The writer is very fast, professional and responded to the review request fast also. Thank you.
Mr. Glass, the vice-president of finance of 21st Century Windows, Inc., has given you the following information
and has asked you to compute the weighted average cost of capital to be used for the analysis of a prospective project. The company currently has outstanding 30,000 10-year bonds with a 5.5 percent coupon rate and another 55,000 7-year bonds with a 3.5 percent coupon rate. The firm has been informed by its investment banker that bonds of equal risk and credit rating are now selling to yield 6.5 percent. The common stock has a price of $72 and an expected dividend of $3.50 per share. The firm’s historical payout ratio is 60 percent and its ROE is 15 percent. The preferred stock is selling at $68 per share and carries a dividend of $7.50 per share. The flotation cost is 3.2 percent of the selling price for preferred stock. The optimum capital structure is 25 percent debt, 30 percent preferred stock, and 45 percent common equity in the form of retained earnings. The corporate tax rate is 24 percent. What is the WACC of the firm ?
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more