please show equations in cells, NOT just answers Using the weights calculated...
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Accounting
please show equations in cells, NOT just answers
Using the weights calculated in Q3, and the costs of capital in Q4, Q5, and Q6 | ||||
compute the WACC for Consolidated Wheels and Axles Inc. |
Compute the weighted average cost of capital using the information below: | ||||
The effective marginal tax rate is 20% | ||||
Weight | Cost (Rate) | |||
short term debt, not recurring | 0.10 | 7.9% | ||
short term debt, recurring | 0.15 | 7.5% | ||
long term debt | 0.20 | 7.0% | ||
preferred stock | 0.10 | 9.0% | ||
common equity | 0.55 | 11.5% |
|
q3 weights:
Consolidated Wheels and Axles Inc. stock currently sells for $19.05, with 500,000 shares outstanding | |||||
The company also has preferred stock outstanding with a total market value of $1.9 million | |||||
The market value of the firm's debt outstanding is $2.1 million | |||||
What are the firm's cost of capital weights? | |||||
SHOW WORK HERE, HIGHLIGHT FINAL ANSWER IN YELLOW | |||||
Number | Price | Value | |||
Common stock | A | B | A*B | ||
Preferred Stock | 500000 | 19.05 | 9525000 | 0.718867925 | |
Debt | 1900000 | 0.143396226 | |||
2100000 | 0.158490566 | ||||
13250000 | 1 | ||||
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