Company X has the following capital structure, which it considers to be optimal:

Debt =33%, Preferred stock = 28%, Common equity = 39%

Company X’s tax rate is 25% and investors expect earnings and dividends to grow at a constant rate of 6.5% in the future. Company X is expected to pay a dividend of $4.40 per share next year, and its stock currently sells at a price of $55 per share.

Company X can obtain new capital in the following ways:

Preferred: New preferred stock with a dividend of $13 can be sold to the public at a price of $109 per share.
Debt: Debt can be sold at an interest rate of 11%.

Calculate the following:

a. Cost of Common equity?

b. Cost of Preferred Equity?

c. Cost of debt?

d. Weighted Average Cost of Capital (WACC)

Answers

Answer 1

The computations of Company X's Capital Structure is as follows:

a. Cost of Common equity = 7.48% ($4.114/$55 x 100)

b. Cost of Preferred stock = 11.93% ($13/$109 x 100)

c. After-tax cost of debt = 8.25% (11% x 1 - 0.25)

d. Weighted Average Cost of Capital (WACC):

= (39% x 7.48% + 28% x 11.93% + 33% x 8.25%)

= (2.92% + 3.34% + 2.72%)

= 8.98%

= 9%

Data and Calculations:

Capital Structure Weights:

Weight of Debt =33%

Weight of Preferred stock = 28%

Weight of Common equity = 39%

Corporate tax rate = 25%

Earnings growth = 6.5%

Expected dividend per share next year = $4.40

Dividend per share for the current year = $4.114 ($4.40 x 93.5%)

Current common stock price per share = $55

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Related Questions

A rectangular swimming pool has length (x + 4) meters and width (x - 2) meters. The area of the
pool is 72 square meters. The length of the pool is ----- meters.
12
4.
8
16

Answers

Answer:

The length if the pool is 12

Step-by-step explanation:

Formula: A=lw or lw=A

> (x+4)(x-2)=72

> (x²-2x+4x-8)=72

> x²+2x-8=72

> x²+2x-8-72=0

> x²+2x-80=0

Factor

> x²+10x-8x-80

> x(x+10)-8(x+10)

>(x+10)(x-8)

Check:

(x-4); (x-2); x=8

(8+4)=12 Length

(8-2)=6 Width

Write the DECIMAL and FRACTION for ALL THE SHADED SQUARES

Answers

Answer:

56/100=0.56

Step-by-step explanation:

Total box=100

shaded=56

Gannets start their dive at 30 meters above sea level. They plunge at a speed close to 100 km/hr, diving 21 meters below the sea level. What is the total distance of the Gannet’s dive from the start of the descent to the lowest point.e descent to the lowest point.

Answers

Step-by-step explanation:

30+21= 51 meters

I think this is the answer

Evaluate each function for the given input values. For f (x)=x 2- 5, find f (x) when x= 0 and when x= 3

Answers

Answer:

f(x) = x² - 5

so f(0) = 0² - 5 = 0 - 5 = - 5

and f(3) = 3² - 5 = 9 - 5 = 4

Find (fog)(x) when f(x)=x^2-7x+12 and g(x)=3/x^2-16

Answers

Answer:

[tex]f( \frac{3}{ {x}^{2} - 16 } ) = ({\frac{3}{ {x}^{2} - 16 }})^{2} - 7(\frac{3}{ {x}^{2} - 16 }) + 12 \\ = \frac{9}{ {x}^{4} - 32 {x}^{2} + 256 } - \frac{21}{ {x}^{2} - 16} + 12[/tex]


The table above:
on

Answers

your answer is linear. hope this helps

find out the value of X, if√x=9

Answers

To find this answer, take both sides of the equality and square them:

(√ײ)=9²

This gives you:

×=81

If √x=9 then the value of x is 81.

What is Equation?

Two or more expressions with an Equal sign is called as Equation.

The given equation is √x=9

Square root of x is equal to nine.

We need to find the value of x.

√x=9

Apply square on both sides

(√x)²=9²

The root and square will be cancelled on the left side

x=9²

Nine to the power of 2 is eighty one

x=81

Hence, the value of x is 81 when √x=9

To learn more on Equation:

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#SPJ2

The distance s that an object falls varies directly with the square of the time t of the fall.
If an object falls 16 ft in one second, determine the constant of variation k in the equation of
variation 2s kt= , and complete the following table of values for the distance s that an object
falls for different times t of the fall.
Table:
Time t distance s
1 seconds
2 seconds
3 seconds
4 seconds

Answers

The answer is 1 seconds

36 is what percent less than 60?

Answers

Answer:3540

Step-by-step explanation:

36 percent is-3600%

3600-60=3540

Answer:

Step-by-step explanation:

ham sandwich 22

A plane flies at a speed 580 km/hr at a constant height of 16 km. How rapidly is the angle of elevation to the plane changing when the plane is directly above a point 125 km away from the observer?

