Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. ramblin wreck is a firm specializing in engineerin

Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and...

60.1K

Verified Solution

Question

Finance

image

Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project: The project will last 5.00 years with an annual cash flow of $40.00 million. The project will require an initial investment of $140.00 million The firm must determine the cost of capital to evaluate the project. (The project is within the firm's normal activities) Ramblin Wreck, Inc. Financial Data: STOCK DATA: BOND DATA: Current Price Per Share $28.00 Current Price Per Bond $933.00 # of Shares 20,000.00 2.00 million # of bonds $50 million Annual Coupon Rate Book Value 8.00% Face Value Per Bond $1,000 Maturity 10 years The risk free rate in the economy is currently 2.00%, while investors have a market risk premium of 8.00%. Ramblin Wreck, Inc. has a beta of 1.41. The tax rate is 37.00%. What is the WACC for the project? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

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

Biology
1.2K views

While disinfectants are__ antiseptics arechemical agents; physical agentsused on non-living surfaces; used on living surfacesused...

Finance
1.2K views

Danielsen's has 15,000 shares of stock outstanding and projected annual free cash flows of $48,200, $57,900,...

Psychology
1.2K views

Option 1: Psychoactive Drugs and Their Effects on the Brain Your roommate Gretchen has had chronic pain...

Psychology
1.2K views

When did the TOR project begin and how did it get its unusual name? How does...

Biology
1.2K views

Re order each list of elements in the table below if necessary so that the...

Algebra
1.2K views

Use a system of equations to solve the following problemThe local theater has three types...

Accounting
1.2K views

Determine the amount of self-employment tax due for 2018, assuming that Lynette earned $30,000 in...

Accounting
1.2K views

Sheet Medical Supply has applied for a loan. Marine National Bank has requested a budgeted...

Accounting
1.2K views

Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31...

Accounting
1.2K views

What is the difference between a purchase requisition and a purchase order? Group of answer...

Accounting
1.2K views

Santa Fe purchased the rights to extract turquoise on a tract of land over a...

Accounting
1.2K views

Required: Please read these steps carefully and follow this format for your responses. ...