Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Eco plastics company case study answers

11/11/2020 Client: arwaabdullah Deadline: 3 days

Integrative Case 1 Eco Plastics Company

Since itsinception, Eco Plastics Company has been revolutionizing plastic and trying todo its part to save the environment. Eco's founder, Marion Cosby, developed a biodegradableplastic that her company is marketing to manufacturing companies throughout thesoutheastern United States. After operating as a private company for six years,Eco went public in 2009 and is listed on the Nasdaq stock exchange.

As the chief financialofficer of a young company with lots of investment opportunities, Eco's CFOclosely monitors the firm's cost of capital. The CFO keeps tabs on each of theindividual costs of Eco's three main financing sources: long-term debt,preferred stock, and common stock. The target capital structure for ECO isgiven by the weights in the following table:

Source of capital

Weight

Long-term debt 30% Preferred stock 20 Common stock equity 50 Total 100%

At the presenttime, Eco can raise debt by selling 20-year bonds with a $1,000 par value and a
10.5% annual coupon interest rate. Eco's corporate tax rate is 40%, and itsbonds generally require an average discount of $45 per bond and flotation costsof $32 per bond when being sold. Eco's outstanding preferred stock pays a 9%dividend and has a $95-per-share par value. The cost of issuing and sellingadditional preferred stock is expected to be $7 per share. Because Eco is ayoung firm that requires lots of cash to grow it does not currently pay adividend to common stock holders. To track the cost of common stock the CFOuses the capital asset pricing model (CAPM). The CFO and the firm's investmentadvisors believe that the appropriate risk-free rate is 4% and that themarket's expected return equals 13%. Using data from 2009 through 2012, Eco'sCFO estimates the firm's beta to be 1.3.

Although Eco'scurrent target capital structure includes 20% preferred stock, the company is
considering using debt financing to retire the outstanding preferred stock,thus shifting their target capital structure to 50% long-term debt and 50%common stock. If Eco shifts its capital mix from preferred stock to debt, itsfinancial advisors expect its beta to increase to 1.5.

TO DO

a. Calculate Eco's currentafter-tax cost of long-term debt.

b. Calculate Eco's current costof preferred stock.

c. Calculate Eco's current costof common stock.

d. Calculate Eco's currentweighted average cost capital.

e. (1) Assuming that the debtfinancing costs do not change, what effect would ashift to a more highly leveragedcapital structure consisting of 50% long-term debt, 0% preferred stock, and 50%common stock have on the risk premium for Eco's common stock? What would be
Eco's new cost of common equity?

(2) What would be Eco's newweighted average cost of capital?

(3) Which capital structure—theoriginal one or this one—seems better? Why?

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Helping Hand
Instant Assignments
Calculation Guru
Peter O.
A+GRADE HELPER
Ideas & Innovations
Writer Writer Name Offer Chat
Helping Hand

ONLINE

Helping Hand

Hello, I an ranked top 10 freelancers in academic and contents writing. I can write and updated your personal statement with great quality and free of plagiarism as I am a master writer with 5 years experience in similar ps and research writing projects. Kindly send me more information about your project. You can award me any time as I am ready to start your project curiously. Waiting for your positive response. Thank you!

$55 Chat With Writer
Instant Assignments

ONLINE

Instant Assignments

Hey, I can write about your given topic according to the provided requirements. I have a few more questions to ask as if there is any specific instructions or deadline issue. I have already completed more than 250 academic papers, articles, and technical articles. I can provide you samples. I believe my capabilities would be perfect for your project. I can finish this job within the necessary interval. I have four years of experience in this field. If you want to give me the project I had be very happy to discuss this further and get started for you as soon as possible.

$55 Chat With Writer
Calculation Guru

ONLINE

Calculation Guru

I see that your standard of work is to get content for articles. Well, you are in the right place because I am a professional content writer holding a PhD. in English, as well as having immense experience in writing articles for a vast variety of niches and category such as newest trends, health issues, entertainment, technology, etc and I will make sure your article has all the key pointers and relevant information, Pros, Cons and basically all the information that a perfect article needs with good research. Your article is guaranteed to be appealing, attractive, engaging, original and passed through Copyscape for the audience so once they start reading they keep asking for more and stay interested.

$55 Chat With Writer
Peter O.

ONLINE

Peter O.

Hello, I can assist you in writing attractive and compelling content on ganja and its movement globally. I will provide with valuable, informative content that you will appreciate. The content will surely hit your target audience. I will provide you with the work that will be according to the needs of the targeted audience and Google’s requirement.

