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Cool-Waves Inc. (CWI) is a newly incorporated firm that produces trendy and innovative clothing for young adults. The company is exhibiting rapid growth. It has current free cash flows of $25 million which are expected to increase at the rate of 18% for the next 5 years. However, after this period of high growth, as the novelty of its products wears off, the growth rate of CWI free cash flows will decline by 2% per year for the next 4 years and thereafter remain constant for the foreseeable future. CWI has a weighted average cost of capital of 14%. The company currently has $15 million of debt selling at 10% below par, and 200 million outstanding shares. It also has $ 120 million in cash. What is CWI's current price per share? (Hint:Take period 4 as the new time 0 for the second timeline and period 9 as the new time 0 for the third timeline.)
How much can City Farm earn in dollars per year on short-term investments made possible by the freed-up cash? (Enter your answer in dollars not in millions).
Happy Cruise lines issued bonds 5 years ago with par $1000 and a 20 year life when issued. At that time the coupon rate was 12%. Now 10 years later the current market rate for these bonds is only 10%. What should you pay for the bonds now?
The last dividend paid by Klien Company was $1.00. Klein's growth rate is expected to be a stable 4%. Find out the current price of Klein's common stock?
Calculated all manually with no excel formulation or calculation
A bond has just been issued with 30 warrants attached. The bonds have a 25 year maturity and an annual coupon of 7%, and they were issued at their $1,000.
Please use Excel financial functions or algebraic time value of money equations in your Excel cell formulas to answer these questions in your spreadsheet in order to receive credit for correct answers.
How can an expansionary monetary policy be effective without reducing interest rates to stimulate spending, and how can a contractionary monetary policy be effective without increasing interest rates to slow down spending?
What are the project costs of capital for new ventures with betas of 0.75 and 1.55? (Do not round intermediate calculations. Enter your answers as a percent
describe or define and discuss a type of bond that interests you and how it is differentiated from other bonds. then
If the average P/E multiple in Malta's industry is 15, (and this is an average stock) what should be the price of Malta's stock?
Determine the value today of one of these bonds to an investor who requires a 14% rate of return on these securities?
Barrel Products Plc (BP) is an international energy company, providing its customers with fuel for transportation, energy for heat and light, and petrochemical products for everyday items.
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