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HOME DATA * Cut Fonte Tont Name - B i Tab Stop Wrap Text Sverine Pri Copy Mercell "Insert Column 2. Insertion Delete com 1. DeleteRow Conditional Formatting Hemove conditional formats 21 CUCK HERE TO SAVE YOUR WORK Clearview Systems Ud. D Soon Clearview Systems Ltd. Suppose you have been hired as a financial consultant to Clearview Systems Ltd., a large publicly traded firm that is the market share leader in radon detection systems (RDSS). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. The project will require an investment of $12.0 million dollars and the president of the company wants to be sure she understands her cost of capital before going ahead with the decision. Market information for the latest year-end (December 31/2020) is as follows: Debt The company has issued 10,700 bonds, each with a par value of $1,000 and a coupon rate of 6.90 percent (payable semi-annually). The bonds were issued 8 years ago with a 25 year maturity. They are currently selling for $901.00 each. Preferred Stock 142,000 preferred shares have been authorized (with 133,000 issued and outstanding). The closing price of preferred shares was $33.40 per share. Common Fruit 14 Question WACC New 250 n common charos have heanantherirorth 290 m sharot carorland New lab HOME DATA VW Font Name - Wrap Text Forte R Stop US PO Insert Cou Delete com Prede Copy Meil 1. DeleteRow Remove Conditional formats CLICK HERE TO SAVE YOUR WORK Clearview Systems Ltd. D RO Common Equity 359,000 common shares have been authorized (with 280,000 shares issued and outstanding). Common shares are selling for $88.00 per share. 7 Clearview Systems Ltd. uses G. M. Wharton as its lead underwriter. Wharton charges 3.00 percent commission on new common stock issues, 3.00 percent on new preferred stock issues, and 6.00 percent on new debt issues. Wharton has included all direct and indirect flotation costs in these rates. The preferred shares were issued six years ago and pay an annual dividend of $1.69 per share. Last year, Clearview Systems Ltd, declared and paid a common share dividend of $1.37 per share. This represented a 3.00 percent growth in the common share dividend (a rate that is expected to continue into the future) and a dividend payout ratio of 30.0 percent (also expected to continue into the future). Clearview Systems Ltd.'s tax rate is 30.0 percent. Preliminary year-end results show net earnings (after interest, taxes and preferred share dividends) for the year ending December 31, 2020 is $4.0 million 10 Question WACC New New Tab XC0 HOME ORTA Font- Font- B 4 Copy Tabita HO 3. DeleteRow CHE TO SAVE YOUR WORK 1 2 D N Clearview Systems Ltd. The following table is presented to help you on the information from the case If not all of these wortes can be found here may to collettore of the Bonds Prel Common YA Dp DE TC PP PO F 10 Requirements: 11 A. Find market values of outstanding bonds, preferred shares and common shares 13 Support information 1. Bonde What is the manufach bond 3124 SAMET Romerorem 15 16 Ill NAME 11 25 30 2000 stion WACO NOW Cut Form Insert Com Delete Column R U Oveline Merged Conditional maig em Condial Formats 3. Delete flow HERE TO SAVE YOUR WORK marking M O G H (round your answer to whole numbers Forumle, 1.234.000 not $12 million O NAME? {Round your answer to whole numbers. For example, $120,000 not $ 254 million NAME? Round your answer to two decimal place le 12.34. Do not enter the percentilor Supporting information percent Debt Preferred Common Ipercent percent C.Calculate the after tax cost of the various components of WACC Round your answer to two decimal places les 12:34). Do not enter the pertension Supporting information 1. Bonds a. What is the nominal Yield-to-maturity? b. What is the effective yield-to-maturity? c. Calculate the after-tax cost of new debt (using the effective yield-to-matunty) percent percent percent 2. Preferred shares percent 3. Common equity in the form of retained earnings: percent percent 4. Common equity in the form of new shares il Question WACC New New Tab + XCIO sour DATA ww Font Non- Cart For TabStop We fout USO huyo 2. Warto 2 Die 