $10 Equity $90 a. what is the firm's weighted-average cost of capital at various combinations of debt and equity, given the following information? Debt/assets after-tax cost of Debt cost of equity cost of capital 0% 8% 12% ? 10 8 12 ? 20 8 12 ? 30 8 13 ? 40 9 14 ? 50 10…

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