Business, 10.08.2021 03:40, mriffell11

Delta Corporation has the following capital structure: Cost (aftertax) Weights Weighted Cost

Debt (Kd) 8.6% 10% 0.86%
Preferred stock (Kp) 6.8 20 1.36
Common equity (Ke) (retained earnings) 10.2 70 7.14
Weighted average cost of capital (Ka) 9.36%
a. If the firm has $49 million in retained earnings, at what size capital structure will the firm run out of retained earnings?
b. The 8.6 percent cost of debt referred to earlier applies only to the first $9 million of debt. After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt?

Answers: 1

Show answers

Other questions on the subject: Business

Business, 20.06.2019 18:04, Aviannakelly

Consider the country of morrow which is currently operating at full employment. suppose there is a decrease in investment

Answers: 1

continue

Business, 21.06.2019 22:30, ericlawton

Abusiness cycle reflects in economic activity, particularly real gdp. the stages of a business cycle

Answers: 2

continue

Business, 22.06.2019 16:30, ggggggggv24

On april 1, the cash account balance was $46,220. during april, cash receipts totaled $248,600 and the april 30 balance was $56,770. determine the cash payments made during april.

Answers: 1

continue

Business, 22.06.2019 19:10, lizzlegnz999

After the price floor is instituted, the chairman of productions office buys up any barrels of gosum berries that the producers are not able to sell. with the price floor, the producers sell 300 barrels per month to consumers, but the producers, at this high price floor, produce 700 barrels per month. how much producer surplus is created with the price floor? show your calculations.

Answers: 2

continue

Do you know the correct answer?

Delta Corporation has the following capital structure: Cost (aftertax) Weights Weighted Cost
...