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1. Kelso's has a debt-equity of 0.4, and tax rate of 35 percent. the firm does not issue preferred stock. The cost of equity is 14.5 percent and the before- tax cost of debt is 4.8 percent. What is the weighted average cost of capital.
a. 10.46 percent
b. 10.67 percent
c..10.86 percent
d. 11.38 percent
e. 11.25 percent
2. Crissie just won the lottery , and she must choose between three award options. She can elect to receive a lump sum today $61 million, to receive 10 end-of-year payments of $9.5 million, or to receive 30 end-of-year payments of $5.5 million.
a. If she thinks she can earn 7% annually, which should she choose?
b. If she thinks she can earn 8% annually, which should she choose?
c. If she thinks she can earn 9% annually, which should she choose?
d. Explain how interest rates influence the optimal choice.
Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $85, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $65 million, a coupon of 8..
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Calculate the present value of an annuity (as a series of uniform payments) (use Table 7). 2a. Beth has won the $40 million lottery!! She will receive $2million per year for 20 years. If Beth could invest the money at 7% interest what is the $20 mill..
Devise a benchmarking review for Anthony's Orchard - Explain the potential value of a BSC to Anthony's Orchard. Describe specific ways that the introduction of a BSC can contribute to this organisation.
James and Suzanne engaged in the grocery business as partners. In one year they earned considerable money, and at the end of the year they invested a part of the profits in oil land, taking title to the land in their names as tenants in common. The i..
To calculate the total asset turnover, the following financial statements are needed:
Energy Tech company issued an 8% (semi-annual payment) 20 year bond 5 years ago. If the yield of similar bond today is 6%, what is the bond price? What is the current yield?
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how many of each should be stocked and sold for maximum revenues? What is the maximum revenue?
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