Forecasted stockholder equity balance at end of next year

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1. Under the percentage of sales forecasting method, which of the following will impact the forecasted stockholder’s equity balance at the end of next year if net new financing is satisfied through long-term debt borrowings?

I. net income

II. long-term debt

III. dividends

IV. net new financing

2. An investor purchases a mutual fund share for $100. The fund pays dividends of $6, distributes a capital gain of $7, and charges a fee of $5 when the fund is sold one year later for $105. What is the net rate of return from this investment?

Rate of return %

3. Mark Corporation has a target capital structure of 80 percent common stock and 20 percent debt. Its cost of equity is 15 percent, and the cost of debt is 8 percent. The relevant tax rate is 35 percent. What is Mullineaux’s WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Reference no: EM131924448

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