Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of $2.00 last year to its shareholders and plans to increase the dividend annually at the rate of 4.0%. It currently has 1,000,000 common shares outstanding. The shares currently sell for $11 each. Easy Car Corp. also has 10,000 semiannual bonds outstanding with a coupon rate of 10%, a maturity of 20 years, and a par value of $1,000. The bonds currently have a yield to maturity (YTM) of 9%. What is the weighted average cost of capital (WACC) for Easy Car Corp. if the corporate tax rate is 30%?

When answering this problem enter your answer using percentage notation but do not use the % symbol and use two decimals (rounding). For example, if your answer is 0.10469 then enter 10.47; if your answer is 10% then enter 10.00

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of $4.00 last year to its shareholders and plans to increase the dividend annually at the rate of 3.0%. It currently has 1,000,000 common shares outstanding. The shares currently sell for $13 each. Two years ago, Easy Car Corp. issued 40,000 semiannual 20-year bonds with a coupon rate of 8% and a par value of $1,000. The bonds currently have a yield to maturity...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of $3.00 last year to its shareholders and plans to increase the dividend annually at the rate of 5.0%. It currently has 2,000,000 common shares outstanding. The shares currently sell for $12 each. Five years ago, Easy Car Corp. issued 50,000 semiannual 28-year bonds with a coupon rate of 10% and a par value of $1,000. The bonds currently have a yield to maturity...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of $3.00 last year to its shareholders and plans to increase the dividend annually at the rate of 3.0%. It currently has 1,000,000 common shares outstanding. The shares currently sell for $17 each. Two years ago, Easy Car Corp. issued 40,000 semiannual 28-year bonds with a coupon rate of 9% and a par value of $1,000. The bonds currently have a yield to maturity...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of $4.00 last year to its shareholders and plans to increase the dividend annually at the rate of 5.0%. It currently has 2,000,000 common shares outstanding. The shares currently sell for $11 each. Five years ago, Easy Car Corp. issued 10,000 semiannual 21-year bonds with a coupon rate of 8% and a par value of $1,000. The bonds currently have a yield to maturity...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of $4.00 last year to its shareholders and plans to increase the dividend annually at the rate of 4.0%. It currently has 2,000,000 common shares outstanding. The shares currently sell for $10 each. Five years ago, Easy Car Corp. issued 10,000 semiannual 21-year bonds with a coupon rate of 9% and a par value of $1,000. The bonds currently have a yield to maturity...

Easy Car Corp. is a grocery store located in the southwest. It paid an annual dividend...

Easy Car Corp. is a grocery store located in the southwest. It paid an annual dividend of $10.00 last year to its share holders and plans to increase the dividend annualy at a rate of 4.0% forever. It currently has 600.00 common shares outstanding. The shares currently sell for $50 each. Easy Car Corp. also has 20,000 semi annual bonds outstanding with coupon rate of 8.9141%, a maturity of 26years, and a par value of 1,000. The bonds currently have...

Tix Corp. is a grocery store located in the Southwest. It paid an annual dividend of...

Tix Corp. is a grocery store located in the Southwest. It paid an annual dividend of $2.00 last year to its shareholders and plans to increase the dividend annually at the rate of 3.0%. It currently has 1,000,000 common shares outstanding. The shares currently sell for $13 each. Four years ago, Tix Corp. issued 40,000 semiannual 22-year bonds with a coupon rate of 7% and a par value of $1,000. The bonds currently have a yield to maturity (YTM) of...

Tix Corp. is a grocery store located in the Southwest. It paid an annual dividend of...

Tix Corp. is a grocery store located in the Southwest. It paid an annual dividend of $3.00 last year to its shareholders and plans to increase the dividend annually at the rate of 5.0%. It currently has 1,000,000 common shares outstanding. The shares currently sell for $12 each. Four years ago, Tix Corp. issued 50,000 semiannual 27-year bonds with a coupon rate of 6% and a par value of $1,000. The bonds currently have a yield to maturity (YTM) of...

Easy Car Corp. is a grocery store located in the Southwest. Next year dividend is $2.00...

Easy Car Corp. is a grocery store located in the Southwest. Next year dividend is $2.00 and plans to increase the dividend annually at the rate of 3.0%. It currently has 1,000,000 common shares outstanding. The shares currently sell for $10 each. Two years ago, Easy Car Corp. issued 40,000 semiannual 20-year bonds with a coupon rate of 8% and a par value of $1,000. The bonds currently have a yield to maturity (YTM) of 11%. What is the weighted...

Easy Car Corp. is a grocery store located in the Southwest. It plans to pay an...

Easy Car Corp. is a grocery store located in the Southwest. It plans to pay an annual dividend of $3.00 next year to its shareholders and plans to increase the dividend annually at the rate of 3.0%. It currently has 1,000,000 common shares outstanding. The shares currently sell for $18 each. Easy Car Corp. also has 10,000 semiannual bonds outstanding with a coupon rate of 6%, a maturity of 24 years, and a par value of $1,000. The bonds currently...

Subjects