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Common equity is 16% and its before tax cost is 13% and its marginal tax rate is 40%. Assume that the firm's long term debit sells at par value. The firm has 576 shares of common stock outstanding that sells for $4.00 per share. Calculate the WACC using market value weights.
Assets Liabilities & Equity
Cash $120
Accts Rec $240
Inventories $60 Long term debt $1152
Plant & Equipment $2160 Common Equity $1728
Total Assets $2880 Total liabilities & Equity $2880
Your company issued a 10% coupon rate bond with face valueof $1000. The bond pays interest rate semiannually, and the bond has 20-year to maturity. If required interest rate on bond is 8%, what is the bond's value? If required rate suddenly rise to 1..
as part of its international expansion program acme a u.s. multinational enterprise mne is currently in the planning
Suppose you decide to invest in corporate bonds. Accordingly, you visit a bond store. You see 3 bonds on the shelf. One is priced at $1,015.53, another is priced to sell at $1,300.00, and a third is selling at a discounted amount of $876.06. But you ..
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nfec use the last two fiscal years financial statements of the publicly-traded company you selected and calculate the
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A project has the following estimated data: price = $54 per unit; variable costs = $29.16 per unit; fixed costs = $6,100; required return = 16 percent; initial investment = $13,000; life = three years. Ignoring the effect of taxes, the accounting bre..
Consider two perfectly negatively correlated risky securities K and L. K has an expected rate of return of 13% and a standard deviation of 19%. L has an expected rate of return of 10% and a standard deviation of 16%. What are the weights of K and L i..
A company's 8% coupon rate, semi-annual payment, $1,000 par value bond that matures in 25 years sells at a price of $558.92. The company's federal-plus-state tax rate is 30%. What is the firm's after-tax component cost of debt for purposes of calcula..
Prepare the journal entry to reflect the initial $86,000 investment and evaluate the three proposals for expansion, providing the pros and cons of each option
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Meadow Brook Manor would like to buy some additional land and build a new assisted living center. The anticipated total cost is $28 million. Management has decided to save $1.4 million a quarter for this purpose. The firm earns 6 percent compounded q..
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