Question

In: Finance

Kindly solve using Excel Given the following information: Percent of capital structure:    Debt 30 %...

Kindly solve using Excel

Given the following information:


Percent of capital structure:

  

Debt 30 %
Preferred stock 15
Common equity 55

  

Additional information:  

Bond coupon rate 13%
Bond yield to maturity 11%
Dividend, expected common $ 3.00
Dividend, preferred $ 10.00
Price, common $ 50.00
Price, preferred $ 98.00
Flotation cost, preferred $ 5.50
Growth rate 8%
Corporate tax rate 30%


Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)
  

Solutions

Expert Solution



Related Solutions

Solve using excel: A. Given the following information, calculate the debt coverage ratio of this commercial...
Solve using excel: A. Given the following information, calculate the debt coverage ratio of this commercial loan. Estimated net operating income (NOI) in the first year: $150,000, Debt service in the first year: $100,000, Loan amount: $1,000,000, Purchase price: $1,300,000 B. Given the following information, calculate the loan-to-value ratio of this commercial loan. Estimated net operating income in the first year: $150,000, Debt service in the first year: $100,000, Loan amount: $1,000,000, Purchase price: $1,300,000 C. Given the following information,...
Given the following information: Percent of capital structure: Debt 35 % Preferred stock 20 Common equity...
Given the following information: Percent of capital structure: Debt 35 % Preferred stock 20 Common equity 45 Additional information: Bond coupon rate 15% Bond yield to maturity 12% Dividend, expected common $ 2.00 Dividend, preferred $ 9.00 Price, common $ 45.00 Price, preferred $ 148.00 Flotation cost, preferred $ 6.20 Growth rate 6% Corporate tax rate 35% Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations....
Given the following information. Percent of capital structure: Debt 10 % Preferred stock 5 Common equity...
Given the following information. Percent of capital structure: Debt 10 % Preferred stock 5 Common equity 85 Additional information: Bond coupon rate 13 % Bond yield 11 % Dividend, expected common $7.00 Dividend, preferred $14.00 Price, common $70.00 Price, preferred $110.00 Flotation cost, preferred $2.50 Corporate growth rate 4 % Corporate tax rate 30 % Calculate the weighted average cost of capital for Genex Corporation. Line up the calculations in the order shown in Table 11-1. (Do not round your...
You are provided the following information: Capital Structure: Debt                                &nbsp
You are provided the following information: Capital Structure: Debt                                         $    60000 Equity                                       $   180000 The firm sold 50 year; $ 1000 face value, 5% bonds 10 years ago. These bonds trade at $ 930. You expect the yield on these bonds to be a good proxy for the cost of issuing new bonds. The shares trade at $ 20; the growth rate is 6%. Dividends paid last year - $ 1.00. The firm has a 30% tax rate....
Your company is estimating its WACC. Its target capital structure is 30 percent debt, 10 percent...
Your company is estimating its WACC. Its target capital structure is 30 percent debt, 10 percent preferred stock, and 60 percent common equity. Its bonds have an 8 percent coupon, paid quarterly, a current maturity of 15 years, and sell for $895. The firm could sell, at par, $100 preferred stock which pays $10 annual dividend, but flotation costs of 5 percent would be incurred if the company will issue new preferred stocks. This company’s beta is 1.3, the risk-free...
Given the following information: Percent of capital structure: Preferred stock 20 % Common equity (retained earnings)...
Given the following information: Percent of capital structure: Preferred stock 20 % Common equity (retained earnings) 50 Debt 30 Additional information: Corporate tax rate 40 % Dividend, preferred $ 7.00 Dividend, expected common $ 3.50 Price, preferred $ 98.00 Growth rate 8 % Bond yield 10 % Flotation cost, preferred $ 3.40 Price, common $ 86.00 Calculate the weighted average cost of capital for Digital Processing Inc. (Do not round intermediate calculations. Input your answers as a percent rounded to...
Given the following information: Percent of capital structure: Preferred stock 20 % Common equity (retained earnings)...
Given the following information: Percent of capital structure: Preferred stock 20 % Common equity (retained earnings) 40 Debt 40 Additional information:      Corporate tax rate 24 % Dividend, preferred $ 8.50 Dividend, expected common $ 2.50 Price, preferred $ 105.00 Growth rate 7 % Bond yield 9.5 % Flotation cost, preferred $ 3.60 Price, common $ 75.00 Calculate the weighted average cost of capital for Digital Processing Inc. (Do not round intermediate calculations. Input your answers as a percent rounded...
Financial Management Chapter 9 Case CompU has a target capital structure of 30 percent debt and...
Financial Management Chapter 9 Case CompU has a target capital structure of 30 percent debt and 70 percent equity. It has $280,000 in retained earnings. CompU’s investment banking firm has advised them that they can issue $300,000 of secured debt. The $300,000 issue will consist of 10-year, $1,000 par value bonds that pay 9% and can be sold for $938.55. Flotation costs for debt is negligible and can be ignored. Flotation costs for new common stock are $1 per share;...
Rollins Corporation’s target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent...
Rollins Corporation’s target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,200 in the market now. The price of firm’s newly issued preferred stock is $100 and the flotation cost is 5 percent. The company pays an annual dividend of $12 to its preferred stockholders. Rollins' beta is 1.2, the risk‑free rate is 10 percent,...
(Weighted Average Cost of Capital) AnimalKing has a capital structure with 30% debt and 70% common...
(Weighted Average Cost of Capital) AnimalKing has a capital structure with 30% debt and 70% common stock. A debt issue of $1,000 face value with 12% coupon bonds, maturing in 15 years paying semiannual interest, will sell for $1,122.35. The cost of equity for the company is based on the CAPM and the following information: beta of 1.1, risk free treasury rate of 3% and market rate of 9%. What is AnimalKing’s cost of capital given a 20% tax rate?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT