Solution-The manager of sensible essentials conducted an

The manager of sensible essentials conducted an excellent

Reference no: EM13478933

The manager of Sensible Essentials conducted an excellent seminar explaining debt and equity financing and how firms should analyze their cost of capital. Nevertheless, the guidelines failed to fully demonstrate the essence of the cost of debt and equity, which is the required rate of return expected by suppliers of funds.

You are the Genesis accountant and have taken a class recently in financing. You agree to prepare a PowerPoint presentation of approximately 6 minutes using the examples and information below:

Debt: Jones Industries borrows $600,000 for 10 years with an annual payment of $100,000. What is the expected interest rate (cost of debt)?
Internal common stock: Jones Industries has a beta of 1.39. The risk-free rate as measured by the rate on short-term US Treasury bill is 3 percent, and the expected return on the overall market is 12 percent. Determine the expected rate of return on Jones's stock (cost of equity). Here are the details:

Jones Total Assets	$2,000,000
Long- & short-term debt	$600,000
Common internal stock equity	$400,000
New common stock equity	$1,000,000
Total liabilities & equity	$2,000,000

Develop a 10slide presentation in PowerPoint format. Perform your calculations in an Excel spreadsheet. Cut and paste the calculation into your presentation. Include speaker's notes to explain each point in detail. Apply APA standards to citation of sources.

Reference no: EM13478933

Questions Cloud

The balance sheet also shows that the company has 10 : please show formulas.a balance sheet shows a total of noncallable 45 million.long-termdebt with a coupon rate of 7.00

Using the same multinational company that was chosen in the : assignment international market expansionusing the same multinational company that was chosen in the assignment 1

The basic requirement is to undertake a general financial : the basic requirement is to undertake a general financial analysis comparing myer holdings ltd myer asx code myr

What percent of ownership must be sold to grant the 100 : r.k. maroon rkm is a seed-stage web-oriented entertainment company with important intellectual property. rkms founders

The manager of sensible essentials conducted an excellent : the manager of sensible essentials conducted an excellent seminar explaining debt and equity financing and how firms

Most governments at least try to make it difficult for : 1. recently financial markets have become highly integrated. this development allows investors to diversify their

Briefly describe the mne you selected who they are and what : research a u.s.-based mne for whom you would like to work or for whom you currently work. research a foreign country

Compute the cost of direct materials used during the month : problem 1factory overhead for the praeger company has been estimated as followsnbspnbspnbspnbspnonvariable

Topic pick one specific technology that is new how will : topic pick one specific technology that is new. how will that technology change our life? pro? cons?for example red

User Account

All Pages

The manager of sensible essentials conducted an excellent

Reference no: EM13478933

Reference no: EM13478933

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT