Business, 02.08.2019 22:10 hemaam8

Kuhn co. is considering a new project that will require an initial investment of $45 million. it has a target capital structure of 45% debt, 4% preferred stock, and 51% common equity. kuhn has noncallable bonds outstanding that mature in 15 years with a face value of $1,000, an annual coupon rate of 11%, and a market price of $1,555.38. the yield on the company's current bonds is a good approximation of the yield on any new bonds that it issues. the company can sell shares of preferred stockt hat pay an annual dividend of $8 at a price of $95.70 per share. you can assume that jordan does not incur any flotation costs when issuing debt and preferred stock. kuhn does not have any retained earnings available to finance this project, so the firm will have to issue new common stock to fund it. its common stock is currently selling for $33.35 per share, and its expected to pay a dividend of $1.36 at the end of the year. flotation costs will represent 3% of the funds raised by issuing new common stock. the company is projected to grow at a constant rate of 9.2%, and they face a tax rate of 40%. determine what kuhn company's wacc will be for this project. a. 8.65%b. 7.79%c. 8.22%d. 6.92%

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 02:30

On january 1, 2018, jay company acquired all the outstanding ownership shares of zee company. in assessing zee's acquisition-date fair values, jay concluded that the carrying value of zee's long-term debt (8-year remaining life) was less than its fair value by $21,600. at december 31, 2018, zee company's accounts show interest expense of $14,440 and long-term debt of $380,000. what amounts of interest expense and long-term debt should appear on the december 31, 2018, consolidated financial statements of jay and its subsidiary zee? long-term debt $401,600 $398,900 $401,600 $398,900 interest expense $17,140 $17,140 $11,740 $11,740 a. b. c. d.

Answers: 3

Answer

Business, 22.06.2019 11:00

Aprofessional does specialized work that's primarily: degree based. medical or legal. well paying. intellectual and creative

Answers: 2

Answer

Business, 22.06.2019 12:30

On june 1, 2017, blossom company was started with an initial investment in the company of $22,360 cash. here are the assets, liabilities, and common stock of the company at june 30, 2017, and the revenues and expenses for the month of june, its first month of operations: cash $4,960 notes payable $12,720 accounts receivable 4,340 accounts payable 840 service revenue 7,860 supplies expense 1,100 supplies 2,300 maintenance and repairs expense 700 advertising expense 400 utilities expense 200 equipment 26,360 salaries and wages expense 1,760 common stock 22,360 in june, the company issued no additional stock but paid dividends of $1,660. prepare an income statement for the month of june.

Answers: 3

Answer

Business, 22.06.2019 13:40

The cook corporation has two divisions--east and west. the divisions have the following revenues and expenses: east west sales $ 603,000 $ 506,000 variable costs 231,000 300,000 traceable fixed costs 151,500 192,000 allocated common corporate costs 128,600 156,000 net operating income (loss) $ 91,900 $ (142,000 ) the management of cook is considering the elimination of the west division. if the west division were eliminated, its traceable fixed costs could be avoided. total common corporate costs would be unaffected by this decision. given these data, the elimination of the west division would result in an overall company net operating income (loss)

Answers: 1

Answer

You know the right answer?

Kuhn co. is considering a new project that will require an initial investment of $45 million. it has...

Questions