Kelompok Ii Tugas Kelompok Manajemen Keuangan Lanjutan No. P9-4
Kelompok Ii Tugas Kelompok Manajemen Keuangan Lanjutan No. P9-4
Kelompok Ii Tugas Kelompok Manajemen Keuangan Lanjutan No. P9-4
Cost of debt using the approximation formula for each of the following $1.000-par value bonds,
assuming annual interest payment and a 40% tax rate, calculate the after-tax cost maturity using the
approximation formula.
Answer :
ri = rd x (1 – T)
rd = $90 +
20
= $92,25 = 9,44 %
$955 + $1.000 $977,50
2
rd = $100 +
16
= $101,88 = 10,34 %
$970+ $1.000 $985
2
rd = $120 +
15
= $123 = 12,58 %
$955 + $1.000 $977,50
2
rd = $90 +
25
= $90,60 = 9,13 %
$985 + $1.000 $992,50
2
rd = $110 +
22
= $113,64 = 11,84 %
$920 + $1.000 $960
2
No. P9-5
The cost of debt Gronseth Drywall System,inc,, is in discussions with it’s investment bankers regarding
the issuance of new bonds. The investment banker has informed the firm that different maturities will
carry different coupon rates and sell at different prices. The firm must choose among several
alternatives. In each case, the bonds will have a $1,000 par value and flotation cost will be $30 per
bond. The company is taxed at a rate of 40%. Calculate the after-tax cost of financing with each of the
following alternatives.
ri = rd x (1 – T)
Cost of capital Edna Recording Studios, inc reported earning available to common stock of $4.200.000
last year. From those earning, the company paid dividend of $1.26 on each of it’s 1.000.000 common
share outstanding. The capital structure of the company includes 40% debt, 10% preferred stock, and
50% common stock. It is taxed at rate of 40 %.
a. If the market price of the common stock is $40 and dividends are expected to grow at a rate
of 60% per year for the foresebale future, what is the compan’s cost of retained earnings
financing ?
b. If underpricing and flotation costs on new shares of common stock amount to $7.00 per share,
what is the company’s cost of new common stock financing ?
c. The company can issue $2.00 dividend preferred stock for market price of $25.oo per shares.
Flotation cost would amount to $3.00 per share. What is the cost of preferred srock financing
?
d. The company can issue $1,000-par-value, 10 % coupon, 5 year bonds that can be sold for
$1.200 each. Flotation cost would amount to $25.00 per bond. Use the estimation formula to
figure the approximate cost of debt financing.
e. What id the WACC ?
Answer :
Rumus : Do + ( 1 + g )
rr = +g
p
$1,26 + ( 1 + 0,06 )
rr = + 0,06
$40,00
rr = $1,34
+ 0,06
$40,00
Rumus : Do + ( 1 + g )
rr = +g
P-f
$ 1.26 + ( 1 + 0,06 )
rr = + 0,06
$40,00 - $7,00
$ 1,34
rr = + 0,06
$ 33,00
Rumus : Dp
rp =
Np
rp = $ 2,00
$25,00 - $3,00
rp = $ 2,00
$25,00 - $3,00
D. Cost of Debt
Rumus : $1.000 - Nd
rd = I +
n
Nd + $1.000
ri = rd x (1 – T)
$1.000 -$ 1175
rd = $100 +
5
$ 1175 + $1.000
rd = $ 65, 00
$ 1087,50
rd = 5,98 %
-Breakpoint Equity :
No. P9- 19
Calculation of individual costs and WACC lang Enterprises is interested in measuring its overall cost
of capital. Current investigation has gathered the following data.
The firm is in the 40% tax bracket.
Debt the firm can raise debt by selling $1.000-par-value, 8% coupon interest rate, 20 year bonds on
which annual interest payments will be made. To sell the issue, an average discount of $30 per bond
would have to be given. The firm also must pay flotation costs of $30 per bond.
Preferred stock The firm can sell 8% preferred stock at its $95-per-share par value. The cost of issuing
and selling the preferred stock is expected to be $5 per share. Preferred stock can be sold under these
terms.
Common stock The firm’s common stock is currently selling for $90 per share. The firm expects to pay
cash dividends of $7 per share next year. The firm’s devidends have been growing at an annual rate
of 6%, and this growth is expected to continue into the future. The stock must be underpriced by $7
per share, and flotation costs are expected to amount to $5 per share. The firm can sell new common
stock under these terms.
Retained Earninngs When measuring this cost, the firm does not concern itself with the tax bracket
or brokerage fees of owners. It expects to have available. $100.000 of retained earnings in the coming
year, once these retained earnings are exhausted, the firm will use new common stock as the of
common stock equity financing.
a. Calculate the after-tax cost of debt
b. Culcalate the cost of preferred stock.
c. Calculate the cost of common stock.
d. Calculate the firm’s weighted average cost of capital using the capital structure weights shown
in the following in the following table. ( Rouns answer to the nearest)
Source of capital Weight
Prefferred stock 20
Total 100%
Answer:
rd = $80 +
20
02
$940 + $1.000
rd = $80 + $3
$970
= 8,56%
• ri = 8,58% x (1-0,40)
= 5,14 %
Rumus :
Dp
rp =
Np
rp = 8% x $95
$90
rp = $ 7,60
$90
rp = 8,44 %
C). Retained Earnings
Rumus : Di
rr = +g
Pₒ
rr = ($ 7,00) + 0,06
$90
rr = 0,0778 + 0,0600
= 0,1378 / 13,78 %
rn = ($ 7,00)
+ 0,06
( $90 - $7 - $ 5)
rn = ($ 7,00)
+ 0,06
( $78)
rn = 0,897 + 0,0600
= 0,1497 / 14,97%
- Breakpoint Equity =
WEquity 0,5
- WACC and WMCC =