• 100% Satisfaction Guarantee

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9513
Experience:  More than 5000 online tutoring sessions.
3708793
Manal Elkhoshkhany is online now

# Jan. 1 the total market value of the Tysseland Co. was \$60

### Resolved Question:

Jan. 1 the total market value of the Tysseland Co. was \$60 million. During the first year the company plans to raise & invest \$30 million in new projects. The firms present market value structure is considered to be optimal. Assume that there is no short-term debt: Debt \$30 million + common equity \$30 million = \$60 million total capital. New bonds will have a 8% coupon rate & they will be sold at par. Common stock is currently selling at \$30 a share. Stockholders' required rate of return expected constant growth rate of 8%. (the next expected dividend pymt is \$1.20, so \$1.20/\$30 = 4%) a. to maintain the present capital structure, how much of the new investment must be financed by common equity? the answer is \$15,000,000 how do I arrive at this number? b. Assume there is sufficient cashflow so the co. can maintain its target capital structure w/o issuing additional shares of equity. what is the WACC? answer is 8.4%, how do I arrive at this number?
Submitted: 6 years ago.
Category: Finance
Expert:  Manal Elkhoshkhany replied 6 years ago.

Hello and welcome to Just Answer

Kindly advise the name of the book you are using: Title, author's name, and edition

Thank you

Customer: replied 6 years ago.
11TH EDITION, FINANCIAL MANAGEMENT, EUGENE BRIGHAM & MICHAEL EHRNHARDT
Expert:  Manal Elkhoshkhany replied 6 years ago.

Thank you

P.S. If you like my work, please feel free to direct your future posts to me specifically by typing "For BusinessTutor" at the beginning of your post.

Please note that you did not type the tax rate, but I found the question and it stated that the tax rate is 40%

Regards,

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9513
Experience: More than 5000 online tutoring sessions.

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

### What Customers are Saying:

• I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
• I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
• I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
• Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
• Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
• Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
• This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
• Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

### Meet The Experts:

#### Satisfied Customers:

2073
Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >

#### Satisfied Customers:

2073
Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

### Manal Elkhoshkhany

#### Satisfied Customers:

1890
More than 5000 online tutoring sessions.

### Megan C

#### Satisfied Customers:

1755
Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level

### JKCPA

#### Satisfied Customers:

838
Bachelors degree and CPA with Accounting experience.

### Eric

#### Satisfied Customers:

558
Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

397

324