Consider a firm with EBIT of $125,000, debt of $500,000. If the rd is 12%, the rsU= 16% and the corporate tax rate is 40%, then what is the value of the firm (VL) according to MM with corporate taxes? $475,875 $528,750 $587,500 $668,750 $710,875

An 7% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 7.5197%. What is the bond's price? Round your answer to the nearest cent. What is the bond's YTM?

You own 500 shares of Stock A at a price of $85 per share, 300 shares of Stock B at $105 per share, and 800 shares of Stock C at $38 per share. The betas for the stocks are 1.2, 1.5, and .7, respectively. What is the beta of your portfolio?

You are trying to pick the leastexpensive car for your new delivery service. You have two choices: the Scion xA, which will cost $18,000 to purchase and which will have OCF of –$2,000 annually throughout the vehicle’s expected life of three years as..

You just won the lottery! Which would you rather have and why? $2,500,00 right now or $500,000/year for 6 years assuming a 8% required and you are paid installments at the end of the year.

What can be done to improve ethics in finance? What can be done to improve ethics in corporate governance?

A bond was issued 3 years ago at a coupon rate of 6%. Since then, interest rates have declined to 4%. The bond matures 20 years from today. Compute the current market value of this bond.

Holdup Bank has an issue of preferred stock with a $5.35 stated dividend that just sold for $90 per share. What is the bank’s cost of preferred stock?

Star, Inc. a prominent consumer products firm, is debating whether or not to convert its allequity capital structure to one that is 35% debt. Currently there are 6,000 shares outstanding and the price per share is $58. EBIT is expected to remain at ..

Bonds of Riverhawk Sport Authority (RSA) are selling in the market for $957.10. These bonds carry a 9.50 percent coupon paid semiannually, and have 20 years remaining to maturity. What is the bond’s yield to maturity?

You have just had your 30th birthday. You have two children, one of which will go to college 10 years from now and require four beginningoftheyear payments for college expenses of $10,000, $11,000, $12,000, and $13,000. What equal, annual, and end..

Two investments, C and D are being evaluated. They are mutually exclusive. Investment C has a higher NPV using any discount rate between zero and 9%, while D has a higher NPV using any discount rate between 9.1% and 15%. Which investment do you recom..
