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JohnCorporation is constructing is cost of capital schedule. The target capital structure is based on the market values of the company’s outstanding securitiesIt has 35,000 bonds outstanding with a 10% coupon, paid semiannually, a current maturity of 25 years, and sell for $997 each. The firm could sell $100 preferred stock which pays an 11 % annual dividend for $89 each. Johnstone currently has 285,000 shares of preferred stock outstanding. John Corp. is a constant growth firm which just paid a dividend of $3.00 on its common stock which sells for $29 per share, and has an expected growth rate of 11%. There are currently 3,500,000 shares of common stock outstanding. The firm’s marginal tax rate is 38%.
Please estimate their weighted average cost of capital.
What was the amount of the service cost for the year?
A large retailer obtains merchandise under the credit terms of 3/20, net 40, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's e..
Consolidated Enterprises issues €10 million face value, five-year bonds with a coupon rate of 6.50 percent. At the time of issuance, the market interest rate is 6.0 percent. Using the effective interest rate method of amortization, the carrying value..
Northwest Utility Company faces increasing needs for capital. Fortunately, it has an Aa3 credit rating. The corporate tax rate is 40 percent. Northwest’s treasurer is trying to determine the corporation’s current weighted average cost of capital in o..
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A mail-order firm processes 4,300 checks per month. Of these, 60 percent are for $33 and 40 percent are for $65. The $33 checks are delayed two days on average; the $65 checks are delayed three days on average. Assume 30 days in a month. How much sho..
A stock has returns of 3%, 18%, -24%, and 16% for the past four years. Based on this information, what is the 95% probability range for any one given year?
assessing the value of customer relationship managementtrevor toy auto mechanics is an automobile repair shop in
A person plans to invest a total of 160000 in a money market account, a bond fund an international stock fund and a domestic fund. she wants 60% of her investment to be conservative (money market and bonds). Assuming she gets annual returns of 2.5% o..
Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.7% rate of inflation in the future.
The Black Bird Company plans an expansion. If the company is in the 34 percent tax bracket, what is the weighted average cost of capital?
Your firm is contemplating the purchase of a new $660,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $51,000 at the end of that time. If the tax rate is 40 percent,..
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