Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. piag questioh estimating the weighted average cost

Piag questioh Estimating the Weighted Average Cost of Capital Kellogg Company manufastures cereal and other...

90.2K

Verified Solution

Question

Accounting

image
Piag questioh Estimating the Weighted Average Cost of Capital Kellogg Company manufastures cereal and other convenience food under its many well-known brands such as Kelloggs, Keebler, and Cheez-lt. The company, with over $13.5 billion in annual sales worldwide, partially finances its operation through the issuance of debt. At the beginning of its 2015 fiscal year, it had $6.5 billion in total debt. At the end of fiscal year 2015, its total debt had increased to $6.6 billion. Its fiscal 2015 interest expense was $227 million, and its assumed statutory tax rate was 37%. Kellogg has an estimated market beta of 0.90. Assume that the expected risk-free rate is 2.5% and the expected market premium is 5%. Kellogg's stock closed at $45.59 on December 31, 2015. On that same date, the company had 420,315,589 shares issued, of which 70,291,514 shares were in treasury. a. What is Kellogg's total market capitalization as of December 31, 2015 Enter answer in billions, rounding to one decimal place. $ 1.6 x billion b. Compute Kellogg's WACC. Use your rounded answer above for computation Round answer to one decimal place (ex: 0.0245-2.5%). 7.4

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

Underwater Mortgage. Bernie Madeoff pays $250,000 for a newfour-bedroom 2,400-square-foot home outside Tonophah, Nevada....

Chemistry
1.2K views

The tetraborate ion present in a 5.00 mL sample of a saturated borax solution is titrated...

Mechanical Engineering
1.2K views

  (A) Derive Bernoulli's Equation from Pressure, Kinetic Energy and Potential Energy (B) Express Bernoulli's equation: - Per...

Basic Math
1.2K views

Let p q be the following propositions p 7 17 q 1 8 Match each...

Accounting
1.2K views

you are required to provide an overview on how dmbs function within an organisation. your...

Accounting
1.2K views

Middieton Associates is a consulting firm that specializes...

Accounting
1.2K views

On 2/25/2016 JNJ issued a bond with coupon of 2.45%, face value of $2 Billion,...

Accounting
1.2K views

T, who never married nor made any prior inter vivos gifts, made taxable gifts of...

Accounting
1.2K views

At a sales volume of 38,500 units, Choice Corporation's sales commissions (a cost that is...

Accounting
1.2K views

The impact of such frauds on the business firm, shareholders, society at large etc. Guidelines...

Accounting
1.2K views

Tiene la meta de tener $240,000 dentro de cuatro aos. Se espera que el retorno...

Accounting
1.2K views

You are an Audit Supervisor working at the audit firm Tulipan LLC, the appointed auditor...