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Weighted Average Cost of Capital. Valie Enterprises, Inc., has compiled the following investments:
Type of Capital
Book Value
Market Value
After-Tax Cost
Long-term debt
$3,000,000
$2,800,000
4.8%
Preferred stock
102,000
150,000
9.0%
Common stock
1,108,000
2,500,000
13.0%
$4,210,000
$5,450,000
(a) Calculate the weighted average cost of capital, using (1) book value weights and (2) market value weights. (b) Explain the difference in the results obtained in (a).
Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept-reject decision for each.
santiago hernandez is planning to invest 25000 in a money market account for two years. the account pays interest of
How much less could you have deposited last year if you could have earned a fixed rate of 6.5 percent and still have the same amount as you currently will when you retire 38 years from today?
Calamity Mining Corporation's iron ore reserves are being depleted, and its expenses of recovering a declining quantity of ore are rising each year. As a result, the corporation's earnings are declining at a rate of 10% per year.
The rate is prime plus 2 percent. The prime rate was 8.5 percent at the beginning of the loan and changed to 9 percent after two months. This was the only change. How much interest must XYZ corporation pay?
stagnant iron and steel currently pays a 12.25 annual cash dividend d0. they plan to maintain the dividend at this
Diversification is assumed to reduce risks. Describe diversification mean in the context of corporate finance, and how does it reduce risks in that context?
The firm has a pre-tax cost of debt of 8.1 percent. The risk-free rate is 4.3 percent and the market rate of return is 13.6 percent. What is Burleigh's WACC?
DESCRIBE HOW A CHECK DRAWN ON A COMMERCIAL BANK IN NEW YORK CITY BUT DEPOSITED FOR COLLECTION IN ANOTHER BANK IN A DISTANT CITY SUCH AS SAN FRANCISCO MIGHT BE CLEARED THROUGH THE FACILITIES OF THE FEDERAL RESERVE SYSTEM.
find the present value of 3500 under each of the following rates and periodsa. 8.9 percent compounded monthly for five
milwaukee surgical supplies inc. sell on term of 310 net 30 gross sales for the year are 1200000and the collections
MEC's tax rate is 40%. Two projects are available: Project A has a rate of return of 14%, while Project B's return is 9%. These two projects are equally risky and about as risky as the firm's existing assets.
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