Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 10%, and its marginal tax rate is 25%. The current stock price is P0 = $26.00. The last dividend was D0 = $2.75, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC? Do not round intermediate calculations. Round your answers to two decimal places.
Answers: 2
Another question on Business
Business, 21.06.2019 19:50
Which of the following best explains why treasury bonds have an effect on the size of the money supply? a. the amount of treasury bonds in circulation affects both unemployment and inflation. b. the government can spend more money and charge lower taxes by using treasury bonds. c. the federal reserve bank can buy and sell these bonds to raise or lower bank deposits. d. the interest paid on treasury bonds influences the interest rates charged by private banks. 2b2t
Answers: 1
Business, 22.06.2019 06:30
Ummit record company is negotiating with two banks for a $157,000 loan. fidelity bank requires a compensating balance of 24 percent, discounts the loan, and wants to be paid back in four quarterly payments. southwest bank requires a compensating balance of 12 percent, does not discount the loan, but wants to be paid back in 12 monthly installments. the stated rate for both banks is 9 percent. compensating balances will be subtracted from the $157,000 in determining the available funds in part a. a-1. calculate the effective interest rate for fidelity bank and southwest bank. (do not round intermediate calculations. input your answers as a percent rounded to 2 decimal places.) a-2. which loan should summit accept? southwest bank fidelity bank b. recompute the effective cost of interest, assuming that summit ordinarily maintains $37,680 at each bank in deposits that will serve as compensating balances
Answers: 1
Business, 22.06.2019 10:00
Your uncle is considering investing in a new company that will produce high quality stereo speakers. the sales price would be set at 1.5 times the variable cost per unit; the variable cost per unit is estimated to be $75.00; and fixed costs are estimated at $1,200,000. what sales volume would be required to break even, i.e., to have ebit = zero?
Answers: 1
Business, 22.06.2019 20:00
Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. this increased level of is leading to increased emphasis on management.
Answers: 2
You know the right answer?
Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with n...
Questions
Business, 19.11.2019 23:31
History, 19.11.2019 23:31
Chemistry, 19.11.2019 23:31
Mathematics, 19.11.2019 23:31
History, 19.11.2019 23:31
Law, 19.11.2019 23:31
Mathematics, 19.11.2019 23:31
Computers and Technology, 19.11.2019 23:31
Geography, 19.11.2019 23:31
