Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Predators is a multi-divisional firm involved in a number of infrastructure related projects spanning construction, engineering design, and power transmission. To finance its growth during this period of high government spending, new stocks and bonds can be issued in any amount. New bonds would pay a 6% annual coupon. Covenants on the firm's existing bonds limit it to a maximum debt/equity ratio of 0.8 and its tax rate is 30%. Since the company is involved with a number of different projects, your supervisor has asked you to use the pure play approach to estimate the appropriate cost of capital for the construction division. As a comparison, he has provided you with the following information regarding two of the firm's construction-focused competitors. Diggem Inc: this year's dividend = $1.65, sustainable dividend growth = 6%, stock price = $18.45, D/E = 0.6, tax rate = 25%, rD = 6% Skyreach Inc: Beta = 1.7, D/E = 0.9, Risk-free rate = 2%, expected market return = 10.65%, tax rate = 20%, rD = 8% Assuming that Predators maintains a constant debt/equity ratio of 0.8, what is Predators appropriate cost of capital for a project in the construction division?
Suppose that Third Bank has $400 million in assets. Of these, $150 million are rate-sensitive assets such as variable-rate and short-term loans. On the liabilities side, Third Bank has $100 million in rate-sensitive liabilities such as variable-rate ..
Assume General Electric (GE) has about 10.3 billion shares outstanding and the stock price is $37.10. Also, assume the P/E ratio is about 18.3. Calculate the approximate market capitalization for GE
Crow, Inc., a not-for-profit company, has a product contribution margin of $40. The fixed costs are $800,000. Crow, Inc., has set a target profit of $35,000 per year. A. What is the breakeven point in units? B. How many units must be sold to achieve ..
Your firm has an inventory period of 45 days, an accounts payable period of 22 days, and an accounts receivable period of 28 days. The CFO wants to implement a discount plan in order to reduce the receivables period to 18 days. What will happen to yo..
Find the future values of the following ordinary annuities: FV of $800 paid each 6 months for 5 years at a nominal rate of 6% compounded semiannually.
The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to rise to $37 or fall to $25. Assume the risk-free rate is zero. An investor sells a call option with a strike price of $31 per share. How would the inv..
In this module, you were introduced to identifying operating exposures that management must recognize. If your company was contemplating moving operations overseas, explain your rationale as to what country you would recommend the company expand to a..
All of the following will make the break-even point increase, other things equal, EXCEPT
A project has an initial cost of $59,675, expected net cash inflows of $12,000 per year for 9 years, and a cost of capital of 12%. What is the project's payback period? Round your answer to two decimal places
The Gilbert Instrument Corporation is considering replacing the wood steamer it currently uses to share guitar sides. The steamer has 6 years of remaining life. If kept, the steamer will have depreciation expenses of $650 for 5 years and #325 for the..
The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to
You have four investments to consider. For each determine the IRR (or RIC) and determine if each project is acceptable with a MARR of 12%. Hint – you may want to consider PW(i) with 1%
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd