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Gil Corp. considers the following capital optimal: 40% debt, 50% equity, and 10%prefered stock. Guls stock currently sells for $50 per share. Guls beta is 1.8. The risk free rate is 9% and the expected rate of return is 13%. Guls bond currently sells for $1150. The bond carries an annual coupon payment of 12% of face value which is paid in 2 semiannual payment. The bond will mature in 15 years and it's face value is $1000. The bond annual yield to maturity is 10.04%. The firms marginal tax is 40 percent. The guls required return on the prefered stock is 13%. What is the firms overall cost of capital (WACC)?
In general, what are the qualitative pros and cons for domestic sales of having multiple distribution centers and shipping locations in the United States
Assume that River Cruises, which currently is all-equity-financed, issues $250,000 of debt and uses the proceeds to repurchase 16,667 shares. Suppose that the company pays no taxes and that debt finance has no impact on its market value.
Your firm has a debt-equity ratio of 0.75. Your pre-tax cost of debt is 8.5% and your required return on assets is 15%. What is your cost of equity if you ignore taxes?
The concept of "passage of risk" means that the responsibility for loss or damage to goods shifts from the seller to the buyer.
Antiques R Us is a mature manufacturing firm. The Company's last dividend was $9, but management expects to reduce the dividend payout by 4% per year indefinitely. The required rate of return is 11%. What will you pay for a share today?
for a portfolio of illiquid assets hedge fund managers often have considerable discretion in portfolio valuation at the
The prices for IMB over the last 3 years are given below. Assuming no dividends were paid, what was the 3-year holding period return? Year Price 0 $ 70 1 64 2 68 3 80
Wilton's Market is an all-equity firm with a total market value
Image Storage Corporation has #1,000,000 shares outstanding. It wishes to issue 500,000 new shares using rights issue. If the current stock price is $50 and the subscription price is $47/share, calculate the value of a right? a. 0.40/right b. 5.00..
Jones Soda estimates that its cost of capital is 7.30 percent. You observe that the company's required return on stock is 15.00 percent and the (after-tax) yield to maturity on its debt is 4.00 percent. What is the debt-to-equity ratio?
Identification of capital and revenue expenditure and A new machine was accidently damaged during installation
Do you believe that there was sufficient financial information to make a solid decision on what to do - Was there further financial information that you required that was not provided to you?
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