Reference no: EM131521702
1. Hitchcock Snacks will issue common stock to the public for $40. The expected dividend next year is $2.00 per share and will grow at 6% thereafter. If the flotation cost is 10% of the issue's gross proceeds, what is the cost of external equity?
2. Holt Caps Company has $20M in common equity and $5M in debt (and no preferred stock). Its recently issued bonds have a 6% coupon rate and are currently selling at par. The company's marginal tax rate is 40%. The stockholders' required rate of return is estimated to be 10%. What is Holt's WACC?
3. The stock price of Gina's Dance Studios, Inc., is $20 and the stock just paid a dividend of $1.20. The dividends are expected to grow at 6% per year in the future.
a. Using the discounted cash flow approach, what is its cost of equity?
b. If the firm's beta is 1.4, the risk-free rate is 3%, and the expected return on the market is 9.4%, then what would be the firm's cost of equity based on the CAPM?
c. On the basis of the results of Parts a and b, what would be your estimate of Gina's cost of equity?
|
Analyze and develop job requirements and task statements
: Identify, analyze, and develop job requirements and task statements that you will include in formalized job descriptions
|
|
What would be the total return of the bond in dollars
: What is the inflation premium? What is the fair interest rate on the corporation's 30-year bonds?
|
|
Provide suggestions regarding steps that company can take
: Each individual paper should summarize the group discussions and provide suggestions regarding the steps that the company can take.
|
|
Percent and the market risk premium
: The risk-free rate, kRF, is 2.7 percent and the market risk premium, (kM - kRF), is 5 percent. Assume that required returns are based on the CAPM.
|
|
Estimate of gina cost of equity
: On the basis of the results of Parts a and b, what would be your estimate of Gina's cost of equity?
|
|
Record issuance of the mortgage installment note
: On January 1, 2012, Stoops Entertainment purchases a building for $500,000, paying $100,000 down and borrowing the remaining $400,000, signing a 7%, 15-year.
|
|
The mesopotamian or ovids account of creation
: Focus on two or three things in the Mesopotamian and/or Ovid's account of creation that differ from Genesis.
|
|
What does it mean when an algorithm is efficient versus
: Algorithms can be described as either efficient or inefficient. In your opinion, what does it mean when an algorithm is efficient versus when it is inefficient?
|
|
The racist traditions of minstrelsy and blackface
: How do the racist traditions of minstrelsy and blackface (performance styles developed by white Americans mocking African-Americans in songs and skits).
|