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Over the last five years the annual dividends on the firm's stock have grown at 6 percent per year and this growth is expected to continue indefinitely. A dividend of $1.25 was recently paid. Common shares trade at $45 with 250,000 outstanding and no preferred shares. The yield on long-term government bonds is currently 3 percent and you believe the appropriate expected market risk premium is 5 percent (the long-term average). The stock's beta is 1.05. Clearview also has 25-year bonds with $1,000 face value, 6.5-percent semi-annual coupons, and 20 years to maturity. The bonds trade at 94.5. The initial bond offering raised $15.5 million and initially sold at par. The firm's marginal tax rate is 27 percent.
Determine the after-tax cost of debt using this formula:
kb approx. = ((annual coupon + (face - price)) ÷ years remaining) ÷ ((face + price) ÷ 2).
1.which of the following is considered a hybrid organizational form?2.which of the following is a principal within the
You are considering purchasing a put option on a stock with a current price of $39. The exercise price is $35. and the price of the corresponding call option.
The balance sheet for Virtual Gaming Systems for 2012 and 2011 is provided below.
1. Mark bought a call option ten days ago on a stock, the call expires at the end of the year and has a strike price of 50. John bought a call option on the same stock yesterday, the call also expires at the end of the year and has a strike price ..
Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $9, but management expects to reduce the payout by 4 percent per year, indefinitely. If you require an 11 percent return on this stock, what will you pay for a share..
Which is greater: the future value interest factor (FVIF) for 10 percent and two years or the present value interest factor (PVIF) for 10 percent and two years?
1- Suppose the current value of a popular stock index is 653.50 and the dividend yield on the index is 2.8%. Also, the yield curve is flat at a continuously compounded rate of 5.5%.
a. What fraction of tires is expected to survive beyond 54,000 miles? b. What fraction will survive fewer than 56,000 miles?
Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.
In 23 years, what will your company's repayment be if you issue the coupon bonds?
Flintstone Mining Inc. has a weighted average cost of capital of 12%. Flintstone has 40% debt in its capital structure (debt-to-equity is 0.67).
What stock price is expected one year from now (P1)? Round your answer to two decimal places.
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