Reference no: EM13919503

QUESTION 1. If the market value of debt is $155,527, market value of preferred stock is $78,829, and market value of common equity is 312,100, what is the weight of preferred stock? ?Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer.

QUESTION 2. Several years ago, the ABC Company sold a $1,000 par value bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $925 and the company's tax rate is 40%. What is the after-tax cost of debt?

QUESTION 3. ABC Industries will pay a dividend of $2 next year on their common stock. The company predicts that the dividend will increase by 7 percent each year indefinitely. What is the dividend yield if the stock is selling for $29 a share??Enter your answer in percentages rounded off to two decimal points. DO not enter % in the answer.

QUESTION 4. The 8 percent annual coupon bonds of the ABC Co. are selling for $880.76. The bonds mature in 10 years. The bonds have a par value of $1,000 and payments are made semi-annually? What is the before-tax cost of debt??Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer.

QUESTION 5. The 7 percent annual coupon bonds of the ABC Co. are selling for $950.41. The bonds mature in 8 years. The bonds have a par value of $1,000 and payments are made semi-annually. If the tax rate is 35%, what is the after-tax cost of debt??Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer.

QUESTION 6. ABC Inc.'s perpetual preferred stock sells for $69.4 per share, and it pays an $8.1 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of $4 per share. What is the company's cost of preferred stock for use in calculating the WACC??Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 7. The 8.5 percent annual coupon bonds of the ABC Co. are selling for $1,179. The bonds mature in 12 years. The bonds have a par value of $1,000. If the tax rate is 30%, what is the after-tax cost of debt??Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer.

QUESTION 8. ABC, Inc., has 113 shares of common stock outstanding at a price of $97 a share. They also have 397 shares of preferred stock outstanding at a price of $54 a share. There are 414, 8 percent bonds outstanding that are priced at $33. The bonds mature in 16 years and pay interest semiannually. What is the capital structure weight of the preferred stock??Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer.

QUESTION 9. The 8 percent annual coupon bonds of the ABC Co. are selling for $1,080.69. The bonds mature in 10 years. The bonds have a par value of $1,000. What is the before-tax cost of debt??Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer.

QUESTION 10. The before-tax cost of debt is 9 percent. What is the after-tax cost of debt if the tax rate is 48 percent? ?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 11. ABC Industries will pay a dividend of $3 next year on their common stock. The company predicts that the dividend will increase by 7 percent each year indefinitely. What is the firm's cost of equity if the stock is selling for $21 a share??Enter your answer in percentages rounded off to two decimal points. DO not enter % in the answer.

QUESTION 12. The ABC Company has a cost of equity of 23.1 percent, a pre-tax cost of debt of 9.8 percent, and a tax rate of 30 percent. What is the firm's weighted average cost of capital if the proportion of debt is 20.4%??Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 13. You were hired as a consultant to ABC Company, whose target capital structure is 35% debt, 15% preferred, and 50% common equity. The before-tax cost of debt is 6.50%, the yield on the preferred is 6.00%, the cost of common stock is 11.25%, and the tax rate is 40%. What is the WACC??Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 14. If the market value of debt is $114,756, market value of preferred stock is $103,266, and market value of common equity is 175,648, what is the weight of common equity? ?Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer.

QUESTION 15. If last dividend = $6.3, g = 4.5%, and P0 = $75.6, what is the stock's expected total return for the coming year??Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 16. A stock is expected to pay a dividend of $1.6 at the end of the year. The required rate of return is rs = 9.6%, and the expected constant growth rate is g = 7.1%. What is the stock's current price??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 17. If D1 = $2.8, g (which is constant) = 3.3%, and P0 = $73.9, what is the stock's expected total return for the coming year??Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 18. A stock just paid a dividend of $1.3. The required rate of return is 17.9%, and the constant growth rate is 5%. What is the current stock price?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 19. ABC's last dividend paid was $1.4, its required return is 17.5%, its growth rate is 6.1%, and its growth rate is expected to be constant in the future. What is Sorenson's expected stock price in 7 years, i.e., what is P7??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 20. ABC is expected to pay a dividend of $4.1 per share at the end of the year. The stock sells for $55 per share, and its required rate of return is 19.5%. The dividend is expected to grow at some constant rate, g, forever. What is the growth rate (i.e. solve for g)??Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 21. ABC's stock has a required rate of return of 15.1%, and it sells for $44 per share. The dividend is expected to grow at a constant rate of 6.9% per year. What is the expected year-end dividend, D1??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 22. The common stock of Wetmore Industries is valued at $62.8 a share. The company increases their dividend by 5 percent annually and expects their next dividend to be $2.6. What is the required rate of return on this stock??Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 23. If D1 = $3.08, g (which is constant) = 2%, and P0 = $37.17, what is the stock's expected dividend yield for the coming year??Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer.

QUESTION 24. ABC's last dividend was $3.2. The dividend growth rate is expected to be constant at 31% for 3 years, after which dividends are expected to grow at a rate of 7% forever. If the firm's required return (rs) is 11%, what is its current stock price (i.e. solve for Po)??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.
. ABC just paid a dividend of D0 = $1.7. Analysts expect the company's dividend to grow by 31% this year, by 24% in Year 2, and at a constant rate of 6% in Year 3 and thereafter. The required return on this stock is 16%. What is the best estimate of the stock's current market value??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 26. A stock just paid a dividend of D0 = $2.3. The required rate of return is rs = 12%, and the constant growth rate is g = 5%. What is the current stock price??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 27. ABC Enterprises' stock is expected to pay a dividend of $1.8 per share. The dividend is projected to increase at a constant rate of 6.9% per year. The required rate of return on the stock is 16.2%. What is the stock's expected price 3 years from today (i.e. solve for P3)??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 28. ABC Inc., is expected to pay an annual dividend of $4.4 per share next year. The required return is 17.5 percent and the growth rate is 4.6 percent. What is the expected value of this stock five years from now?? ?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 29. The common stock of Connor, Inc., is selling for $64 a share and has a dividend yield of 3.8 percent. What is the dividend amount??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 30. A stock's next dividend is expected to be $1.5. The required rate of return on stock is 19.9%, and the expected constant growth rate is 6.2%. What is the stock's current price??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 31. ABC Company's last dividend was $0.8. The dividend growth rate is expected to be constant at 17% for 2 years, after which dividends are expected to grow at a rate of 6% forever. The firm's required return (rs) is 16%. What is its current stock price (i.e. solve for Po)??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.

QUESTION 32. ABC Enterprises' stock is currently selling for $60.3 per share. The dividend is projected to increase at a constant rate of 5.3% per year. The required rate of return on the stock is 12%. What is the stock's expected price 5 years from today (i.e. solve for P5)??Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer.