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Titan Mining Corporation has 4.3 million shares of common stock outstanding and 85,000 6.8% semi annual bonds outstanding, par value of $ 1,000 each. The common stock currently sells for $ 58 per share, and has a beta of 0.90. The bonds have 23 years remaining till maturity, and sell for 93% of par. The market risk premium is 7%, T-bills are yielding 5%, and Titan’s tax rate is 35%. Currently, the firm also has 8 % preferred stock selling for $ 95 per share. Floatation costs for 3% for both preferred and common stock. Assume that the firm has to raise new common and preferred equity to finance new ventures.
What is the firm’s market value capital structure?
If Titan Mining is evaluating a new investment project that has the same risk as the firm’s typical project, what rate should the firm use to discount the project’s cash flows?
On Friday, December 12, the March 2016 S&P Index futures contract (i.e., the S&P contract which expires in March of next year) closed at 2000, down 40 points on the day. The value of the contract is set at 250 × the index. How much value did each con..
You own 500 shares of Stock A at a price of $60 per share, 405 shares of Stock B at $80 per share, and 500 shares of Stock C at $41 per share. The betas for the stocks are .8, 1.8, and .7, respectively. What is the beta of your portfolio?
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Suppose a stock had an initial price of $86 per share, paid a dividend of $1.80 per share during the year, and had an ending share price of $94. Compute the percentage total return.
With the growing popularity of casual surf print clothing, two recent MBA graduates decided to broaden this casual surf concept to encompass a “surf lifestyle for the home.” With limited capital, they decided to focus on surf print table and floor la..
Hayes Corporation has $300 million worth of common equity on its balance sheet, and 6 million shares of stock outstanding. The company's Market Value Added (MVA) is $162 million. What is the company's stock price?
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The school you would like to attend costs $100,000. To help finance your education, you need to choose whether or not to sell your 1,000 shares of Apple stock, 1,000 EE Savings Bonds (with $100 denominations and 4.25% coupon rate) that are five years..
Loanable funds theory practice: show a graph how events a b and will affect supply and demand for Loans and equilibrium interest rate. consumer and investors confidences increases. signs of economic growth cause an increase in the public’s expectatio..
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