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Estimate the components of the cost of capital for your company using market data. 4.a. For the cost of common stock, analyze using the dividend growth model and CAPM. To determine Beta, first use published sources. Next, calculate your own beta estimate using regression analysis with 52 weeks of daily data. See the textbook's website to download the regression tool kit from Chapter 6. If the published estimates and the results of your regression analysis differ, justify your final choice of Beta for the WACC determinations. 4.b. Calculate the cost of preferred stock 4.c. Calculate the cost of debt. Recall that you do NOT use the coupon rate, but instead use the YTM for each bond issue. 4.d. Determine the appropriate weights for each of the categories using market values. 4.e. Calculate the company's WACC. 4.f. In your opinion, has the company minimized its WACC? What could it differently? Recall that more debt increases the risk of bankruptcy and more equity means the flotation costs of issuing stock. 4.g. Provide reasons why or why not the current WACC is appropriate for future use by the company If not, explain which WACC should be used for future business decisions. Historical Stock Price Review briefly the historical performance of the company's stock price. Explain if this affected your analysis.
Doherty Industries wants to invest in a new computer system. The company only wants to invest in one system, and has narrowed the choice down to System A and System B.
chester amp wayne is a regional food distribution company. mr. chester ceo has asked your assistance in preparing
You are quoted two loan rates: 1) a 9% APR with weekly compounding and 2) a 9.2% APR with yearly compounding. Which one is truly the better offer? Do the necessary calculations to support your answer.
find the future value of the following annuities. the first payment in these annuities is made at the end of year 1
Sutton can also lease the equipment for 5 end-of-year payments of $1,790,000 each. How much larger or smaller is the bank loan payment than the lease payment? Note: Subtract the loan payment from the lease payment.
Could the U.S. government reduce its regulatory constraints on investment banks in a way that that would help firms and the economy? Explain.
Identify a mutual fund or ETF that is substantially invested in bonds.
Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the 1-year eective annual interest rate is 10%.
After analyzing a sample of remaining 480 items, you determine that sample is overpriced by 6%. By using this 6% decrement factor, what cost must you evaluate for those items?
Incorporate appropriate animations, transitions, graphics, and "notes" for each slide. The notes may be comprised of brief paragraphs or bulleted lists describing the content of each slide. Support your presentation with at least five (5) schol..
Slattery Corp had year-end retained earnings balances of $670,000 in 2008 and $600,000 in 2009. In 2009 the firm paid $6,000 in preferred dividends and $10,000 in common dividends. What was the Firm's EAT IN 2009?
List some of the "indulgences" other than golden parachutes and poison pills (which are given to managers by the BOD) some managers have given to themselves.
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