$55 Chat With Writer
A+GRADE HELPER

ONLINE

A+GRADE HELPER

Greetings! I’m very much interested to work on this project. I have read the details properly. I am a Professional Writer with over 5 years of experience, therefore, I can easily do this job. I will also provide you with TURNITIN PLAGIARISM REPORT. You can message me to discuss the detail. Why me? My goal is to offer services to you that are profitable. I don’t want you to place an order once and that’s it. For me to be successful, I need you to come back and order again. Give me the opportunity to work on your project. I wish to build a long-term relationship with you. We can have further discussion in chat. Thanks!

$55 Chat With Writer
Ideas & Innovations

ONLINE

Ideas & Innovations

Hi, Hope you are doing well. I can do this easily because I have several experiences to write articles on different web sites, creative content for several blogs & also SEO writing. Even I have written many kindle ebooks, Being a creative writer, I think I am the most eligible person for your Ghostwriting project. So lets make no longer delay & start chatting immediately.

$60 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Chapter 5 pollen and spore examination - How to make recommendation report - Stolen jane harrison scenes - Sf5 polar or nonpolar - Principles of incident response and disaster recovery 2nd edition pdf - A composite wall separates combustion gases at - Next generation planning handbook - WEEK5-APPLY: CONTINGENCY PLAN AND EXECUTIVE PRESENTATION - Short wave diathermy parameters - Conflict Managment Paper 6 - ADVERTISING, SALES, AND PUBLIC RELATIONS - Art and Social Change in Latin America: Diego Rivera - Quiz night answer sheet - 16 vane street tingalpa qld - 108 names of lakshmi - Heinemann biology 1 vce sb eb 5e - Nurs495 Windshield Survey - Cbus super income stream - Lab 7 7 the local water budget answer key - Task risk assessment example - Through women's eyes an american history with documents fifth edition - Coursespaces uvic - MATH 399N Statistics - Create a local database entry for chap authentication - Midsouth chamber of commerce case study solutions - Early years learning framework qld - Sodium carbonate and phenolphthalein reaction - Nursing Leadership ( Due 24 hours) - Nutrition - Brisbane city council stormwater guidelines - Difference between job shop and batch production - Afa tours v whitchurch - Electric field mapping lab report answers - Origin multi panel graphs - Master Public Policy Class Annotated reading #1 and 2 - Clinical Supervision - Pam runs a mail order business for gym equipment - Strategic managment - Responses - Is a mole a herbivore carnivore or omnivore - Math 1580 logic quiz - Com 100 exam 1 answers - Health policy and Advanced Practice Nurse - E commerce business models and concepts chapter 2 - Of mice and men test - How much does jamba juice pay 2017 - Jason silvers goldman sachs - LeadingGlobalandDiverseCultures_Assessment4 - Life of castruccio castracani pdf - Running in the family - Nursing. - Descriptive Statistics and Data Visualizations ( NO PLAGIARISM) - Abc goulburn murray radio - Discussion: Implementing a Revision Strategy - The education of margot sanchez sparknotes - Devil cut haircut fade - Relations between the Faith's Ariana Rickerd - Beat the streets meaning - Fortune’s Formula: Scientific Betting System Roulette - Discussion question #1-4 When submitting work, be sure to include an APA cover page and include at least two APA formatted references (and APA in-text citations) to support the work this week. All work must be original (not copied from any source). - Spelling connections grade 8 answer key - Market structure assignment - Year 7 spelling words australia - Essay on chocolate factory - Standing order form template charity - Lord of the flies religious allegory - Push button publishing slogan - Its enough to make kings and vagabonds meaning - Is diesel fuel flammable or combustible - Love Problem Solution In Canada +917657874622 - Red and black gang colors - What is the irac method - High school birthday polynomial project - Literature Evaluation - Blue accent 1 lighter 80 excel - Father sky mother earth kath walker - Protagonist in twelfth night - Social Work Process Recording - Mandalos a volar y diles que yo no fui - Dr ailsa wilson edwards - Double block and bleed valve catalogue - Lcm of 24 and 30 - Introduction to clinical biochemistry - Affective methods of socialization - Syslog ng syntax check - Financial institutions investments and management an introduction - Standardization of naoh with khp - Essay - Cause and Effect - For don m banned poem analysis - Bis 155 week 6 ilab - 'syms' requires symbolic math toolbox. - Egg stores v leibovici - What plants live in the central valley region of california - Conquering chemistry hsc worksheet answers - Jane addams why women should vote - Analysis of cherry pink and apple blossom white - National grapes research centre pune - Adairs gift card balance - Commedia dell arte stock characters list