Firm specializing in engineering components

Assignment Help Financial Management
Reference no: EM131983892

Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project: The project will last 5.00 years with an annual cash flow of $40.00 million. The project will require an initial investment of $140.00 million The firm must determine the cost of capital to evaluate the project. (The project is within the firm’s normal activities) Ramblin Wreck, Inc. Financial Data:

STOCK DATA: BOND DATA:

Current Price Per Share $29.00 Current Price Per Bond $921.00

# of Shares 2.00 million # of bonds 20,000.00

Book Value $50 million Annual Coupon Rate 8.00%

Face Value Per Bond $1,000

Maturity 10 years

The risk free rate in the economy is currently 2.00%, while investors have a market risk premium of 6.00%. Ramblin Wreck, Inc. has a beta of 1.46. The tax rate is 36.00%. What is the yield to maturity on Ramblin Wreck, Inc. bonds?

Reference no: EM131983892

Questions Cloud

Determine the cost of capital to evaluate the project : The firm must determine the cost of capital to evaluate the project.
What is the no-arbitrage one-year forward rate : If interest rates are 5.375 percent APR in the U.S. and 2.148 percent APR in the U.K., what is the no-arbitrage 1-year forward rate?
What is the euro-yen cross rate : If the euro interest rate is 5.15% and the yen interest rate is 4.95%, what is the euro-yen cross rate?
Consider the options separately and add the net profit : what is your overall net position (net profit) if the spot rate rises to $1.2940/? (Hint, consider the options separately and add the net proft).
Firm specializing in engineering components : Ramblin Wreck is a firm specializing in engineering components. What is the yield to maturity on Ramblin Wreck, Inc. bonds?
What is the percentage of equity : The project has the same risk as the firm overall and will earn $12.00 million per year for 8.00 years. What is the percentage of equity used by McCann Catching
What is the NPV of the expansion : The project has the same risk as the firm overall and will earn $11.00 million per year for 8.00 years. What is the NPV of the expansion?
What is the value of martell mining stock : If Do= $5 and rs=15%, what is the value of Martell Mining’s stock?
Bond outstanding-what is the yield to maturity of bond : A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par value. What is the yield to maturity of this bond?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd