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Titan mining corporation has 9.1 million shares of common stock outstanding and 350,000 4 percent seminannual bonds outstanding, par value $1,000 each. The common stock currently sells for $39 per share and has a beta of 1.55, and the bonds have 10 years maturity and sell for 110 percent of par. The market risk premium is 7.9 percent, t-bills are yielding 5 percent and the company's tax rate is 40 percent.
What is the firm's market value capital structure?
Debt:
Equity:
If the company is evalutating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the profject's cash flows?
Discount rate:
Suppose Leonard, Nixon, & Shull Corporation's projected free cash flow for next year is $100,000, and FCF is expected to grow at a constant rate of 6%. If the company's weighted average cost of capital is 11%, what is the value of its operations?
Exercise 6.1 A foreman thinks that the low efficiency of the machine tool operators is directly linked to the high level of fumes emitted in the workshop. He would like to prove this to his supervisor through a research study.
A financial manager of Chapman Co. recommends that it wait until the world stock markets recover before it issues stock. Another manager believes that Chapman Co. could issue its stock now even if the price would be low, since its stock price should ..
money has time value
Jensen Company issues bonds that bear a 6 percent coupon, payable semiannually. The bond matures in 8 years and has a $1,000 face value. Currently, the bond sells at par. What is the yield to maturity? (Please show work)
Now calculate the IRR for the project. Is this an acceptable project? Why or why not? Is there a conflict between your answer to part C?
What percent of each company's assets is financed by debt?
Note: You may create and / or make all necessary assumptions needed for the completion of these assignments. Select one (1) of the scenarios and write a four to five (4-5) page paper in which you:
N(d1) and N(d2) represent areas under a standard normal distribution function. Using the Black-Scholes model, what is the value of the call option?
Write a 350-word debate paper in which you discuss the benefits and drawbacks associated with group debates.
according to consumer digest julyaugust 1996 the probable location of personal computers pc in the home is as
dunn sporting goods sells athletic clothing and footwear to retail customers. dunns accountant indicates that the firms
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