Business, 13.12.2019 01:31 karmaxnagisa20

Cde inc.'s current (and optimal) capital structure is 40% debt, 10% preferred stock, and 50% common equity. cde is in the 40% tax bracket. the company can issue up to $20,000,000 in new bonds at par with a 7% coupon rate; any subsequent amount must carry a 2% premium to compensate investors for added risk. a new issue of preferred stock would pay an annual dividend of $4.00 and be priced to net the company $50.00 per share after the $3.00 per share floatation cost. the firm has $21,000,000 in change in retained earnings for the current period. cde's common stock trades at $40.00 per share and the expected dividend on the common stock at t1 is 2.00. floatation costs on a new common stock issue is $5.00 per share. the company is growing at 7% per year. what is the debt break point in the marginal cost of capital (mcc) schedule?

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 20:30

What is the most important type of decision that the financial manager makes?

Answers: 2

Answer

Business, 21.06.2019 21:40

The board of directors is the highest ranking body in a corporation, and the chairman of the board is the highest ranking individual. the ceo generally works under the board and its chairman, and the board generally has the authority to remove the ceo under certain conditions. the ceo, however, cannot remove the board, but he or she can endeavor to have the board voted out and a new board voted in should a conflict arise. it is possible for a person to simultaneously serve as ceo and chairman of the board, though many corporate control experts believe it is bad to vest both offices in the same person. true false

Answers: 3

Answer

Business, 22.06.2019 02:20

Larissa has also provided the following information. during the year, the company raised $36 million in new long-term debt and retired $20.52 million in long-term debt. the company also sold $22 million in new stock and repurchased $32.4 million. the company purchased $54 million in fixed assets, and sold $6,107,400 in fixed assets. larissa has asked dan to prepare the financial statement of cash flows and the accounting statement of cash flows. she has also asked you to answer the following questions: 1. how would you describe east coast yachts' cash flows? 2. which cash flows statement more accurately describes the cash flows at the company? 3. in light of your previous answers, comment on larissa's expansion plans.

Answers: 2

Answer

Business, 22.06.2019 03:10

Transactions that affect earnings do not necessarily affect cash. identify the effect, if any, that each of the following transactions would have upon cash and net income. the first transaction has been completed as an example. (if an amount reduces the account balance then enter with negative sign preceding the number e.g. -15,000 or parentheses e.g. (15, cash net income (a) purchased $120 of supplies for cash. –$120 $0 (b) recorded an adjustment to record use of $35 of the above supplies. (c) made sales of $1,370, all on account. (d) received $700 from customers in payment of their accounts. (e) purchased equipment for cash, $2,450. (f) recorded depreciation of building for period used, $740. click if you would like to show work for this question: open show work

Answers: 3

Answer

You know the right answer?

Cde inc.'s current (and optimal) capital structure is 40% debt, 10% preferred stock, and 50% common...

Questions