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Titan Mining Corporation has 8.6 million shares of common stock outstanding, 300,000 shares of 5 percent preferred stock outstanding, and 160,000 7.4 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.30, the preferred stock currently sells for $84 per share, and the bonds have 15 years to maturity and sell for 115 percent of par. The market risk premium is 7.4 percent, T-bills are yielding 3 percent, and the company’s tax rate is 40 percent. a. What is the firm’s market value capital structure? (Do not round intermediate calculations. Round your answers to 4 decimal places, e.g., 32.1616.) b. If the company is evaluating a new investment project that has the same risk as the firm’s typical project, what rate should the firm use to discount the project’s cash flows? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Bond X is a premium bond making semi-annual payments. The bond pays a 7 percent coupon, has a YTM of 5 percent, and has 13 years to maturity. Bond Y is a discount bond making semi-annual payments. This bond pays a 5 percent coupon, has a YTM of 7 per..
Healty Foods Inc sells 50 lb bags of grapes to the military fo $10 a bag. The fixed costs of this operation are $80,000 while the variable costs of grapes are $.10 per lb. What is the break-even point in bags? Calculate the profit or loss on 12, 000 ..
At the beginning of the month, you owned $10,000 of Company G, $10,100 of Company S, What is your portfolio return?
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to gene..
Financial analysts expect Theron Co.'s earnings and dividends to grow at a rate of 16 percent during the next three years, 12 percent in the fourth and fifth years, and at a constant rate of 6 percent thereafter. Theron's dividend which has just has ..
A manufacturer of furniture is concerned that the price of lumber will increase over the next three months. Explain how the manufacturer can protect against a rise in the price of lumber using lumber futures contracts ?
Suppose you deposit $55 each period into an account that has a APR of 9%, based on quarterly compounding. How much will you have in the account in 35 years?
If a financial statement says "In millions, except share and par value amounts which are reflected in thousands and par value per share amounts," is the amount $88103 as is, or does it mean $88,103,000,000? (I'm looking at Google's current financial ..
The LLB Company had net earnings of $127,000 this past year. Dividends of $38,100 were paid. The company's equity was $1,587,500. If Lory has 100,000 shares outstanding with a current market price of $11.625 per share, and the growth rate is 5.6%, wh..
The company operates deep mines as well as strip mines. Most of the coal mined is sold under contract, with excess production sold on the spot market.
Calculate the capital gains yield over the next year if the yield to maturity remains unchanged at 4.9 percent.
Describe financial statements and financial position of health care institutions. Describe overall planning process and the key components of financial plan.
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