Business, 16.04.2020 21:03 josue718

Problem 1 (each part is ½ point) Rollins Corporation is estimating its weighted average cost of capital (WACC). Its target capital structure is 30% debt, 20% preferred stock and 50% common equity. A. Rollins bonds will have a coupon rate of 12%, a par value of $1,000 and 20 years to maturity. The price of the bond is $1,244.03 B. The firm can sell a preferred stock with a dividend of $10. The price of the preferred stock is $80 per share. C. Rollins beta is 2, the risk free rate is 1% and the market risk premium is 8%. D. Rollins last dividend was $2, a growth rate of 10% and common stock is priced at $22. E. Rollins can sell new common stock for $22 per share. F. Tax rate is 40%.

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 09:50

For each of the following users of financial accounting information and managerial accounting information, specify whether the user would primarily use financial accounting information or managerial accounting information or both: 1. sec examiner 2. bookkeeping department 3. division controller 4. external auditor (public accounting firm) 5. loan officer at the company's bank 6. state tax agency auditor 7. board of directors 8. manager of the service department 9. wall street analyst 10. internal auditor 11. potential investors 12, current stockholders 13. reporter from the wall street journal 14. regional division managers

Answers: 1

Answer

Business, 22.06.2019 18:00

Bond j has a coupon rate of 6 percent and bond k has a coupon rate of 12 percent. both bonds have 14 years to maturity, make semiannual payments, and have a ytm of 9 percent. a. if interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds?

Answers: 2

Answer

Business, 22.06.2019 20:30

Casey communications recently issued new common stock and used the proceeds to pay off some of its short-term notes payable. this action had no effect on the company's total assets or operating income. which of the following effects would occur as a result of this action? a. the company's current ratio increased.b. the company's times interest earned ratio decreased.c. the company's basic earning power ratio increased.d. the company's equity multiplier increased.e. the company's debt ratio increased.

Answers: 3

Answer

Business, 23.06.2019 06:00

If a society decides to produce consumer goods from its available resources, it is answering the economic question

Answers: 1

Answer

You know the right answer?

Problem 1 (each part is ½ point) Rollins Corporation is estimating its weighted average cost of capi...

Questions