subject
Business, 19.11.2019 02:31 Geo777

Ignacio, inc., had after-tax operating income last year of $1,196,500. three sources of financing were used by the company: $1 million of mortgage bonds paying 4 percent interest, $6 million of unsecured bonds paying 6 percent interest, and $11 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). the rate on long-term treasuries is 4 percent. ignacio, inc., pays a marginal tax rate of 30 percent. required: 1. calculate the after-tax cost of each method of financing. enter your answers as decimal values rounded to three places. for example, 4.36% would be entered as ".044". mortgage unsecured common 2. calculate the weighted average cost of capital for ignacio, inc. round intermediate calculations to four decimal places. round your final answer to four decimal places before converting to a percentage. for example, .06349 would be rounded to .0635 and entered as "6.35" percent. % 2. calculate the total dollar amount of capital employed for ignacio, inc. $ 3. calculate economic value added (eva) for ignacio, inc., for last year. if the eva is negative, enter your answer as a negative amount. $ is the company creating or destroying wealth? - select your answer - (creating/ destroying)? 4. what if ignacio, inc., had common stock which was less risky than other stocks and commanded a risk premium of 5 percent? how would that affect the weighted average cost of capital? - select your answer - (higher/lower/unaffected)? 5. what is the new eva? in your calculations, round weighted average percentage cost of capital to four decimal places. if the eva is negative, enter your answer as a negative amount. $

ansver
Answers: 3

Another question on Business

question
Business, 23.06.2019 02:20
Which one of the following is not a typical current liability? a. interest payable b. current maturities of long-term debt c. salaries payable d. mortgages payable
Answers: 3
question
Business, 23.06.2019 10:50
In the current period, forward co. started with the production of 21,000 units and completed 8,400 units, leaving 13,200 units in process that are 42% complete. if forward co. incurred production costs of $34,980, what was forward's cost per equivalent unit for the period? (note: round your answer to two decimal places.)
Answers: 3
question
Business, 23.06.2019 15:10
Bramble corporation is a small wholesaler of gourmet food products. data regarding the store's operations follow:
Answers: 2
question
Business, 23.06.2019 20:00
Abrief overview of your company's strengths, weaknesses, opportunities, and threats is called a branding strategy. financial evaluation. paranoid scenario. situational analysis.
Answers: 1
You know the right answer?
Ignacio, inc., had after-tax operating income last year of $1,196,500. three sources of financing we...
Questions
question
History, 09.12.2021 21:00
question
English, 09.12.2021 21:00
Questions on the website: 13722367