What is the expected interest rate, Financial Accounting

You are the Genesis accountant and have taken a class recently in financing. You agree to prepare a PowerPoint presentation of approximately 6-8 minutes using the examples and information below: 

1. Debt: Jones Industries borrows $600,000 for 10 years with an annual payment of $100,000. What is the expected interest rate (cost of debt)?

2. Internal common stock: Jones Industries has a beta of 1.39. The risk-free rate as measured by the rate on short-term US Treasury bill is 3 percent, and the expected return on the overall market is 12 percent. Determine the expected rate of return on Jones's stock (cost of equity). Here are the details:

Jones Total Assets

$2,000,000

Long- & short-term debt

$600,000

Common internal stock equity

$400,000

New common stock equity

$1,000,000

Total liabilities & equity

$2,000,000

Develop a 10-12-slide presentation in PowerPoint format. Perform your calculations in an Excel spreadsheet. Cut and paste the calculation into your presentation. Include speaker's notes to explain each point in detail.

 

 

Posted Date: 3/22/2013 3:57:05 AM | Location : United States







Related Discussions:- What is the expected interest rate, Assignment Help, Ask Question on What is the expected interest rate, Get Answer, Expert's Help, What is the expected interest rate Discussions

Write discussion on What is the expected interest rate
Your posts are moderated
Related Questions
SUBSIDIARY COMPANIES (1AS 27) A subsidiary company is a company in which the investing company (also called holding or parent company) controls the financial and operating polici

Write at least 7 full pages that analyzes the internal and external environments for your organization. This paper must be in essay form. [If you have formatting questions, refer t

1. Consider the following balance sheet: Best Care HMO                  Balance Sheet               June 30, 2007 Assets  / Current Assets*

1a. Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods p

Find the current value of the following ordinary annuities. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to se

Question: The following data are obtained from the record of a factory:                                                        £                   £ Sales 4,000 units @ £2

Liquidity Ratios - These ratios include the Current Ratio and the Quick Ratio or the acid test ratio. Liquidity ratios show the Liquid position of a company in the short term i.e

On December 15, 2011 Risby Sales Co. sold a track of land that cost $3,600,000 for $4,500,000. Rigsby appropriately uses the installment sale method of accounting for this transact

Omission to do something which a reasonable man, guided by those ordinary considerations that ordinarily regulate human affairs, would do or doing of something that a reasonable an

the following information relates to Thomas limited who decide to commence business on 01 January 2016 with R375000 cash: what is his budget for February, march, April?