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linda_us, Master's Degree
Category: Single Problem
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Experience:  A tutor for Business, Finance, Accounts and other related topics.
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HCA manufactures parts and accessories used to customize

Customer Question

HCA manufactures parts and accessories used to customize Harleys. ITs products are sold through specialy stores, Harley dealerships and Walmart and Sears. The firm has a well-designed capital structure and a corporate tax rate of 40$ given the detailed info below what is HCA weighted average cost of capital?
A)DEBT- HCA had 60,000 bonds outstanding; currently trade at 109.5, have 20 yrs to maturity, and bear a coupon rate f 6%. Six years ago, the firm also issued 230,000 zero coupon bonds. when they were issued, they had 36 yrs to maturity; today they trade at 17.5
B)COMMON STOCK- when HCA did its IPO 9 yrs ago, the firm issued 2.6 million shares of common stock. The Wall street journal reports that HCA's Common Shares have a BETA of 1.15 the shares initially traded at $18.10 per share, trade today on NYSE at $65. and have a par value of $3.40 per share.
C)Preferred stock-5 yrs ago HCA issues 83,470 preferred shares.2 yrs ago the firm issues another 40,110 prefe.shares. LAst month he firm issued an additional 26,420 of these 4% preferred shares.though they have a book value of $100 they currently trade at $79.
D) Market Info- The market return is currently 11% and the market risk premium is 7%. utilize this info to determine the relevant risk free rate for the U.S. market
Submitted: 1 year ago.
Category: Single Problem
Expert:  F. Naz replied 1 year ago.


Please mention your deadline, thanks.

Customer: replied 1 year ago.
I need it by 6am PST the latest. I hope to use your example to complete the rest of my assignment. I am having a really hard time with this class. Thank you.
Expert:  F. Naz replied 1 year ago.

How many hours remaining in that?

Customer: replied 1 year ago.
8:30 am I still don't have your response. How much longer do you need?
Expert:  F. Naz replied 1 year ago.

Please accept the offer, so answer may be provided in next 1 to 2 hours, thanks.

Customer: replied 1 year ago.
No. I am not paying more.I wanted the answer by 6am.
Expert:  F. Naz replied 1 year ago.

I am not asking more just additional 5 dollar to make the answer private, do you still need the answer.

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