changing the capital structure
THARRIS111Company X is considering changing its capital structure in light of the tough business environment. Currently, Company X’s total capital consists of:
- $950 million in debt
- $20 million in leased assets
- $500 million of preferred stock
- $900 million in common stock
- $750 million in retained earnings
The debt coupon is 8% and tax rate is 40%, while the current preferred share price is $96.20 and the dividend per share is $9.
The company's common stock is trading at $25.50, its dividend payout this year is $1.15, and the growth rate of the dividend is 8.5%.
Leases are at an average cost of 8%.
- Find the weighted average cost of capital given the data above.
- If Company X wants to change its capital structure (i.e., lower its WACC), what should it do?
12 years ago
3
Answer(1)![blurred-text]()
Purchase the answer to view it
NOT RATED
company_x.xlsx
Bids(0)
other Questions(10)
- Some fast food restaurants have taken the cue from manufacturing companies and begun to use the concept of cellular manufacturing to set up their food preparation process.
- MGT 325 - FINANCE FOR MANAGERS
- 4x+3y=6 5x-3y=21
- Rundles,Kreiger, and Larson formed a partnership to breed and show horses. Rundles and Kreiger each contributed $25,000 to the partnership. Larson contributed four(4) horses valued at 25,000. The partnership agreement provided that the partners would shar
- Human Resource Management
- ART 101 full course
- sociology analysis paper
- Exponential Growth. Need done soon!!
- j
- 6 Accounting Questions!
