Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. tirana manufacturing company has 9 million shares

Tirana Manufacturing Company has 9 million shares of common stock outstanding, 250,000 shares of 6...

80.2K

Verified Solution

Question

Finance

Tirana Manufacturing Company has 9 million shares of common stock outstanding, 250,000 shares of 6 percent preferred stock outstanding, and 105,000 7.5 percent bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 93 percent of par. (Hence the market value of bonds will be face value x 93 percent x no of bonds). The market risk premium is 8.5 percent, T-bills (risk-free rate) are yielding 5 percent, and Tirana Manufacturings tax rate is 35 percent. a) What is the firms market value capital structure? b) Compute the WACC of Tirana Manufacturing?

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

Finance
1.2K views

Sully contributed $750,000 to an irrevocable trust. He did not retain any right to the trust’s...

Mechanical Engineering
1.2K views

Fluid Mechanics Pipe Problem Type 2 EXAMPLE. Water at 20°C (r=1000 kg/m3 , µ= 0.001 Ns/m2...

General Management
1.2K views

CompTac, Inc., which is headquartered in San Francisco, California, is one of the leading software manufacturers...

Physics
1.2K views

Problem 8 Laser light of wavelength 630 nm incident on a pair of slits produces...

Physics
1.2K views

CO1 1 TCON 2 SBUF 3 TMOD 4 PSW 5 PCON i contains status information...

Algebra
1.2K views

A What are machine translations and how do the various methodologies differ B Neural machine...

Accounting
1.2K views

For the following independent situations, assume you are the audit partner...

Accounting
1.2K views

Here are the comparative income statements of Delaney Corporation. (a) Prepare a horizontal analysis of...

Accounting
1.2K views

Which variance will be unfavorable due to employees working more hours than allowed for the...

Accounting
1.2K views

Products X,Y, and Z are produced from the same process at a cost of $8,560....

Finance
1.2K views

The customer has requested a 30-year fixed rate of 3.50 % locked for 60 days...

Finance
1.2K views

Zax's friend Banner has worked in IT for a bit over a decade. Banner has...