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Your firm has debt worth $200,000, with a yield of 10 percent, and equity worth $400,000. It is growing at a seven percent rate, and faces a 40 percent tax rate. A similar firm with no debt has a cost equity of 15 percent. Under the MM extension with growth, what is its cost of equity?
Merton Enterprises has bonds on the market making annual payments, with 14 years to maturity, and selling for $967. At this price, the bonds yield 7.9 percent. What must the coupon rate be on Merton's bonds?
question 1.nbsp for a two-tailed hypothesis test about mu we can use any of the following approaches except a. compare
Find out the total discount or premium for each issue. Find out the annual amount of discount or premium amortized for each bond.
Some corporations' debt-equity targets are expressed not as a debt ratio but as a target debt rating on the firm's outstanding bonds. What are the pros and cons of setting a target rating rather than a target ratio?
Since the Fed has no direct influence over the bond market, explain why indirectly monetary policy can move the long bond.
Thereafter, dividends will grow at 7% per year. What will Bling Diamond's cahs dividends be in seven years?
Ziggs corporation will pay a $4.60 per share dividend next year. the company pledges to increase its dividend by 6.75 percent per year, indefinitely if you require a 11 percent return on your investment.
A 25-year Treasury bond is issued with face value of $1,000, paying interest of $62 per year. If market yields increase shortly after the T-bond is issued, what is the bond's coupon rate?
indicate whether the following increases and decreases represent a debit or credit for each particular account.a
The company is considering a new issue of perpetual debts of $1,000,000 to buy back its stocks. The new debts will have the same yield as the existing debts. The tax rate is of 30%.
By how much does the required return on the riskier stock exceed the required return on the riskier stock exceed that on the less risky stock? Round your answer to two decimal places.
Inflation is expected to be 4% over the next 12 months. Economists believe the pure the pure interest rate is currently about 3 1/2%.
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