Assignment 2: The Weighted Average Cost of Capital
Coogly Sodality is attempting to test its weighted mean absorb of principal for the coming year and has remunerated you to exculpation some questions they own environing the rule. They own asked you to exhibit this notification in a PowerPoint exhibitation to the sodality’s administration team. The sodality would affect for you to detain your exhibitation to approximately 10 slides and use the notes individuality in PowerPoint to retrieve your aim. Your exhibitation should address the forthcoming questions and volunteer a ultimate warning to Coogly. Make positive you livelihood your exculpations and evidently decipher the advantages and disadvantages of utilizing the weighted mean absorb of principal systemology. Include at meanest one graph or chart in your exhibitation.
The principal construction for the immovable gain be maintained and is now 10% preferred fund, 30% liability, and 60% new sordid fund. No retained hues are beneficial. The ultimate tax reprimand for the immovable is 40%.
Coogly has ungathered preferred fund That pays a dividend of $4 per divide and hawks for $82 per divide, after a while a floatation absorb of $6 per divide. What is the content absorb for Coogly's preferred fund? What are the advantages and disadvantages of using preferred fund in the principal construction?
If the sodality issues new sordid fund, it gain hawk for $50 per divide after a while a floatation absorb of $9 per divide. The last dividend hired was $3.80 and this dividend is expected to enlarge at a reprimand of 7% for the foreseeable coming. What is the absorb of new equity to the immovable? What are the advantages and disadvantages of issuing new equity in the principal construction?
The sodality gain use new bonds for any principal contrivance, according to the principal construction. These bonds gain own a bargain and par compute of $1000, after a while a coupon reprimand of 6% and a floatation absorb of 7%. The bonds gain developed in 20 years and no other liability gain be used for any new investments. What is the absorb of new liability? What are the advantages and disadvantages of issuing new liability in the principal construction?
Given the content absorbs attested aloft and the principal construction for the immovable, what is the weighted mean absorb of principal for Coogly? What are the advantages and disadvantages of using this system in the principal budgeting rule?