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Total market value of a company $60million. During the year, company plans to invest $30mil in new projects. based on the firm's present market value capital structure (Debt $30mil, Common Equity $30mil) which is considered optimal. No short term debt. New bonds will have 6% coupon rate, sold at par. Common stock is currently selling at $30/share. Stockholder's required rate of return is 12% consisting of a dividend yield of 4% and and expected constant growth rate of 8%; next expected div is $1.20 so $1.20/$30=4%. Marginal Corporate Tax rate 30%. In order to maintain present capital structure, how much of the new investment must be financed by common equity. Answer in dollars. And assuming there is sufficient cash flow such that target captil structure can be maintained without issuing additional shares of equity, what is its WACC, rounded to two decimal places.
1. critique the use of bank debit cards. bank debit cards are becoming a popular alternative to using checks or credit
The rate of return you would get if you bought a bond and held it to its maturity date is called the bond's yield to maturity. If interest rates in the economy rise after a bond has been issued.
Assuming a stock price and volume chart that also contains a 50-day and a 200-day MA line, describe a bearish pattern with the two MA lines and discuss why it is bearish.
EEM, Corporation has the following balance sheet, It has determined the following relationships between sales and the various assets and liabilities that vary with the level of sales.
Assuming that a organization is privately held, wants to expand operations, and is faced with three options for expansion: Going public through an IPO, Acquiring another organization in the same industry, Merging with another organization.
A 10 year, 12% semiannual coupon bond with a pair value of $1,000 may be called in a 4 years at a call price of $1,060. The bond sells for $1,100 (assume that the bond has just been issued)
Give the reason why more foreign firms do not sell equity securities in the U.S.
with the growth of hard rock cafe - from one pub in london in 1971 to more than 110 restaurants in more than 40
Determine the implications of a change in the return on equity with an increase in debt financing?
Assuming you have equal confidence in the inputs used for the three approaches, what is your estimate of Carpetto's cost of common equity? Round your answer to two decimal places.
Calculate the terminal value of the tax shield given the following information. Assume we are calculating it for the next year (that is, assume there is no planning period, just a terminal value). The tax rate is 30%. Debt will be $111 million.
have $1,000 in one year. A bank is offering loans at 6%. How much can you borrow today?
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