Reference no: EM133086114
Questions -
Q1. A company sells a new issue of 10 year, 12 per cent bonds of $100, each at par. It will pay interest annually and repay bonds at par on maturity. What is the cost of bonds? If the tax rate is 30 percent, what is the after-tax cost of the bond?
Q2. A company sells a new issue of 10 year, 12 per cent bonds of $100 each, at par. It will pay interest annually and repay bonds at 10 premium on maturity. What is the cost of bonds? If the tax rate is 30 percent, what is the after-tax cost of the bond?
Q3. A bond of $1000 is currently sold for $200. It will be fully repaid after 25 years. The tax rate is 30 percent. What is the after-tax cost of the bond?
Q4. A 10-year, $1000 debenture of a firm can be sold for a net price of '977. The rate of interest is 14 percent per year, and bond will be redeemed at par on maturity. The firm's tax rate is 30 per cent. Compute the after-tax cost of the debenture.
Q5. A company issues 10 per cent preference shares in perpetuity. The face value per share is $100, but the issue price is $95. What is the cost of the preference share? What is its cost if the issue price is $105?
Q6. The current market price of a company's share is $120 and the expected dividend per share next year is $12. If the dividends are expected to grow at a constant rate of 8 per cent, what is the company's cost of equity?
Q7. The current market price of a company's share is $200 and the expected dividend per share next year is $18. The company's payout ratio is 30 per cent and internal rate of return is 5 per cent. What is the company's cost of equity?
Q8. The share of a company is currently selling for $300. It wants to finance its capital expenditures of $1000 million either by retaining earnings or selling new shares. If the company sells new shares, the issue price will be $255. The dividend per share next year is '30 and it is expected to grow at 7.5 per cent. Calculate (i) the cost of internal equity (retained earnings) and (ii) the cost of external equity (new issue of shares).
Q9. A project costs $96,000 and is expected to generate cash inflows of $48,000, $42,000 and $36,000 at the end of each year for next 3 years. Calculate project's IRR.
Q10. The initial cash outlay of a project is '500,000 and it can generate cash inflow of $190,000, $170,000, $160,000 and $120,000 in year 1 through 4. Calculate the project's payback period.
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What is the carrying value of its assets
: A firm's balance sheet lists $3,067 million in shareholders' equity and $1,204 million in liabilities. What is the carrying value of its assets
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What was the net payout to shareholders during the year
: Chubb Corporation reported $6,525.3 million in shareholders' equity at the end of 2001. What was the net payout to shareholders during the year
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Determine the amount of cash provided
: Question - Patterson Company reported net income for the current year of $666,000, Determine the amount of cash provided
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Analyze a current health care problem
: Analyze a Current Health Care Problem or Issue - Identify at least three scholarly or academic peer-reviewed journal articles about the topic
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Compute the after-tax cost of the debenture
: A 10-year, $1000 debenture of a firm can be sold for a net price of '977. Compute the after-tax cost of the debenture
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What is the prepaid or accrued benefit cost at year-end
: During the current year, the actuary determined the current service cost at P2,500,000. What is the prepaid or accrued benefit cost at year-end
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How much is the company''s over-all break-even point
: The total fixed expenses are $400,000 per month. How much is the company's over-all break-even point in dollars
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Summarize the health care problem
: Conduct a search for scholarly or academic peer-reviewed literature related to the topic and describe the criteria you used to search for articles
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What is the variable efficiency variance
: Direct labor, $3,510,000 at a rate of $54; Actual overhead for the month $985,000. What is the variable efficiency variance
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