Need Finance Homework Help? Ask an Expert

# To finance the purchase, Ranch Manufacturing will sell 10-year

bonds paying 6.6% per year...
To finance the purchase, Ranch Manufacturing will sell 10-year bonds paying 6.6% per year at the market value of the firm's capital structure as follows:
Bonds \$4,400,000
Preferred Stock \$2,500,000
Common Stock \$5,900,000

To finance the purchase, Ranch Manufacturing will sell 10-year bonds paying 6.6% per year at the market price of \$1,054. Preferred stock paying a \$1.95 dividend can be sold for \$25.76. Common stock for Ranch Manufacturing is currently selling for \$54.96 per share and the firm paid a \$2.91 dividend last year. Dividends are expected to continue growing at a rate of 4.6% per year into the indefinite future. If the firm's tax rate is 30%, what is their WACC?
Show More
Show Less
11/5/2013
linda_us, Master's Degree
Satisfied Customers: 7,291
Experience: A tutor for Business, Finance, Accounts and other related topics.
Verified

linda_us :

Welcome to the Site.

linda_us :

My name is XXXXX XXXXX I can help you with this quesiton.

linda_us :

I am working on it and will post the solution soon.

linda_us, Master's Degree
Satisfied Customers: 7,291
Experience: A tutor for Business, Finance, Accounts and other related topics.
Verified

Please rate my solution by clicking smiley face so that I get paid.

Let me know if you need any further help. You can request me in future by writing "FOR LINDA" at start of your post.
Customer reply replied 4 years ago
Hi Linda,

Thank you for your reply. Can you give me more detail on the bond calculation? I do not have a financial calculator and need to perform this calculation manually.

Thank you.
I have used the Rate formula in Excel. We can use the Approximate yield formula or long formula (where we equate cash inflows to cash outflows).

Refer this link for Approximate Yield formula

For long formula we will need to solve the following equations

1054 = 66/(1+r) + 66/(1+r)^2 + 66/(1+r)^3 + 66/(1+r)^4 + 66/(1+r)^5 + 66/(1+r)^6 + 66/(1+r)^7 + 66/(1+r)^8 + 66/(1+r)^9 + 66/(1+r)^10 + 1000/(1+r)^1000.

Solving by Approximate formula we give us a approximate result and will not be 100% accurate and solving by long formula is also a tedious process and we might have to try various figure (we still can make mistake or not arrive at correct answer).

I have done this questions atleast 50 time and even a small difference in answer (say .002%) would also be recognized as incorrect answer so the best way to solve is use excel or financial calculator.

I hope this helps. Let me know if you need any further clarification.
Customer reply replied 4 years ago

Got it. I see you put the formulas in the spreadsheet you provided. Thank you so much!

Customer reply replied 4 years ago

I have another question that I'd like you to help me learn the process of solving, if you're available.

I am available and would be happy to help.

You can create a new thread and write "FOR LINDA" at start of your post to request me.
linda_us, Master's Degree
Satisfied Customers: 7,291
7,291 Satisfied Customers
Experience: A tutor for Business, Finance, Accounts and other related topics.

linda_us is online now

A new question is answered every 9 seconds

• Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
• Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.

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:

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!!!!

AlexLos 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.

GPHesperia, CA

I couldn't be more satisfied! This is the site I will always come to when I need a second opinion.

JustinKernersville, NC

Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around.

EstherWoodstock, NY

Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know.

RobinElkton, Maryland

He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here.

DianeDallas, TX

< Previous | Next >

## Meet the Experts:

linda_us

Master's Degree

7,291 satisfied customers

A tutor for Business, Finance, Accounts and other related topics.

F. Naz

Bachelor's Degree

540 satisfied customers

Have completed B.COM and CA Finalist

Bizhelp

Accountant

260 satisfied customers

BA degree and Certified Public Accountant

214 satisfied customers

dasdasd

Mr. Gregory White

Master's Degree

211 satisfied customers

M.A., M.S. Education / Educational Administration

Brittany

Professional

30 satisfied customers

Dimitry K., Esq.

