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Calculate the WACC under the following assumptions: long-term bonds offer a yield of 8%, stock price is $50 per share, dividend is $2/share, dividend expected to grow at a constant 6% per year, target capital structure is 75% equity and 25% debt, tax rate is 40%
ABC firm has a debt to equity ratio of 2.3 (that they wish to maintain) and new investments would cost $35 million this year. The firm expects earnings of $12 million this yea
Your consulting firm will produce cash flows of $180,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate c
Measured by the standard deviation of returns, by how much would your uncle's risk have been reduced if he had held a portfolio consisting of 60% in ECB and the remainder in W
A bond with an annual coupon of $100 originally sold at par for $1,000. The current yield to maturity on this bond is 9%. Assuming no change in risk, this bond would sell at a
Nymeria buys a promissory note off of Yolanda for $300. Nymeria buys the note in good faith, and she is unaware of the fact that Yolanda secured the note from Georgia throug
The O. Bama Company plans to increase its equity capital by the issue of new shares (SEO) with a subscription ratio of 4:1 (one new shares for four old ones). The current pr
An office building is available for sale in Parma Heights. Cash flows from rent amount to $53,000 per year, every year, for the next ten years. Financing arrangements are ma
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