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...

60.1K

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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

How would changes to the way fish adjust their swim bladder be an advantage? What new niches...

Biology
Q

What are the values in arrays a, b, and c after the following code executes (list...

Programming
Q

reviewing literature is an essential part of the research process. using practical example , illustrate the...

Psychology
Q

Describe the application (apps) implementation in industrial management. The current environment of modern logistics operations in the...

General Management
Q

Which is not a function of the kidney Recycling of red blood cells Regulating blood...

Biology
Q

Each of the following citric acid cycle enzymes catalyzes electron transfer to NADH FADH2 except...

Biology
Q

State what kind of correlation if any the scatterplot to the right indicates Choose the...

Basic Math
Q

H t 10 9 8 6 5 4 if 1 0 if t 0 dom...

Calculus
Q

CURRENT OBJECTIVE Use the disk method to find the volume of a solid of revolution...

Calculus
Q

most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,300...

Accounting
Q

Seminole Company began the year with 25,000 units of product in its January 1 inventory...

Accounting
Q

Assume a company has 2 million common shares outstanding. Its stock's most recent sales price...

Finance