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Question - The Warren Antique Car Company has an equity beta, b, of 0.8 and 40% debt in its capital structure. The company has risk-free debt that costs 3% before taxes, and the expected rate of return on the market is 10%. Warren is considering the acquisition of a new project in the micro car manufacturing business that is expected to yield 20% on after-tax operating cash flows. Mittal's Mini's, which is in the same product line (and risk class) as the project being considered, has an equity beta, b, of 1.3 and has 20% debt in its capital structure. Warren will finance the new project with 30% long-term debt and marginal tax rates are 21% on everything. Find the WACC for the new project and decide what Warren should do.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.
Accounting problems, Draw a detailed timeline incorporating the dividends, calculate the exact Payback Period b) the discounted Payback Period. the IRR, the NPV, the Profitability Index.
Term Structure of Interest Rates
Write a report on Internal Controls
Prepare the bank reconciliation for company.
Create a cost-benefit analysis to evaluate the project
Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR
Distinguish between liquidity and profitability.
Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.
Simple Interest, Compound interest, discount rate, force of interest, AV, PV
CAPM and Venture Capital
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