Answers

Answer:

-0.584 rad/hr, rounded to the nearest 1000th  

Step-by-step explanation:

Let D = D(t) = the horizontal distance from the observer to the plane at time t in units of km.  

Let E = E(t) = the angle of elevation at time t in units of Radians.

Then, by geometry,

tan(E) = 16 / D, and furthermore, we have that

tan(E) = 16 * D^(-1)

d/dt (tan(E)) = d/dt ( 16 * D^(-1))

sec^2 (E) * dE/dt = 16(-1)(D^(-2)) * dD/dt

( sqrt(D^2 + 16^2) / D )^2 * dE/dt = -16 (D^(-2)) * dD/dt

(D^2 + 16^2)/D^2  *  dE/dt = -16 (D^(-2)) * dD/dt

dE/dt = -16 (D^(-2)) * dD/dt * D^2 / (D^2 + 16^2)

dE/dt = -16 (dD/dt) / (D^2 + 16^2)

dE/dt = -16 (580 km/hr) / (125^2 + 16^2), at time t such that D(t) = 125 km,

dE/dt = (-9280 / 15881) rad/hr

dE/dt = -0.584 rad/hr, rounded to the nearest 1000th

 

The director of student life at a university wants to estimate the proportion of undergraduate students who regularly park a car on campus. Describe how to select a stratified random sample of approximately 100 students. Explain your choice of strata and why stratified random sampling might be preferred in this context.

Answers

Random sampling involves selecting a sample where each element of the sample have an equal probability of selection.

From the question, we understand that the director wants to make use of a stratified random sampling technique.

The stratified random sampling technique involves selecting the sample (i.e. 100 students), by dividing the whole undergraduate students into groups (i.e. strata), and then select a proportion from each group.

A possible way to achieve this, is as follows:

Divide the undergraduate students in faculties (assume the university has 10 faculties)Then select 10 students from each of the 10 faculties.

With the above highlights, the director would be able to make the selection.

Read more about random sampling at:

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provide an interpretation for V^-1(80)=

Answers

9514 1404 393

Answer:

  the input that will cause function V to have an output of 80

Step-by-step explanation:

The interpretation of a function V(x) is ...

  the output of function V that corresponds to the input x

__

The corresponding interpretation of the inverse function V^-1(x) is ...

  the input to function V that will cause its output to be x

__

Then the meaning of V^-1(80) is ...

  the input to function V that will cause its output to be 80

Solve for x in the equation 3 x squared minus 18 x + 5 = 47.
x = 3 plus-or-minus StartRoot 23 EndRoot
x = 3 plus-or-minus StartRoot 51 EndRoot
x = 3 plus-or-minus StartRoot 41 EndRoot
x = 3 plus-or-minus StartRoot 5 EndRoot

Answers

Answer:

first option

Step-by-step explanation:

3x² - 18x + 5 = 47 ( subtract 5 from both sides )

3x² - 18x = 42 ( divide through by 3 )

x² - 6x = 14

Using the method of completing the square

add ( half the coefficient of the x- term )² to both sides

x² + 2(- 3)x + 9 = 14 + 9

(x - 3)² = 23 ( take square root of both sides )

x - 3 = ± [tex]\sqrt{23}[/tex] ( add 3 to both sides )

x = 3 ± [tex]\sqrt{23}[/tex]

Answer:

a

Step-by-step explanation:

Graph the line passing through the given point and having the given slope (0,3), m=4

Answers

Hint :-

To find out the equation of the line we can use the point slope form of the line which is [tex] y - y_1 = m(x-x_1) [/tex]

Solution :-

The given point to us is , [tex](0,3)[/tex] and the slope of the line is 4 . On using the point slope form , we have ,

[tex]\implies y - y_1= m(x-x_1) \\\\\implies y-3 = 4(x-0) \\\\\implies y -3 = 4x \\\\\implies \boxed{ 4x - y + 3 =0}[/tex]

Hence the equation is 4x - y + 3 = 0

( for graph , see attachment ) .

Will give brainliest answer

Answers

Answer: Sin(©)=4/5

Step-by-step explanation: Cos(©)=3/5

Sin(©)=?

