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Metacorp Limited plans to raise new capital for its project in Queensland. You are employed to estimate its cost of capital for use in capital budgeting decision. The treasurer has given you the following information and has asked you to calculate the weighted average cost of capital for the company.
The company currently has an outstanding bond with 12% coupon rate and a convertible bond with an 8.1 % coupon rate. The firm has been informed by an investment banker that bonds of equal risk and credit rating are now selling at a yield of 14 % per annum. The common stock has a price of $30 with an expected dividend (D1) of $1.30 per share. The expected growth rate for earnings and dividends per share is 12% per annum in the future. The preference stock is selling at $60 per share and carries a dividend of $6.80 per share. The flotation costs are 3% of the selling price for the preference shares, no floatation costs will be incurred for any new debt and common stocks issued. The capital structure of the firm is comprised of 45% debts, 5 % preference shares and 50% common shares. The corporate tax rate is 30%.
Calculate the cost of capital for the individual components in the capital structure, and then calculate the weighted average cost of capital for Metacorp. Consider after-tax cost of capital in your calculations.
Lenat Company produced 50,000 units during the year. Variable costs per unit and fixed production costs have remained constant the entire year. There were no beginning inventories. How much is dollar value of ending inventory using full costing?
Prepare journal entry to reimburse it on January 8. Create a journal entries to both reimburse the fund and increase it to $240 on January 8, assuming no entry
What is the cost of the raw materials used in June for each of the three jobs and in total and how much total direct labor cost is incurred in June?
2) Give all required consolidation adjustment entries needed to prepare the consolidated financial statements as at 30 June 2010. The balance sheets and income statement of ABC Ltd and XYZ Ltd can be found on the worksheet.
Make an income statement and a retained earnings statement for the month of June and a balance sheet at June 30, 2007 and Briefly explain whether the company's first month of operations was a success.
Show whether Loewen Group expansion from funeral homes to cemeteries affected its vertical or horizontal boundaries or both.
How to assure political stability B) How to address inequality and poverty C) Equitable allocation of resources D) equal economic justice E) How goods should be produced
Compute the net increase or decrease in net income for the month from the recognition of the adjustments
From the data given compute the Margin of Safety - Determine the margin of safety in terms of dollars
Calculate the total gain that the two companies can achieve by entering into a swap between them and explain briefly why such swap transforms a fixed rate liabilities of ABC inc. in floating rate liabilities
Assuming that the landfill is recorded within the general fund, illustrate what will appear on the fun-based financial statements for this landfill for the year ended December 31, 2010?
Suppose Green has been using the straight-line method and switches to the sum-of-the-years'-digits method. Ignoring income taxes, what journal entry(s) should Dolley record relating to the machine for 2011?
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