1 Meg Call Cardinalom Condition to BED Te TEOSYO WORK D F 1 27 C.Calculate the after tax cost of the various components of WACCI to your enthe Supportinformation 10 31 1. Bands What is the nominal yield-to-maturity? b. What is the effective yield to maturity? calculate the after tax cost of new debt using the effective to maturity percent percent percent 13 2. Preferred shares: percent 3. Common equity in the form of wieder percent 38 4. Common equity in the form of new shares percent 39 D. What is the weighted Average cost of Capitali Internet 1 1. the company uses debt. new preferred shares and just retained earning and is to dete Supporting information Aortal Cost wanted Cost De Prel percent Bercent Question WACC New DATA WW Font Name Front- Wrap Text niet Y De Colim Copy Over Meral Condom Reconditions 2-Row 3. Delete CUKK HERE TO SAVE YOUR WORK H 1 G 4. Common equity in the form of new shares M 0 N percent 19 . What is the weighted Average cost of Capitalit Inter your answer to two decimal places de 114 Donner 40 41 Supporting information 43 1. the company uses new debt, new preferred shares and just retained earnings? und allow decimale 123 on the Decation Debt Prel Coron Wert COS Wegned Dust Wees 64 45 percent percent percent pered 47 18 WACC Supporting information 50 51 52 Alt Cost Weight Cost 2 the company uses new debt, new preferred shares and new common shares odsto de 12.341 bonutte DON Debt Pret Common WACCI percent Support information 6 E How much of the new capital projects can be funded without using new shareholders? who Kunstion WACC tx HOM viw * C Fort Piste u 5 O Delete com Condo Meryl - to CLICK HERE TO SAVE YOUR WORK marking AB Common 42 49 percent WAG percent Supporting information 2. the company uses new debt, new preferred shares and new.common shares? found wees totdec 14th percent Debt Pre Common Winted Coo Cost 50 51 52 53 50 55 56 57 58 59 60 51 02 WACO percent Supporting information E. How much of the new capital projects can be funded without using new shareholders? Enter your own content for 24000 24 27 Question WACC NAM HOME DATA * Cut Fonte Tont Name - B i Tab Stop Wrap Text Sverine Pri Copy Mercell "Insert Column 2. Insertion Delete com 1. DeleteRow Conditional Formatting Hemove conditional formats 21 CUCK HERE TO SAVE YOUR WORK Clearview Systems Ud. D Soon Clearview Systems Ltd. Suppose you have been hired as a financial consultant to Clearview Systems Ltd., a large publicly traded firm that is the market share leader in radon detection systems (RDSS). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. The project will require an investment of $12.0 million dollars and the president of the company wants to be sure she understands her cost of capital before going ahead with the decision. Market information for the latest year-end (December 31/2020) is as follows: Debt The company has issued 10,700 bonds, each with a par value of $1,000 and a coupon rate of 6.90 percent (payable semi-annually). The bonds were issued 8 years ago with a 25 year maturity. They are currently selling for $901.00 each. Preferred Stock 142,000 preferred shares have been authorized (with 133,000 issued and outstanding). The closing price of preferred shares was $33.40 per share. Common Fruit 14 Question WACC New 250 n common charos have heanantherirorth 290 m sharot carorland New lab HOME DATA VW Font Name - Wrap Text Forte R Stop US PO Insert Cou Delete com Prede Copy Meil 1. DeleteRow Remove Conditional formats CLICK HERE TO SAVE YOUR WORK Clearview Systems Ltd. D RO Common Equity 359,000 common shares have been authorized (with 280,000 shares issued and outstanding). Common shares are selling for $88.00 per share. 