By Trigonometric identity,

Sin²(©) + Cos²(©) = 1

Sin²(©) = 1- Cos²(©)

Cos²(©) = (3/5)² = 9/25

Sin²(©) = 1- 9/25 = 16/25

Taking the root of both sides,

√(Sin²(©)) = √(16/25)

Hence, Sin(©) = 4/5

Hope it helps!

pls help pls help pls help pls help pls help

Answers

1. 4 + 5x = 16

2. (5-4)x = 16

3. 16 - 4x = 5

Round 0.8\0.6 to the nearest hundredth

Answers

Answer:

0.8/0.6=1.33333 and to the nearest hundredth is 1.33

10,858-150p = 9,650-110p

Answers

Answer:

9650-110p

Step-by-step explanation:

8x−5y=−11 solve for y and x intercept

Answers

X intercept 1.375
Y intercept -2.2
Here is the correct answer! Hope this helped

Write an equation of a line that is parallel to the graph of 2x-y=-1

Answers

Answer:

that contains the point (−4,4).

Step-by-step explanation:

d ko alam ko yn pero i think.

Point A has coordinates (-5, 3). If point (1,6) is
of the way from A to B what are the coordinates of point B?

Answers

Answer:

[tex](3, 7)[/tex]

Step-by-step explanation:

 (4/3)P -(4/3)A + A = B . . . . . . add A

 (4P -A)/3 = B . . . . . . . . . . . . . simplify

Then the coordinates of point B are ...

 B = (4(1, 6) -(-5, 3))/3 = (9, 21)/3

 B = (3, 7)

Kathy had $10 and gave half of it to her brother. She then gave a third of the remaining
amount to a friend. How much money will Kathy have left?

Answers

Kelly has $10

- half: $10 - 1/2 x $10

$10 - $5 = $5

- one third: $5 - 1/3 x $5

$5 - $1.6667... or $5 - $1 and 2/3 = $3.33... or $3 and 1/3 or $10/3

She will have left $3.33 left, or $3 and 1/3

PLS HELP WILL MARK BRAINLIEST

Answers

Answer:

1. Given

2. Given

3. Definition of perpendicular lines

4. Definition of midpoint

5. Reflexive property

6. SAS

Step-by-step explanation:

It's correct

Eduardo bought two heads of cabbage for
$1.80. How many heads can Maria buy if
she has $25.20?

Answers

Answer:

28

Step-by-step explanation:

two heads of cabbage is 1.80

1.80/2 = 0.90 per cabbage

25.20/.90 = 28

Maria can buy 28 heads of cabbage.

Answer:

maria can buy 28 cabbages

Step-by-step explanation:

$180×2=90

and

90×28 = 2,520

on adding to -7 to 0​

Answers

on adding to -7 to 0​

we get -7

Amelia needs to buy some dog food. At the nearest store, 5 bags of dog food cost $11.25. How much
would Amelia spend on 3 bags of dog food?
Amelia would spend $on 3 bags of dog food.

Answers

Answer:

$6.75

Step-by-step explanation:

find the cost of each individual bag

11.25 ÷ 5 = 2.25

multiply that by the amount of bags needed

2.25 × 3 = 6.75

Write 245.499 in word form.

Answers

Hey there!

• ORIGINAL FORMATION

245.499

• EXPANDED FORMATION

= 200 + 40 + 05 + 0.4 + 0.09 + 0.009

= 245.499

• EXPANDED EXPONENTIAL FORMATION

= 2 * 100 + 4 * 10 + 5 * 1 + 4 * 0.1 + 9 * 0.01 + 9 * 0.009

• WORD FORMATION

= “ two hundred forty-five and four hundred ninety-nine thousandths”

Therefore, your answer is:

“two hundred forty-five and four hundred ninety-nine thousandths“

Random fact: if you have decimal in a(n) equation, you’ll have to add “-th” at the end of the word when you’re turning/converting it to the word form of it. Decimals are BELOW 0 and they are LESS 1.

Good luck on your assignment and enjoy your day!

~Amphitrite1040:)

Mr. Cash bought d dollars worth of stock. During the first year, the value of the stock tripled. The next year, the value of the stock decreased by $1200. (a) Write an expression in terms of d to represent the value of the stock after two years. (b) If an initial investment is $1,000, determine its value at the end of 2 years.

Answers

Answer:

1. 3D-1200 = value after two years.

2. $1800 = value after two years

Step-by-step explanation:

When the value of D triples, 3 times D = 3D. value of the stock after two years decreased, would be the -1200.

When you get the value of 1,000 you can plug it in to get 3 (1000) - 1200 = Stock price after two years

HELP PLS ILL GIVE BRAINLIEST IF ITS A FAKE ANSWER ILL REPORT

Answers

Answer:

Step-by-step explanation:

yes

yes

no

no

The temperature at​ 8:20 P.M. is 3degreesC. If it has dropped 1degreesC per​ minute, what was the temperature at 7 : 50 ​P.M.?

Answers

Answer:

33°C

Step-by-step explanation:

The time between 8:20 and 7:50 is 30 minutes. If it drops 1°C per minute you multiply this number by the amount of minutes which would be 30. This becomes 30°C. Then add the 3° it's at now to become 33°C.

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