Thanks Linda. How can upload my worok the questions are a bit long?
You can upload them here on site itself. Click here to see processor you can use file sharing website like www.box.com and once you upload the file, you can share the link here.
I posted here...
QM’s WACC is __________%(Round to three decimal places.)
Crypton’s cost of capital is ___________%. (Round to three decimal place).
Jowers’ WACC is _________%(Round to three decimal places)
Source of Capital
To finance the purchase, Ranch Manufacturing will sell 10-year bonds paying 7.4% per year at the market price of $1,039. Preferred stock paying a $1.98 dividend can be sold for $24.88. Common stock for Ranch Manufacturing is currently selling for $54.18 per share and the firm paid a $2.94 dividend last year. Dividends are expected to continue to grow at a rate of 4.7% per year into the indefinite future. If the firm’s tax rate is 30%, what discount rate should you use to evaluate the equipment purchase?
Ranch Manufacturing’s WACC is _______________________(Round to three decimal places).
· Plan A is an all-common-equity structure in which $2.4 million dollars would be raised by selling 90,000 shares of common stock
· Plan B would involve issuing $1.2 million dollars in long-term bonds with an effective interest rate of 12.1% plus $1.2 million would be raised by selling 45,000 shares of common stock. The debt funds raised under Plan B have no fixed maturity date, in that this amount of financial leverage is considered a permanent part of firm’s capital structure.
Plan B has no fixed maturity date, in that this amount of financial leverage is considered a permanent part of the firm’s capital structure.
Abe and his partners plan to use a 35% tax rate in their analysis, and they have hired you on a consulting basis to do the following:
The EBIT indifference level associated with the two financing plans is $______.(Round to the nearest dollar.)
Complete the segment of the income statement for Plan A below: (Round income statement amounts to the nearest dollar except the EPS to the nearest cent.)
Less: Interest Expense____________
Earnings Before Taxes $______________
Less: Taxes at 35%_____________________
Net Income $____________
Number of Common Shares_____________
Complete the segment of income statement for Plan B below. (Round income statement amounts to the nearest dollar except the EPS to the nearest cent)
The first (Plan A) is an all-common-equity capital structure. $2.5 million dollars would be raised by selling common stock at $20 per common share.
Plan B would involve the use of financial leverage. $1.3 million would be raised by selling bonds with an effective interest rate of 11.3%(per annum), and the remaining $ 1.2 million would be raised by selling common stock at the $20 price per share. The use of financial leverage is considered to be a permanent part of the firm’s capitalization, so no fixed maturity date is needed for the analysis. A 34% tax rate is deemed appropriate for the analysis.
The EBIT indifference level associated with the two financing plan is $____________(Round to the nearest dollar.)
Less: Taxes at 34%_____________________
The plan that will generate the higher EPS is Plan_____
Thanks Linda for your help. I will request you this week Wednesday or Thursday. I have finals in my finance class and would need help as well.