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Northman’s common equity, debt, and preferred equity are worth $70,000, $10,000 and $20,000 respectively with a total value is $100,000. The company’s common stock is currently listed at $54 per share; new preferred stock sells for $70 per share with a flotation cost of 10% and pays a dividend of $3.5 per share. Last year the company paid dividends of $2 per share on common stock, which is expected to grow at a constant rate of 5%. The local bank is willing to finance the project at 12% annual interest. Assuming the company’s tax rate is 35%, do the following computations: What is the cost of common equity, assuming only retained earnings are used?
What is the cost of common equity, assuming only retained earnings are used?
What is the NPV break-even level of sales if the firm’s tax rate is 40%? What is the NPV break-even level of sales if the firm pays no taxes?
Can a financial system exist without the concept of interest? Why? What are the factors that underlie interest rate changes? Why?
The projected bond yield is 8%. If the par value is ?$1,000?, what is the? bond's price using a semiannual convention if
IBM stock currently sells for 84 dollars per share. Over 8 months the price will either go up by 7.5 percent or down by -3.0 percent.
Tiffany Nadeau established and ran a small workshop that manufactured original design quality jewelry.
Discuss why both supply and demand analysis and marginal analysis must be used in making rational business decisions. Please include specific examples in your discussion posts. Also include the difference between substitutes and complements and the d..
Can you identify a company that has been affected significantly by either strategic, financial, operational, commercial, or technical risk? Describe how it resp
High Towers has an issue of preferred stock outstanding with a par value of $200. It pays an annual dividend equal to 10 percent of par value. If the required return on High Towers preferred stock is 5 percent, and if the company pays its next divide..
What is the monthly mortgage payment for a 30- year fixed rate mortgage with an interest rate of 4.75%, 1.5 points, and $1000 in fees in a home with a value of $300,000 and a LTV of 80%
An investment offers a total return of 11 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 7 percent. What does Janice believe the inflation rate will be over the next year? (Do not round interm..
Boretti has $400,000 in a stock fund. The fund pays a 10% return, compounded annually. If he does not make another deposit into the account, how long will it take for the account to increase to $2 million?
What is meant by overage for Retail space? Why are planning and budgeting important to an organization’s success?
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