Average Cost Of Retaining Wall Please Help! I Need Help To Compute Weighted Averate Cost Of Capital?
Please help! I need help to compute weighted averate cost of capital? - average cost of retaining wall
Rolodex Inc. wants to estimate their average cost of capital for the coming year. The plans for investment planning retrieval of funds totaling 200 million U.S. dollars for the next year. These funds were from the long-term debt, preferred stock and common stock will be levied in proportion to its value in the company's balance sheet shown below:
Rolodex Inc. Balance Sheet (in millions)
Current Assets $ 110 $ 30 Accounts payable
Assets $ 260 Other current liabilities 20
Total assets $ 370 Long-term debt 128
32 Preferred Stock
(In stock 20 million shares of common stock at par value) 20
Paid-up capital of more than PAR 30
110 Retained earnings
Total liabilities and shareholders' equity $ 370
The discussions between the financial liability of the company and investment firms and banks have the following information:
• Rolodex maximum borrowing of $ 80 million from the bank at a pre-tax cost of 13%
• Preferred Stock May will be issued on a cost before tax of 16.5%;
• Rolodex expected to generate $ 140 million in net income. Any revenue left after the meeting in the capital of 200 million budget for investment will pay dividends in the form of
• The risk of return is 5.5%. The premium for market risk as a rate of 10% and Rolodex's beta is defined estimated to be 1.2
• marginal tax rate of 40% Rolodex
Compute Rolodex's weighted average cost of capital for the next year
1 comments:
Hey, your own homework! ;)
Check simplify finances on such things.
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