Reference no: EM13911333
Junior Interiors market value capital structure of 62% Common Equity, 3% Preferred Stock (PS) and 35% Debt. The company does not pay dividends, and evaluates its operations as approximately 30% more risky than an “average” company in the industry. The overall rate of return on average industry investments is 8.4% and risk-free investments currently return 1.7%.
Company Bonds sell for 97% of $2,000,000 Face value; carry a 6% annual interest rate with interest only payments made monthly. Currently outstanding debt obligations are due in 4 years. The firm’s PS has a current annual yield of 7.1%. It applicable tax rate is 32%.
What is Juniors Weighted Average Cost of Capital (WACC)?
If the regular PS dividend is $1.35 per quarter, for what does the stock currently sell?
A firm has a target Debt to Equity ratio of .85. It WACC is 10.2% and the applicable tax rate is 35%. If the company Cost of Equity is 13.4%, what is its PRE-TAX Cost of Debt?
Stock B has a Beta of 1.1 and an expected return of 12.3%. If the risk-free rate is 3.7% and MRP is 7%, is Stock B priced correctly?
(Need all answers with steps and reasoning)
|
What is the equivalent yield on a taxable bond
: Kayla is in the 28% federal income tax bracket and the 5% state income tax bracket. If Jennifer purchases a municipal bond yielding 4.25%, what is the equivalent yield on a taxable bond if the municipal bond income is exempt from both federal and sta..
|
|
Assume that the salary payments are equal amounts paid
: You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors testified that it will be five years before the plaintiff is able to return to work. The jury has already dec..
|
|
Management has recently announced that expected dividends
: The firm's assets will then be liquidated and the proceeds invested in the preferred stock of other firms so that the company will be able to pay an annual dividend of $1.75 indefinitely. If your required return on investments in common stock is 10 p..
|
|
What is the maximum price that you should pay for this stock
: The required return on an investment is 11 percent. You estimate that firm X's dividends will grow as follows: For the subsequent years you expect the dividend to grow but at the more modest rate of 9 percent annually. What is the maximum price that ..
|
|
Junior interiors market value capital structure
: Junior Interiors market value capital structure of 62% Common Equity, 3% Preferred Stock (PS) and 35% Debt. The company does not pay dividends, and evaluates its operations as approximately 30% more risky than an “average” company in the industry. Wh..
|
|
Funke corporation has only five employees
: Funke Corporation has only five employees who are all paid $1,050 per week.
|
|
What was the cash flow to stockholders for the year
: The December 31, 2013, balance sheet of Schism, Inc., showed $120,000 in the common stock account and $2,120,000 in the additional paid-in surplus account. The December 31, 2014, balance sheet showed $135,000 and $2,380,000 in the same two accounts, ..
|
|
What should the stocks price be
: Given the following data, what should the price of the stock be? If the growth rate increases to 8 percent and the dividend remains $4, what should the stock's price be? Round your answer to the nearest cent.
|
|
The amount of fica taxes that was withheld from his earnings
: George Parker was paid a salary of $74,700 during 2013 by Umberger Company. In addition, during the year, Parker started his own business as a public accountant and reported a net business income of $38,900 on his income tax return for 2013. Compute ..
|