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Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help this, compute the cost of capital for the firm for the following: a. A bond that has a $1,000 par value (face value) and a contract or a coupon interest rate of 12.2%. The bond is currently selling for a price of $1,129 and will mature in 10 years. The firm's tax rate is 34%. b. If the firm's bonds are not frequently traded how would you go about determining a cost of debt for this company? c. A new common stock issue that paid $1.78 dividend last year.
The par value of the stock is $16 and the firm's dividends per share have grown at a rate of 8.9% per year. The growth rate is expected to continue in the foreseeable future. The price of the stock now is $27.56. d. A preferred stock paying a 13.1% dividend on $122 par value. The preferred shares are currently selling for $150.55. e. A bond selling to yield 12.1% for the purchaser of the bond. The borrowing firm faces a tax rate of 34%.
A 20-year bond pays 12% on a face value of $1,000. If similar bonds are currently yielding 9%, Find out the market value of bond? Use annual analysis.
You want to have $80000 in a bank account that earns 12% annually. You will make deposits at the end of each of the next 19 years. How much must those annual payments be?
Through your financial services firm, vestin capital, INC., you have raised a pool of money from clients. you intend to invest it in new business opportunities. to prepare for this endeavour.
Computation of value of bond and Ccalculate the expected return on the stock of Mitro Corporation
Define cash conversion cycle (CCC) and explain why, holding other things constant, a firm's profitability would increase if it lowered its CCC.
A project costs $101,000 and is expected to generate cash flows of $31,000 per year for the next 15 years. At what rate is the NPV equal to zero?
All sales revenues will be collected in cash and costs other then depreciation and amortization must be paid for during the years. Stanley's federal plus state tax rate is 40%. Stanley has no debt.
Mason Corp. paid a dividend of $1.85 per share last quarter on its common stock. The company's stock is currently selling for $88.45 per share, and the growth rate in dividends is 6%. Find the expected rate of return for Mason common stock.
Explain the role the government plays in personal finance (focus on regulations, laws, economic policy, etc.).
Diagram the expanded DuPont system for Hunter for 2006. Insert the appropriate dollar amounts wherever possible. c. Use the Du Pont system to calculate the return on assets for the two years, and determine why they changed.
What was the average annual rate of return on long-term corporate bonds during the period 1926 to 2008.
An organization that does not invest in its employees may be less attractive to prospective employees and may have a more difficult time retaining current employees"
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