Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. buray corporation, whose target capital structure

Buray Corporation, whose target capital structure is 30% debt, 10% preferred, and 60% common equity,...

80.2K

Verified Solution

Question

Finance

image

Buray Corporation, whose target capital structure is 30% debt, 10% preferred, and 60% common equity, is calculating its cost of capital for capital budgeting purposes. Buray has 1.2 Beta, risk free rate is 4% in the market and market risk premium is 5%. The before-tax cost of debt is 10%, and the tax rate is 30%. Its preferred stock has been paying $5 dividend per year and its current market price is $70. What is the company's WACC if all the equity used is from retained earnings? 14.34% 6.4% 9.43% 8.81%

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

What characteristics make a social group eusocial

Biology
Q

For each molecule or ion below, indicate whether it is polar or nonpolar. For polar...

Chemistry
Q

Write a 6-8 page, research-driven essay addressing one of the prompts listed below. 3) Stevenson believes that...

Psychology
Q

Why do people get married? Quite contrary to what books, films, songs, and TV dramas tell...

Psychology
Q

How does the theory of dramatic inflation when the universe was extremely young help astronomers...

Physics
Q

Find the value that makes the ratios equal 90 OA 10 OB 27 OC 9...

Geometry
Q

Determine the domain and range of the following parabola f x 2 x 6 5...

Calculus
Q

A glass bead has the shape of a rectangular prism with a smaller rectangular prism...

Algebra
Q

, which results from providing insufficient contributions of money and other property in relation to...

Accounting
Q

4. Based on the following data, what are total assets? Accounts payable...... Accounts receivable... Cash...........

Accounting
Q

Mrs. Stuart paid the following taxes: ...

Accounting
Q

A friend offered you an investment opportunity that will pay you $12000 first year, $14000...

Finance