Assignment+Chapter+12

Assignment+Chapter+12 - What is its yield to maturity?...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Student Information First Name Last Name Student ID 123456 Textbook Questions Questions Answers 1 2 Question 10, What is the company's WACC? 3 4 5 6 Additional Questions Questions Answers 7 8 9 10 11 Question 4 - What is your best estimate of the company's cost of equity capital using the geometric growth rate? Question 12, b - What is the company's capital structure weight for bonds on a market value basis? Question 16, b - What rate should the firm use to discount the project's cash flows? Question 18 - Calculate the WACC for Parrothead Enterprises. Question 20 - What is the appropriate discount rate for the project? Treasuries yield 3.10% and the S&P 500 is expected to rise by 9.60%. What is the expected return for the Oracles of Zodiac's stock if its beta is 1.92? The Oracles of Zodiac has 2.20% coupon bonds with 9 years to maturity. They sell at 98.10% of face value.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: What is its yield to maturity? their bond issue. They have 2.72 million shares outstanding with a price of $50.00 on the exchange. What is the Debt/Equity ratio (in market value) for the Oracles of Zodiac? This question will require information from question 8. The Oracles of Zodiac face a corporate tax rate of 17.60%. What is its WACC? You will need your answers to questions 7, 8, and 9 to answer this question. Dirty Donuts face a corporate tax rate of 59.10%. Their capital structure is 15.90% preferred stock, 51.40% corporate stock, and 32.70% debt. Their investors in preferred stock expect a 6.80% rate of return, their investors in common stock expect a 9.70% rate of return, and their debtholders expect a 4.60% rate of return. What is their WACC?...
View Full Document

This note was uploaded on 11/04/2011 for the course FIN 101 taught by Professor Staff during the Fall '11 term at Texas State.

Ask a homework question - tutors are online