Reference no: EM13660063
Use your analytical skill and knowledge to calculate expected return on NBA's equity, preference shares and debt. With expected return on equity, preference shares and debt calculate WACC.
Question1. Subprime mortgage crisis is an example of a financial crisis that affected global markets worldwide. Give another example of a financial crisis in your discussions below.
? Discuss the possible causes of the financial crisis.
? Discuss the impact of the financial crisis on financial institutions and businesses elsewhere including your own country.
? Explain how the financial crisis affected the economies of different countries.
Question 2. NAB Ltd current share price is $30 and it has just paid a $1.50 dividend. Dividends of NAB are expected to grow at the rate of 5% per year.
A. What is an estimated return that shareholders of NAB expect to earn?
B. NAB Ltd also has preference share outstanding that pays fixed dividend of $2.30 per share. If preference stock is currently priced at $25, what is the return that preference share holders expect to earn?
C. Five years ago NAB Ltd issued 15 year bond with face value of $1000 and coupon rate of 9%. The price of these bonds is currently is $950. What is NAB's pre-tax and after-tax cost of debt?
D. NAB Ltd has 5000,000 ordinary shares outstanding and 1,500,000 preference shares outstanding, and its equity has a total book value of $50,000,000. Its liability has a book value of $25,000,000. If NAB's ordinary and preference shares are priced as in parts (A) and (B) above, what is the market value of NAB's assets?
E. What is weighted average cost of capital (WACC)
F. If NAB's liability increase by 100%. How the increase in liability will affect WACC of NAB. Explain.
Tax rate is 30%.
|
Brick is initially high and an aluminum
: A brick is initially 12.10 cm high and an aluminum can is initially 12.11 cm high. By how much should their temperatures be raised in order for the brick and the can to have exactly the similar height?
|
|
Analysis of health prevention initiatives
: Complete a brief management analysis of health prevention initiatives, cost containment strategies, quality improvement, and population health focus as they relate to managed care
|
|
Prepare an excel sheet summary comparison summary
: Prepare an Excel sheet summary comparison summary
|
|
The retirement of bonds
: What amount of gain or loss will be reported in Dundee's 20X8 income statement on the retirement of bonds?
|
|
Explain the possible causes of the financial crisis
: Discuss the possible causes of the financial crisis and discuss the impact of the financial crisis on financial institutions and businesses elsewhere including your own country.
|
|
The entry to record the payment
: A business borrowed $57,177 on March 1 of the current year by signing a 30 day, 8% interest bearing note. When the note is paid on March 31, the entry to record the payment should include a
|
|
Length of string and swung around a circle
: A 2.00 kg stone is tied to a 0.500-m length of string and swung around a circle at a constant angular velocity of 12.0 rad/s. What is the net torque on the stone regarding the center of the circle?
|
|
Grace corporation
: Grace Corporation, which owns stock in Samuels Corporation, had net operating income of $225,000 for the year. Samuels pays Grace
|
|
Assume the skin temperature of a naked person
: Assume the skin temperature of a naked person is 34° C when the person is standing inside a room whose temperature is18° C. The skin area of the individual is 1.4 m2. Assuming the emissivity is 0.80, find the net loss of radiant power from the body.
|