Reference no: EM131064544
1. The corporate treasurer of Gonic Manufacturing Company expects the company to grow at 4% in the future. She notes that debt will have an interest rate of 4% interest and the corporate tax rate is 35%. She believes that debt will be a cheaper option to finance the growth. The current market price per share of its common stock is $19, and the expected dividend in one year is $0.75 per share. Calculate the cost of the company's retained earnings and check if the treasurer's assumption is correct.
2a. The risk-free rate on 30 year U.S. Treasury bonds is 2.75% and the expected rate of return on the overall stock market is 7%. The BOW company has a beta of 1.4. What is the cost of equity?
2b. Les argues that the 10 year note is a better risk free rate at 2%. He also argues that the stock market is too high and the expected return is really only 5%. Assume that he is correct. The company has a beta of 1.4. What is the cost of equity?
3. A company, East Berwick Enterprises, has a capital structure as follows:
|
Total Capital
|
$1,000,000
|
|
Debt
|
$400,000
|
|
Preferred Stock
|
$100,000
|
|
Common Equity
|
$500,000
|
What would be the minimum expected return from a new capital investment project to satisfy the suppliers of the capital? Assume the applicable tax rate is 40%, interest on debt is 5%, flotation cost per share of preferred stock is $0.75, and flotation cost per share of common stock is $4. The preferred and common stocks are selling in the market for $24 and $130 a share respectively, and they are expected to pay a dividend of $1.50 and $4.50, respectively, in one year. The company's dividends are expected to grow at 5% per year. The firm would like to maintain the existing capital structure to finance the new project.
|
President of the confederate states of america
: He was the President of the Confederate States of America, Commander - in - Chief of the Confederate Army, a colonel in the United States Army during the Mexican-American War, Secretary of War and also a United States Senator.
|
|
Determine the quantity that would be produced at this price
: Algebraically, determine what price Katrina's Candies should charge in order for the company to maximize profit in the short run. Determine the quantity that would be produced at this price and the maximum profit possible
|
|
Every matrix is row equivalent to a unique matrix in echelon
: Every matrix is row equivalent to a unique matrix in echelon form.
|
|
Prepare a report analysing the important features of qube
: Prepare a word report analysing the important features of Qube, and identify logistics management strategies to resolve the issues.
|
|
What would be the minimum expected return from a new capital
: What would be the minimum expected return from a new capital investment project to satisfy the suppliers of the capital? Assume the applicable tax rate is 40%, interest on debt is 5%.
|
|
The managing director of a company
: The managing director of a company is having a discussion with the employee's representative regarding pay increases for the coming year. As a basis for their discussions both have investigated the present national average for the company's sector..
|
|
Evaluate the underpinnings of the logic of both philosophies
: Where do the followers and leaders tend to practice? What rituals do they engage in? What unique key themes or concepts-other than logic, time, and epistemology-do they appreciate, worship, and extol?
|
|
Higher education by the higher education statistics agency
: Statistics are published annually on Higher Education by the Higher Education Statistics Agency (HESA), and among these are figures on Destinations of Leavers from Higher Education (DLHE).
|
|
What is the sentiment in comments towards the campaign
: How many comments are received? What is the sentiment in comments towards the campaign? (Potential sub-questions: what campaign topics create the most positive and negative comments? Is sentiment worse or better in longer discussions?)
|