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Bizhelp
Bizhelp, CPA
Category: Single Problem
Satisfied Customers: 5884
Experience:  BA degree and Certified Public Accountant
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The target capital structure for QM industries is 37% common

Resolved Question:

The target capital structure for QM industries is 37% common stock, 9% perferred stock, and 54% debt. If the cost of common equity for the firm is 18.8%, the cost of perferred stock is 10.1%, the besfore tax cost is 7.2%, and the firms tax rate is 35%, what is QM's weighted average cost per capital?
Submitted: 4 years ago.
Category: Single Problem
Expert:  Bizhelp replied 4 years ago.
Hi,

Thanks for the question.

Please click here for the solution.


Hope this helps!
Customer: replied 4 years ago.
I am choosing not to look at the answer to this problem justyet I am unfamiliar with the site and how it works. I am not willing to pay $30 for one single answer, I have 12 that I need assistance with are you willing to help with the other 11 problems? thank you
Customer: replied 4 years ago.
Ok so out of curiousity to check the answer and I did and when I submited the answer here is the reply I got: YSorry! Your answer is incorrect. Correct answer 10.392 :(
Expert:  Bizhelp replied 4 years ago.
Hi,

Yes, I am willing to help with all the questions if you agree to post one or two at a time.
It appears that you are on a subscription basis, so you should not be charged for each question.

The difference is because I used 2 decimal places to get the answer of 10.39%. The question did not specify to round to 3 decimal places. I will change the rounding to 3 decimal places in the answer file, you will see it is the same.
Customer: replied 4 years ago.
Ok great I can post them how much time do you have and how fast can u answer them? It will only allow me to post and answer one at a time on my computer but I need to have them asap? Thanks
Customer: replied 4 years ago.
Crypton Electronics Has a capital structure consisting of 44% common stock and 56% debt. A debt issue of $1,000 par value, 6.4% bonds that mature in 15 years and pay annual interest will sell for $976. Common stock of the firm is currently selling for $29.69 per share and the firm expects to pay $2.23 dividend next year. Dividends have grown at the rate of 4.6% per year and are expected to continue to do so for the foreseeable future. What is Cryptons cost of capital where the firms tax rate is 30%
Expert:  Bizhelp replied 4 years ago.
Hi,

Sorry for the delay, the website was down. It usually takes me anywhere from 15min-30min per question. I am available from now to 11pm or so.

Please click here for the answer to the last problem.


Please remember to click "Accept" after each answer, so that I may receive credit for my work.

Hope this helps!


Bizhelp and 3 other Single Problem Specialists are ready to help you
Customer: replied 4 years ago.
ok great thank you
Customer: replied 4 years ago.

Crypton Electronic has a capital structure consisting of 36% common stock and 64% debt. A debt is issued of $1,000 par value, 5.9% bonds that mature in 15 years and pay annual interest will sell for $972. Common stock of the firm is currently selling for $30.02 per share and the firm expects to pay a $2.34 divedend next year. Dividends have grown at the rate of 5.4% per year and are expected to continue to do so for the forseeable futures. What is Cryptons cost of capital where the firms tax rate is 30%

Expert:  Bizhelp replied 4 years ago.
Hi,

Thanks for the question.

Please click here for the answer.

Hope this helps!


Customer: replied 4 years ago.
I just submited the 7.460% and it says its incorrect :( I only have 2 more submissions or I will get it wrong each problem allows 3 guesses now what?
Expert:  Bizhelp replied 4 years ago.
Hi,

Sorry, had a small typo on the stock price I have updated the answer file. It should be 7.524%.
Customer: replied 4 years ago.
Much Better! Thx Next one. . . .
Customer: replied 4 years ago.
The target capital structure for Jowers Manufacturing is 49% common stock, 11% perferred stock, and 40% debt. If the cost of common equity for the firm is 20.4%, the cost of perferred stock is 11.2%, and beforetax cost of debt is 10.2%, what is Jowers cost of capital The firms tax rate is 34%.
Expert:  Bizhelp replied 4 years ago.
Hi,

Please click here for the answer.


Please remember to click "Accept" after each answer, so that I may receive credit for my work.

Hope this helps!
Customer: replied 4 years ago.

Ok it keeps wanting me to pay $30 for each accepted answer but you said you could help with all, not sure what you want me to do? Here is the next problem:

 

As a member of the Finance Department of Ranch manufacturing, your supervisor has asked you to compute the appropriate discount rate to use when evaluationg the purchase of new packaging equiptment for the plant. Under the assumption that the firms present capital structure reflects the appropriate mix of capital sources for the firm, you have to determine the market value of the firms capital structure as follows: Bonds - $4,100,000 Perferred Stock - $2,500,000 Common Stock- $6,500,000. to finance the purchase, Ranch Manf. will sell 10 year bonds paying 7.2% per year at the market price of $1072. perferred stock paying a $1.98 dividend can be sold for $25.07. Common stock for Ranch Manf. is currently selling for %55.43 per share and the firm paid a $3.06 dividend last year. Dividends are expected to continue growing at rate of 4.8% per year into the indefinate future. If the firms tax rate is 30% , what discount rate should you use to evaluate the equiptment purchase? Ranch Manf. WACC is what % (Round to 3 decimals)

Expert:  Bizhelp replied 4 years ago.
I believe you are on a subscription, so you should not be charged for each "Accept". I will not be able to continue helping you until I receive another Accept. I will refer your question concerning billing to customer service. They should be able to tell you if you are paying for each question or for each billing period.

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