The director for s corp. manufacturers of playground equipment, is considering a plan to expand production facilities in order to meet an increase in demand. he estimates that this expansion will produce a rate of return of 11%. the firm’s target capital structure calls for a debt/equity ratio of .8 . s corp has a bond issue outstanding for that will mature in 25 years and has a 7% annual coupon rate. the bonds are currently selling for $804. the firm has maintained a constant growth rate of 6%. s corp’s next expected dividend is $2(d1) and it current stock price is $40. its tax rate is 21%.
a. should it undertake the expansion?
b. calculate the cost of bonds.
c. calculate the cost of equity.
d. calculate the wacc
Answers: 1
Business, 22.06.2019 11:00, cranfordjacori
The role of the credit department includes: a. evaluating customers' credit applications to determine whether they meet the company's approval standards. b. approving all credit applications in order to avoid losing sales. c. collecting cash from customers. d. following unwritten approval standards for processing customers' credit applications.
Answers: 2
Business, 22.06.2019 23:00, shifaxoxoxo
What is the purpose of the us international trade association?
Answers: 2
Business, 23.06.2019 00:00, JayceMeyers06
The undress company produces a dress that women use to quickly and easily change in public. the company is just over a year old and has been successful through a kickstarter campaign. the undress company has identified a customer segment, but if it wants to reach a larger customer segment market outside of the kickstarter family, what question must it answer?
Answers: 1
The director for s corp. manufacturers of playground equipment, is considering a plan to expand prod...
Health, 12.05.2021 19:50
Mathematics, 12.05.2021 19:50
Mathematics, 12.05.2021 19:50
Mathematics, 12.05.2021 19:50
Chemistry, 12.05.2021 19:50