Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
(Individual or component costs of capital) Compute the cost of capital for the firm for the following:
a. A bond that has a $1000 par value (face value) and a contract or coupon interest rate of 11 percent. Interest payments are $55.00 and are paid semi annualy. The bonds have a current market value of $1125 and will mature in 10 years. The firm's marginal tax rate is 34 percent.
b. A new common stock issue that paid a $1.80 dividend last year. The firm's dividends are expected to continue to grow at 7 percent per year, forever. The price of the firm's common stock is now $27.50.
c. A preffered stock that sells for $125, pays a 9 percent dividend, and has a $100 par value.
d. A bond selling to yield 12 percent where the firm's tax rate is 34 percent.
What is the price of a U.S. Treasury bill with 100 days to maturity quoted at a discount yield of 1.40 percent? Assume a $1 million face value.
Pierce Furnishings generated $4 million in sales during 2012, and its year-end total assets were $3.2 million. Also, at year-end 2012, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,..
Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 62,500 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $..
Consider the following sequence of prices for a currency futures contract. Each contact involves 10,000 units of the foreign currency. The initial and maintenance margin requirements are USD 800 and USD 500, respectively.
The treasurer of a large corporation wants to invest $44 million in excess short-term cash in a particular money market investment. The prospectus quotes the instrument at a true yield of 3.56 percent; that is, the EAR for this investment is 3.56 per..
A Treasury bill has a bid yield of 2.13% and an ask yield of 2.09%. The bill matures in 209 days. Assume a face value of $1,000. What is the least you could pay to acquire a bill?
The outstanding bonds of Roy Thomas inc provide a real rate of return of 3.5%.the current rate of inflation is 2.1 %. What is the nominal rate of return on these bonds?
First-year NOI for a long-term net lease is expected to be $50,000. Rent is escalating at a rate of 3 percent per year, but there is a two-year period between adjustments. Thus, the income for years 1 and 2 will be $50,000, increasing to $50,000 (1+...
What are the required rates of returns on both stocks using the CAPM model? What are the expected rates of return of both stocks using the dividend growth model. Which stock would you recommend to purchase or sell? Why?
Based on the following data, would you recommend buying or renting? Rental Costs- Annual costs- Annual rent $7,380, Insurance $145. Security deposit $ 650. - Buying Costs- Annual mortgage payments $9,800 ($9,575 is interest), Property taxes $ 1,780, ..
(Computing interest tax savings) Dharma Supply has earnings before interest and taxes (EBIT) of $544000, interest expenses of $274000, and face a corporate tax rate of 34 percent.
Suppose that every time a fund manager trades stock, transaction costs such as commissions and bid–ask spreads amount to .4% of the value of the trade. If the portfolio turnover rate is 50%, by how much is the total return of the portfolio reduced by..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd