Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.

Answers

Answer 1

Answer:

Explanation:

Question A) to C):

Calculation of Total Market Value, Capital Structure and WACC:

Excel Spreadsheet:

Finance homework question answer, step 1, image 1

Excel Workings:

Finance homework question answer, step 1, image 2

Answers:

The total market value is $2,394,000.

The capital structure weight of debt is 19.173%, preferred stock is 12.114% and common stock is 68.713%.

The WACC is 11.88%.


Related Questions

why is the leaf washed with distilled water​

Answers

To remove almost all of the sodium and minerals

Zoom In, Inc. is engaged in the business of coding, with an emphasis on Internet marketing, business apps, and intra-corporate networks. In all of Zoom In’s business activities, it is subject to United States laws and regulations. The basis for all law in the U.S. is _________.a. ​the U.S. Constitution.

b. ​the executive orders of the president.

c. ​each of the states' individual constitutions.

d. ​legislation enacted by Congress.

Answers

Answer:

Option A. The U.S. Constitution.

Explanation:

The reason is that the US constitution provides the basic framework for the laws to be formulated and passed both in the US National Assembly and the Senate. The laws cannot be formulated if the US constitution doesn't allows the passing of the law which means that the constitution must be amended first. When the slavery was to be eliminated in 1865, the first problem was that passing the elimination of slavery law was inconflict with the US constitution. So the constitution was amended before passing the law to eliminate the conflict.

In the nutshell, every law originates because of different reasons like Technological reasons, Social reasons, Cultural reason, etc) but the basis remains the same which is US constitution which is the basic framework for passing the law.

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