Finance Assignment | Top Essay Writing

Allia’s Co. has a capital structure that consists of $75,000 common equity and $40,000 of long-term debt.
how to prepare balance sheet from trial balance
• The company estimates that it can issue debt at a before tax cost of 9%, and its tax rate is 40%.
• The company’s common stock currently sells at $30 per share. The year-end dividend, , is expected to be $2.50, and the dividend is expected to grow at a constant rate of 6% per year.
Questions 6→10 refers to Case Two.
6. Allia’s weight of debt is:
A.40%
B.34.78%
C.65.22%
D.9.00%
7. Allia’s weight of common equity is:
A.65.22%
B.34.78%
C.6.00%
D.75.00%
8. The after tax cost of debt for Allia’s is:
A.3.6%
B.9.0%
C.5.4%
D.5.0%
9. The cost of common equity for Allia’s is:
A.32.5%
B.14.33%
C.8.33%
D.6.00%
10. The Weighted Average Cost of Capital for Allia’s is:
A.100.00%
B.19.73%
C.9.87%
D.11.22%
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