Reference no: EM13197161
1. Calculating Cost of Equity. Bohan non Corporation's common stock has a beta of 1.10. If the risk-free rate is 4.5 percent and the expected return on the market is 12 percent, what is the compan y's cost of equity capital?
2. Estimating the DCF Growth Rate. Suppose Ma tta Ltd. just issued a dividend of $2.46 per share on its common stock. The company paid dividends of $1. 96, $2.03, $2.20, and $2.30 per share in the last four years. If the st ock currently sells for $65, what is your best estimate of the company's c ost of equity capital using arithmetic and geometric growth rates?
WACC. Blue Bull, Inc. has a target debt-equity ratio of .70. Its WACC is 8.4 percent, and the tax rate is 35 percent.
- If the company cost of equity is 11 percent, what is the pretax cost of debt?
- If the after tax cost of debt is 5.2 percent, what is the cost of equity?
3. Calculating Flotation Costs. The IBBS Co. needs to raise $65 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. If the offer price is $50 per share and the company's underwriters charge a n 8 percent spread, how many shares need to be sold?
4. Calculating Flotation Costs. The Bostitch Co. has just gone public. Under a firm commitment agreement, Bostitch received $32 for each of the 4.1 million shares sold. The initial offering price was $34.40 per share, and the stock rose to $41 per share in the first few minutes of trading. Bostitch paid $905,000 in legal and other direct costs and $250,000 in indirect costs. What was the flotation cost as a percentage of funds raised?
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Define why caffeine can be extracted from tea leaves
: Explain why caffeine can be extracted from tea leaves into hot water, and how you extracted the aqueous solution and isolated crude caffeine
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How many liters of each solution were mixed
: a 34% solution is mixed with a 66% solution to produce 216 liters of a 42% solution. How many liters of each solution were mixed?
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Define the production of fluorine-containing compounds
: Carbonyl fluoride, COF2, is an important intermediate used in the production of fluorine-containing compounds. For instance, it is used to make the refrigerant carbon tetrafluoride, CF4 via the reaction
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What is the expected value of the coin selected
: Assume that the drawer contains 11 coins: 5 quarters, 3 dimes, and 3 nickels. One coin is randomly selected. What is the expected value of the coin selected (in cents)?
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What is the compan ys cost of equity capital
: What was the flotation cost as a percentage of funds raised - Its WACC is 8.4 percent, and the tax rate is 35 percent.
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Find the dimensions of the plot
: A farmer wants to set aside a rectangular plot of land to contain 580 square meters. If the width is 19 less than the length, find the dimensions of the plot.
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State how many simabonds are there in a c molecule
: How many simabonds are there in a C60 molecule? 2. Which has stronger carbon-carbon bonds: graphite, diamond or C60? Please explain
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What is its effective annual percent growth rate
: An investment grows by 23% over a 3-year period. What is its effective annual percent growth rate?
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In how many ways can the manager choose
: dance team knows 18 routines of which 8 are tap, 7 are ballet, and 3 are modern. The program can consist of any four routines. In how many ways can the manager choose which routines to present if there are no restrictions?
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