1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
igor_vitrenko [27]
3 years ago
15

Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the com

pany's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to grow at a constant rate of 6.00% a year; the price of the stock is $15.00 per share; the flotation cost for selling new shares is F
Business
1 answer:
spin [16.1K]3 years ago
6 0

Answer: 7.48%

Explanation:

Weighted Average Cost of capital is simply the weighted average of the costs of equity and debt.

Cost of Equity

= \frac{Next dividend}{Stock Price ( 1 - flotation Costs)} + growth rate

= \frac{0.65}{19(1 -0.1)} + 0.06

= 9.80%

Cost of debt

= Interest ( 1 - Tax)

= 0.075 (1 - 0.40)

= 4.65%

WACC = 9.80% * 0.55 + 4.65% * 0.45

= 7.48%

You might be interested in
What will be the resulting change in equilibrium of the chocolate bar market
myrzilka [38]

Equilibrium price will increase and quantity will decrease will be the resulting change in the equilibrium of the chocolate bar market.

The equilibrium charge is the rate at which the amount demanded equals the amount supplied. It's far decided through the intersection of the demand and deliver curves. A surplus exists if the amount of an excellent or carrier provided exceeds the amount demanded on the contemporary charge; it causes downward strain on the charge.

Equilibrium is the nation wherein market supply calls for balance every other, and as a result, costs come to be strong. Typically, an over-supply of goods or services causes expenses to move down, which results in a higher call for—while an underneath-deliver or shortage causes fees to head up resulting in less demand.

Upward shifts inside the supply and demand curves have an effect on the equilibrium rate and amount. If the deliver curve shifts upward, meaning deliver decreases however demand holds constant, the equilibrium rate will increase but the quantity falls.

Learn more about the Equilibrium price here brainly.com/question/26075805

#SPJ4

3 0
1 year ago
Per OSHA guidelines, the five major components of an effective safety and health program are: management commitment & hazard
Rainbow [258]

Answer:

Worksite Analysis

Explanation:

Based on the information provided within the question it can be said that the final major component of the OSHA guidelines are Worksite Analysis. This component refers to the various actions that provide all the information needed to help an individual recognize and understand all the dangers and potential hazards of the workplace environment.

4 0
3 years ago
In most cases, whether the contract has not yet been performed (an executory contract) or has been fully performed (an executed
Jlenok [28]

Answer: disaffirm

Explanation:

most cases, whether the contract has not yet been performed (an executory contract) or has been fully performed (an executed contract), the minor may disaffirm the contract.

It should be noted that a contract that is signed by a minor unless in some rare exceptions is normally void and therefore, the minor can disaffirm the contract.

8 0
3 years ago
What information is the buyer entitled to?
erastovalidia [21]

Answer:

notbuiseness

Explanation:

7 0
2 years ago
A ticket to a concert costs $45. You have a ticket and can resell it for $75. Your opportunity cost of actually attending the co
Amanda [17]

Answer:

$75

Explanation:

7 0
2 years ago
Other questions:
  • Which of the following is a severe and long-lasting economic downturn that is worse and deeper than a recession?
    10·1 answer
  • Support this statement using complete sentences: “Constructive criticism is offered in a way that encourages growth and learning
    13·1 answer
  • Beauty Inc. plans to maintain its optimal capital structure of 40 percent debt, 10 percent preferred stock, and 50 percent commo
    13·1 answer
  • A candy manufacturer is interested in the distribution of colors in each of its packages of candy sold. The manufacturer randoml
    5·1 answer
  • Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 2011, for $105,000 when the book value of Gates was $600,000
    7·1 answer
  • A consumer is 20 years old and expects to live to age 80. He has a current wealth of $100,000, an annual income of $100,000, and
    15·1 answer
  • Which of the following contributed to the financial crisis of 2008?
    15·1 answer
  • The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using the indirect method f
    5·1 answer
  • Investigations of money laundering are routinely performed by such agencies as the Federal Bureau of Investigation (FBI), DEA, a
    14·1 answer
  • If $500 cash and a $2,000 note are given in exchange for a delivery truck for use in a business?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!