Corporate Finance Assignment/ Professional Essay Writers

1. Honda is considering increasing production after an unexpected strong demand for its new motorbike. To evaluate the proposal, the company needs to calculate its cost of capital. You' ve collected the following information:

Don't use plagiarized sources. Get Your Assignment on
Corporate Finance Assignment/ Professional Essay Writers
Just from $13/Page
Order Now

The company wants to maintain its current capital structure, which is 30% equity, 20% preferred stock and 50% debt.

The firm has a marginal tax rate of 34%.

The firm's preferred stock pays an annual dividend of $4.6 forever, and each share is currently worth $135.26.

The firm has one bond outstanding with a coupon rate of 6%, paid semi-annually, 10 years to maturity and a current price of $928.94.

New preferred stock and bonds would be issued by private placement, largely eliminating flotation costs.

Honda's beta is 0.4, the yield on Treasury bonds is 2.6% and the expected return on the market portfolio is 6%.

The current stock price is $48.88. The firm has just paid an annual dividend of $1.41, which is expected to grow by 4% per year.

The firm uses a risk premium of 3% for the bond-yield-plus-risk-premium approach.

New equity would come from retained earnings, thus eliminating flotation costs.

APA 7th edition

a) What is the (pre-tax) cost of debt?

b) What is the cost of preferred stock?

c) What is the cost of equity using the CAPM?

d) What is the cost of equity using the discounted dividend model?

e) What is the cost of equity using the bond yield plus risk premium?

f) What is your best guess for the cost of equity if you think all three approaches are equally valid?

g) What is the company's WACC?  Get Finance Help Today

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
excellent work
Customer 456821, August 14th, 2022
Health Care
Thank you so much!
Customer 454001, March 8th, 2020
Environmental studies and Forestry
Good work.
Customer 458115, May 29th, 2022
Business and administrative studies
Customer 459947, April 6th, 2022
Excellent job
Customer 456821, November 30th, 2022
Business and administrative studies
This was by far one of the best that I have received!
Customer 453375, April 22nd, 2022
so professional
Customer 463461, October 10th, 2022
Finance/Acc related
Excellent work.
Customer 460073, April 29th, 2022
Excellent Keep it up
Customer 452441, April 26th, 2022
Customer 463001, June 21st, 2022
Well-written content. The writer follows instructions to the letter upon revisions.
Customer 463679, December 13th, 2022
Classic English Literature
Good work.
Customer 460021, June 3rd, 2022
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat