subject
Business, 27.11.2019 22:31 alen919

Adams corporation is considering four average-risk projects with the following costs and rates of return
project ( $2,000, expected rate of return--16.00%
project ( $3,000, expected rate of return--15.00%
project (--$5,000, expected rate of return--13.75%
project ( $2,000, expected rate of return--12.50%
the company estimates that it can issue debt at a rate of rd = 10%, and its tax rate is 30%. it can issue preferred stock that pays a constant dividend of $3 per year at $40 per share. also, its common stock currently sells for $30 per share, the next expected dividend, d1, is $3.25, and the dividend is expected to grow at a constant rate of 4% per year. the target capital structure consists of 75% common stock, 15% debt, and 10% preferred stock.
what is the cost of each of the capital components? round your answer to two decimal places.
a. cost of %
b. cost of preferred stock %
c. cost of retained earnings %
d. what is adams' wacc? round your answer to two decimal places.
%

ansver
Answers: 1

Another question on Business

question
Business, 22.06.2019 01:50
Which statement below best describes george waring's approach to solving the problems of water-borne illness? a. waring is going with his "gut," because he believes that instincts and emotions are the best guides for action. b. waring efficiently and thoroughly lays out the case for why the problems are too large and overwhelming to be solved: people should just move out of cities back to their farms. c. waring has gathered the testimonies of people who live in densely populated areas in order to learn how they themselves have solved their problems. d. waring exhibits the industrial age's increased respect for and reliance on science and the scientific method.
Answers: 1
question
Business, 22.06.2019 03:50
Suppose that a worker in agland can produce either 10 units of organic grain or 2 units of incense per year, and a worker in zenland can produce either 5 units of organic grain or 15 units of incense per year. there are 20 workers in agland and 10 workers in zenland. currently the two countries do not trade. agland produces and consumes 100 units of grain and 20 units of incense per year. zenland produces and consumes 50 units of grain and no incense per year. if each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by a. 30 units of grain and 100 units of incense. b. 30 units of grain and 150 units of incense. c. 50 units of grain and 90 units of incense. d. 50 units of grain and 130 units of ince
Answers: 1
question
Business, 22.06.2019 10:00
Suppose an economy has only two sectors: goods and services. each year, goods sells 80% of its outputs to services and keeps the rest, while services sells 62% of its output to goods and retains the rest. find equilibrium prices for the annual outputs of the goods and services sectors that make each sector's income match its expenditures.
Answers: 2
question
Business, 22.06.2019 12:30
Suppose that two firms produce differentiated products and compete in prices. as in class, the two firms are located at two ends of a line one mile apart. consumers are evenly distributed along the line. the firms have identical marginal cost, $60. firm b produces a product with value $110 to consumers.firm a (located at 0 on the unit line) produces a higher quality product with value $120 to consumers. the cost of travel are directly related to the distance a consumer travels to purchase a good. if a consumerhas to travel a mile to purchase a good, the incur a cost of $20. if they have to travel x fraction of a mile, they incur a cost of $20x. (a) write down the expressions for how much a consumer at location d would value the products sold by firms a and b, if they set prices p_{a} and p_{b} ? (b) based on your expressions in (a), how much will be demanded from each firm if prices p_{a} and p_{b} are set? (c) what are the nash equilibrium prices?
Answers: 3
You know the right answer?
Adams corporation is considering four average-risk projects with the following costs and rates of re...
Questions
question
Geography, 10.12.2019 11:31
question
Biology, 10.12.2019 11:31
Questions on the website: 13722360