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Klose Outfitters Inc. believes that its optimal capital structure consists of 50% common equity and 50% debt, and its tax rate is 40%. Klose must raise additional capital to fund its upcoming expansion. The firm will have $2 million of retained earnings with a cost of rs = 14%. New common stock in an amount up to $8 million would have a cost of re = 17%. Furthermore, Klose can raise up to $3 million of debt at an interest rate of rd = 9%, and an additional $4 million of debt at rd = 11%. The CFO estimates that a proposed expansion would require an investment of $4.9 million. What is the WACC for the last dollar raised to complete the expansion? Round your answer to two decimal places.
You are considering the purchase of one of two machines used in your manufacturing plant. Calculate the EAC.
1. puckett products is planning for 5 million in capital expenditures next year. pucketts target capital structure
Calculate the opportunity cost (not keeping capital in the company earning 10%) of each transaction. Calculate the cost of the lease after taxes.
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A project has an initial cost of $90,870, and promises to pay a fixed cash flow per year for 3 years. It has been determined that using a discount rate of 12.2 percent, its net present value is $134,961. What must be the expected annual cash flow?
Calculate total dollars paid to the bank.
What are the key types of stock typically issued by publicly traded organizations? If you were to invest $10,000 of your own funds, which type would you choose, why? What are junk bonds and would you recommend investing in them? Defend your answer. I..
What is the rate of return on a preferred stock that has a par value of $50, a market price of $46.50, and a dividend of $4.10?
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Which statement is NOT true concerning moral philosophies?
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