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Need help solving these questions for Finance practice. Please show steps. Thank-you.?
MV Corporation has debt with market value of $98 million, common equity with a book value of $95 million, and preferred stock worth $18 million outstanding. Its common equity trades at $46 per share, and the firm has 6.2 million shares outstanding. What weights should MV Corporation use in its WACC?
The debt weight for the WACC calculation is_______% (Round to two decimal places.)
Book Co. has 1.3 million shares of common equity with a par (book) value of $1.40, retained earnings of $28.4 million, and its shares have a market value of $51.96 per share. It also has debt with a par value of $21.9 million that is trading at 103% of par.
a. What is the market value of its equity?
b. What is the market value of its debt?
c. What weights should it use in computing its WACC?
Aluminum maker Alcoa has a beta of about 1.96, whereas Hormel Foods has a beta of 0.46. If the expected excess return of the market portfolio is 5%, which of these firms has a higher equity cost ofcapital, and how much higher is it?
Alcoa's equity cost of capital is_____%. (round to two decimal places.)
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