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1.Assume Evco, Inc., has a current price of $50 and will pay a $2 dividend in one year, and its equity cost of capital is 15%. What price must you expect it to sell for right after paying the dividend in one year in order to justify its current price? 2.Krell Industries has a share price of $22 today. If Krell is expected to pay a dividend of $0.88 this year, and its stock price is expected to grow to $23.54 at the end of the year, what is Krell’s dividend yield and equity cost of capital?" 3.NoGrowth Corporation currently pays a dividend of $2 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 15% per year? 4.Summit Systems will pay a dividend of $1.50 this year. If you expect Summit’s dividend to grow by 6% per year, what is its price per share if its equity cost of capital is 11%? 5.Dorpac Corporation has a dividend yield of 1.5%. Dorpac’s equity cost of capital is 8%, and its dividends are expected to grow at a constant rate.a. What is the expected growth rate of Dorpac’s dividends? b.What is the expected growth rate of Dorpac’s share price?6. Procter & Gamble will pay an annual dividend of $0.65 one year from now. Analysts expect this dividend to grow at 12% per year thereafter until the fifth year. After then, growth will level off at 2% per year. According to the dividend-discount model, what is the value of a share of Procter & Gamble stock if the firm’s equity cost of capital is 8%? 7.Unida Systems has 40 million shares outstanding trading for $10 per share. In addition, Unida has $100 million in outstanding debt. Suppose Unida’s equity cost of capital is 15%, its debt cost of capital is 8%, and the corporate tax rate is 40%.a. What is Unida’s unlevered cost of capital?" b. What is Unida’s after-tax debt cost of capital?c. What is Unida’s weighted average cost of capital?
what minimum yearly cash inflow will be necessary for the company to go forward with this project? b. How would the minimum yearly cash inflow change if the company required a 10% return on its investment?
A company current balance sheet is as follows: calculate the firm's weighted-average cost of capital at various combinations of debt and equity, given the following data?
There would be no effect on revenues, but pretax labor cost will decline by $44,000 per year. The marginal tax rate is 35% and WACC is 12%.
the exercise price on one of orne corporations call options is 35 and the price of the underlying stock is 34. the
Which one of the following is the best example of a sunk cost?
You estimate that you can sell the land three years from now at $25,000 per arce. How much should you pay now for the land if the required rate of return is 25%?
include depreciation and working capital in the following NPV analysis, because depreciation for the machinery goes for longer than the project timeline, and working capital needs to be accounted for as a percentage of sales.
Stanley Corp. common stock has a required return of 17.5% and a beta of 1.75. If the expected risk free return is 3%, what is the expected return for the market based on the CAPM?
Historically, why have high inflation rates tended to be associated with high nominal interest rate?
Computing the present value of all cash flows associated with the new equipment minus the salvage value of the old asset,
Follies Bookstore, the only bookstore close to campus, had a net income of $90,000 in 2009. Here are some of the financial ratios from the annual report
The interest rate quotation in this example requires the borrower to pay 5 points to the lender up front and repay the loan later with 10 percent interest. What is the actual rate you are paying on this loan?
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