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Rollins Corporation is constructing its MCC schedule. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,000. The firm could sell, at par, $100 preferred stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. Rollins= beta is 1.2, the risk-free rate is 10 percent, and the market risk premium is 5 percent. Rollins is a constant growth firm which just paid a dividend of $2.00, sells for $27.00 per share, and has a growth rate of 8 percent. The firms policy is to use a risk premium of 4 percentage points when using the bond-yield-plus-risk-premium method to find ks. What is Rollins' WACC? explain..
Returned merchandise will represent 6 percent of total sales. What is your net dollar sales projection for this year?
Define each of the following terms: Operating plan; financial plan. Spontaneous liabilities; profit margin; payout ratio. Additional funds needed (AFN); AFN equation; capital intensity ratio; self-supporting growth rate
Write a one page memo that critiques the short-term finance policy of each company and explain which company has the better short-term finance policy. Justify your response.
Construct a pro forma income statement and balance sheet for the next year for Novell Inc. - Estimate the sustainable growth rate using the latest fiscal year-end data.
At the beginning of the year, you bought a $1000 par value corporate bond with an annual coupon rate of 6 percent and a maturity date of 10 years. When you bought the bond, it had an expected yield to maturity of 8 percent. Today the bond sells for 1..
Calculate the accounting rate of return from each asset, assess its acceptability, and indicate which asset is best, using the accounting rate of return.
The current spot exchange rate is $1.60=€1.00, the three moth US dollar interest rate is 2%, consider a 3 month call option on $62,500 of strike price of $1.50=€1.00 what is the last option should sell for?
Strict liability is liability regardless of fault
You plan to purchase a $ 250,000 house using a 15-year mortgage obtained from your local bank. The mortgage rate offered to you is 3.75%. You will make a down payment of 20% of th epurchase price. Which of the following is correct? The principal repa..
DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, ..
How does this income statement differ from the one presented in exhibit 3.1? - did the best care spend 367,000 on new fixed assets during fiscal year 2011??
Messineo LLC borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal annual end of year payments. As the CFO of Messineo, LLC you must prepare a report of the pertinent information in a shor..
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