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Marie Corp. has $1490 in debt outstanding and $2137 in common stock (and no preferred stock). Its marginal tax rate is 40%. Marie's bonds have a YTM of 6.0%. The current stock price (Po) is $47. Next year's dividend is expected to be $2.51, and it is expected to grow at a constant rate of 5% per year forever. The company's W.A.C.C. is ____%. Round your final answer to 2 decimal places (example: enter 12.34 for 12.34%), but do not round any intermediate work in the process.
[Note: Correct answer feedback may show more than 2 decimal places, but you should still follow instructions above for entering your answers.]
The Monongahela Valley Manufacturing Company has $750 debt outstanding with pretax cost of 6% and its common stock has a value of $1,250. The required return on equity is 14.34%. The firm faces a corporate tax rate of 35%. What is Monongahela’s equiv..
A bank accepts a cash deposit now of $200,000 and promises to pay $ 293866 in 5 years. its a guaranteed investment contract GIC. the bank then invest the 200,000 by buying coupon-paying bonds that are selling @ par each bond is $1000 par 8% annual co..
What is the bond’s nominal yield to maturity (YTM)?
Harrimon Industries bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 9%. What is the yield to maturity at a current market price of $836?
Vermont Industries has decided to issue three-year bonds denominated in 50,000,000 Russian rubles at par. The bonds have a coupon rate of 23% and will make interest payments on an annual basis. If the ruble is expected to appreciate from its current ..
Frank, who has just turned 40, would like to receive annual retirement payments of $55,000 over a 20 year period starting when he is 65 years old. Assume Frank makes his payments at the end of each year. How much does Frank need to save at the end of..
Suppose the 1-year futures price on a stock-index portfolio is 1,624, the stock index currently is. Formulate a zero-net-investment arbitrage portfolio and show that you can lock in riskless profits equal to the futures mispricing.
Explain how a dismantling design could be used to demonstrate that the component has no effect.- Draw a graph showing data that demonstrate that the component has no effect.
Calculate the cost of each capital component, after-tax cost of debt, cost of preferred, and cost of equity with the DCF method and CAPM method.
You have been asked to value a stock that will not pay a dividend until three years from now. At that time you estimate the dividend will be $1.40. You estimate that it will grow by 10% for the two following years and at 5% thereafter. What would the..
what is the effective annual percentage cost of its non-free trade credit?
Bud and Katie Milner file a joint return. During the year, they paid $11,000 to their nanny to look after their three children, ages 2, 9, and 11. Bud and Katie both work and earned $24,000 and $31,000, respectively. Compute the Milners' child and de..
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