Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a company has the following capital structure: d/e

A company has the following capital structure: D/E ratio = 0.27, Equity Beta = 0.94,...

80.2K

Verified Solution

Question

Finance

image
A company has the following capital structure: D/E ratio = 0.27, Equity Beta = 0.94, Cost of Debt = 5.8%. The CEO proposes a new leverage, expressed by a target D/E ratio of 0.76. What would be the firm's new WACC? Assume that the marginal tax rate is 40%, risk-free rate is 3.9%, market risk premium is 5.2%, and that debt is risk less. Enter your answer as a percentage, with 2 decimals, without the percentage "%" sign. For example, if you obtain an answer equal to 0.123456, that's 12.3456%, so enter 12.35

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

The vaporization of compound A is described by the given chemical equation. A(l)⟶A(g)ΔHvap∘=42.69 kJ/mol Calculate the entropy of...

Chemistry
Q

What is anatomically based alignment and how this technique may facilitate the development of simplified prosthetic alignment...

Medical Sciences
Q

b Give two processes which occur during interphase and which are necessary for nuclear division...

Biology
Q

What will happen if all of the frogs in a population die e frogs predators...

Biology
Q

Q16 A force acts on a 3 g particle in such a way that the...

Physics
Q

17 Denklemi e im kesi im bi iminde yaz n Ard ndan e imi ve...

Geometry
Q

22) What would the graph of the following inequality look like? *x?-4Open circle, arrow towards...

Basic Math
Q

(a) Find the vertex and axis of symmetry of the quadratic function. (b) Determine whether...

Basic Math
Q

A die is rolled twice. What is the probability of showing a 5 on both...

Basic Math
Q

Use the graph shown to find the following a The domain and range of the...

Algebra
Q

The value of a car is 27 300 It loses 12 of its value every...

Algebra
Q

Make journal entries for each of the following. a. $500,000 4% bond is issued at...

Accounting