The present value of interest tax shields on this debt is $76,000. 7. wacc whispering pines, inc., is all-equity-financed. the expected rate of return on the company’s shares is 12%. a. what is the opportunity cost of capital for an average-risk whispering pines investment? b. suppose the company issues debt, repurchases shares, and moves to a 30% debt-to-value ratio (d/v = .30). what will be the company’s weighted-average cost of capital at the new capital structure? the borrowing rate is 7.5% and the tax rate is 35%.

Which of the following statements accurately describes how costs and benefits are calculated?

The u.s. stock market has returned an average of about 9% per year since 1900. this return works out to a real return (i.e., adjusted for inflation) of approximately 6% per year. if you invest $100,000 and you earn 6% a year on it, how much real purchasing power will you have in 30 years?

Garfield corporation is considering building a new plant in canada. it predicts sales at the new plant to be 50,000 units at $5.00/unit. below is a listing of estimated expenses. category total annual expenses % of annual expense that are fixed materials $50,000 10% labor $90,000 20% overhead $40,000 30% marketing/admin $20,000 50% a canadian firm was contracted to sell the product and will receive a commission of 10% of the sales price. no u.s. home office expenses will be allocated to the new facility. the contribution margin ratio for garfield corporation is