Doctoral Degree

19 satisfied customers

< Previous | Next >

Related Business and Finance Homework Questions
In the 1980s, when Congress developed the generous
In the 1980s, when Congress developed the generous depreciation methods called ACRS and MACRS, one justification was to encourage business investment in long-lived assets by accelerating much of the d… read more
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Read the attached document.After reading, post your answers and arguments to the following questions:What type of interaction do you see between McDonalds and the society? Consider the four components… read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
Read the attached document.Post your answers and arguments for the following questions. Views should be supported by argumentsWhat in your opinion is the best argument for CSR? Why? What in your opini… read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
Locate a recent annual report for a public company that
Locate a recent annual report for a public company that includes a disclosure note that describes an investment in a trading security. Explain why this company would report their investment as a tradi… read more
Expert
214 satisfied customers
Could you do variance analysis>? I have an assigment due on
on Variance analysis I need to provide notes on each line item… read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
This morning, the hair dryer of one of the students in this
This morning, the hair dryer of one of the students in this class broke. The student, Jane, discussed the problem with her older brother Dick.Dick: Hi, Jane. What happened to your hair dryer? Jane: It… read more
Expert
214 satisfied customers
This question is do today by 4pm. I am able to pay an
This question is do today by 4pm. I am able to pay an additional charge to get it completed asap. I have attached the questions below and the grading rubric. Please follow the directions closely. This… read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
For writer F. Naz. This assignment is due saturday 1/13 by
For writer F. Naz. This assignment is due saturday 1/13 by 6pm. I have attached the assignment page and grading rubric. Please read the directions and follow them closely. This is for a healthcare fin… read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
Complete assignment as follows: Record the transactions for
Complete assignment as follows: Record the transactions for May 1 through May 31 in a general Journal using the account names listed in the chart of accounts (red tab). Post the entries to general led… read more
Expert
214 satisfied customers
Business Law - Answer each of the following questions in a composition of 10 to 20 sentences:1. Discuss the difference between larceny, embezzlement, and robbery and give an example of each that would… read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
I will need to take the Ashworth College Semester Exam which
I will need to take the Ashworth College Semester Exam which is a series of 50 q's in 3hrs. Accounting. Can i get some help? … read more
Expert
214 satisfied customers
Is there a charge? I just want the answers to the final exam
is there a charge? JA: You just pay a \$5 deposit now and the rest only when you get a reply from the Tutor. All of this is 100% satisfaction guaranteed, so you can get a refund if you're not happy for… read more
GLENN
Master of Mathematics
343 satisfied customers
Use all of the three methods you have learned in class and
Use all of the three methods you have learned in class and take a weighted average of the three methods. Weights are subjective. (CAPM, DCF, bond-yield-plus-risk-premium) FOR TOYOTA MOTORS … read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
How much will it cost it is due at midnight. Compose a 4-6
Compose a 4-6 page report, double-spaced, on the following topic: If the Fed decides to raise interest rates next year, what effect would rising rates have upon the following: (1) Consumer financing for big-ticket items such as autos and homes; (2) the present and future values of annuities; (3) the NPV calculation; (4) the WACC; (5) corporate earnings ? … read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
What is the answer Marshall, Inc., produces three products
what is the answer Marshall, Inc., produces three products but weekly demand for the three products exceed the available amount of machine time. Following is information about each product: Product A … read more
Carter McBride
LLM
265 satisfied customers
It is an accounting questio (usa taX) need help with this
it is an accounting questio (usa taX) need help with this due by tomorrow . pls write answer question in separate document… read more
Expert
214 satisfied customers
Assignment 1. Plot in Excel the risky asset opportunity set
Assignment 1. Plot in Excel the risky asset opportunity set for Portfolios A & B. Hint: create the following table in excel assuming weights of portfolio A & B in 10 percentage point increments. Then … read more
F. Naz
Bachelor's Degree
CA Finalist & Completed B.com
540 satisfied customers
Manal, I see that you have previously helped someone answer
Hi Manal,I see that you have previously helped someone answer a tax return problem that is very similar to the one I am having trouble with. It is so similar that actually all of the same numbers, the… read more
Expert
214 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less