7 Clearview Systems Ltd. uses G. M. Wharton as its lead underwriter. Wharton charges 3.00 percent commission on new common stock issues, 3.00 percent on new preferred stock issues, and 6.00 percent on new debt issues. Wharton has included all direct and indirect flotation costs in these rates. The preferred shares were issued six years ago and pay an annual dividend of $1.69 per share. Last year, Clearview Systems Ltd, declared and paid a common share dividend of $1.37 per share. This represented a 3.00 percent growth in the common share dividend (a rate that is expected to continue into the future) and a dividend payout ratio of 30.0 percent (also expected to continue into the future). Clearview Systems Ltd.'s tax rate is 30.0 percent. Preliminary year-end results show net earnings (after interest, taxes and preferred share dividends) for the year ending December 31, 2020 is $4.0 million 10 Question WACC New New Tab XC0 HOME ORTA Font- Font- B 4 Copy Tabita HO 3. DeleteRow CHE TO SAVE YOUR WORK 1 2 D N Clearview Systems Ltd. The following table is presented to help you on the information from the case If not all of these wortes can be found here may to collettore of the Bonds Prel Common YA Dp DE TC PP PO F 10 Requirements: 11 A. Find market values of outstanding bonds, preferred shares and common shares 13 Support information 1. Bonde What is the manufach bond 3124 SAMET Romerorem 15 16 Ill NAME 11 25 30 2000 stion WACO NOW Cut Form Insert Com Delete Column R U Oveline Merged Conditional maig em Condial Formats 3. Delete flow HERE TO SAVE YOUR WORK marking M O G H (round your answer to whole numbers Forumle, 1.234.000 not $12 million O NAME? {Round your answer to whole numbers. For example, $120,000 not $ 254 million NAME? Round your answer to two decimal place le 12.34. Do not enter the percentilor Supporting information percent Debt Preferred Common Ipercent percent C.Calculate the after tax cost of the various components of WACC Round your answer to two decimal places les 12:34). Do not enter the pertension Supporting information 1. Bonds a. What is the nominal Yield-to-maturity? b. What is the effective yield-to-maturity? c. Calculate the after-tax cost of new debt (using the effective yield-to-matunty) percent percent percent 2. Preferred shares percent 3. Common equity in the form of retained earnings: percent percent 4. Common equity in the form of new shares il Question WACC New New Tab + XCIO sour DATA ww Font Non- Cart For TabStop We fout USO huyo 2. Warto 2 Die 1 Meg Call Cardinalom Condition to BED Te TEOSYO WORK D F 1 27 C.Calculate the after tax cost of the various components of WACCI to your enthe Supportinformation 10 31 1. Bands What is the nominal yield-to-maturity? b. What is the effective yield to maturity? calculate the after tax cost of new debt using the effective to maturity percent percent percent 13 2. Preferred shares: percent 3. Common equity in the form of wieder percent 38 4. Common equity in the form of new shares percent 39 D. What is the weighted Average cost of Capitali Internet 1 1. the company uses debt. new preferred shares and just retained earning and is to dete Supporting information Aortal Cost wanted Cost De Prel percent Bercent Question WACC New DATA WW Font Name Front- Wrap Text niet Y De Colim Copy Over Meral Condom Reconditions 2-Row 3. Delete CUKK HERE TO SAVE YOUR WORK H 1 G 4. Common equity in the form of new shares M 0 N percent 19 . What is the weighted Average cost of Capitalit Inter your answer to two decimal places de 114 Donner 40 41 Supporting information 43 1. the company uses new debt, new preferred shares and just retained earnings? und allow decimale 123 on the Decation Debt Prel Coron Wert COS Wegned Dust Wees 64 45 percent percent percent pered 47 18 WACC Supporting information 50 51 52 Alt Cost Weight Cost 2 the company uses new debt, new preferred shares and new common shares odsto de 12.341 bonutte DON Debt Pret Common WACCI percent Support information 6 E How much of the new capital projects can be funded without using new shareholders? who Kunstion WACC tx HOM viw * C Fort Piste u 5 O Delete com Condo Meryl - to CLICK HERE TO SAVE YOUR WORK marking AB Common 42 49 percent WAG percent Supporting information 2. the company uses new debt, new preferred shares and new.common shares? found wees totdec 14th percent Debt Pre Common Winted Coo Cost 50 51 52 53 50 55 56 57 58 59 60 51 02 WACO percent Supporting information E. How much of the new capital projects can be funded without using new shareholders? Enter your own content for 24000 24 27 Question WACC NAM

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