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Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help in this, compute the cost of capital for the firm for the following:
a. A bond that has a $1000 par value (face value) and a contract or coupon interest rate of 11.7% that is paid semiannually. The bond is currently selling for a price of $1122 and will mature in 10years. The firm's tax rate is 34%.
b. If the firm's bonds are not frequently traded, how would you go about determining a cost of debt for this company?
c. A new common stock issue that paid a $1.76 dividend last year. The par value of the stock is $15, and the firm's dividends per share have grown at a rate of 8.3% per year. This growth rate is expected to continue into the foreseeable future. The price of this stock is now $27.97.
d. A preferred stock paying a 9.8% dividend on a $124 par value. The preferred shares are currently selling for $ 154.62.
e. A bond selling to yield 13.4% for the purchaser of the bond. The borrowing firm faces a tax rate of 34%.
A Treasury bond that matures in 10 years has a yield of 4.5%. A 10-year corporate bond has a yield of 7.5%. Assume that the liquidity premium on the corporate bond is 0.25%. What is the default risk premium on the corporate bond?
Employers often want to find out if their workers are productive and loyal. Determine at least one limit that you would place upon a private employer's rights to monitor the productivity and communications of employees at work. Support your respon..
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a company has a current ratio of 21 at december 31 2014. which of the following transactions will not cause a change
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