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Finance is Fun Ltd has the following structure: $10,000,000 four year bonds with a coupon of 8.5% trading at 94% and 3 million shares trading at $3.90. The market rate of return 13% and the risk free rate of return is 5%. Finance is Fun has a beta of 1.25 and pays tax at 35%. Calculate the WACC of Finance is Fun.
Your company "Digitup Ltd" needs a new earth moving machine which it can buy for USD 80,000 or lease for 5 years, with lease payments due at the start of each year.
If the leasing company can get a superior discount and buy the machine for USD 70,000 and depreciate it over 5 years to zero terminal value with maintenance and administration costs of $13,500 p.a. with zero inflation, cost of capital at 6% and taxation at 28% what is the break even lease that the company will charge?
Is this lease attractive to Digitup if its cost of capital is 8%?
Your company has a bond in issue with one year to run and a coupon of 9% which is your normal cost of capital. You notice that it has been trading at 55% lately and you are told that there is a market rumour that you will only pay back 40% of the debt. What is the implicit market estimate of the probability of your company defaulting?
You are the senior financial analyst at a mid-sized manufacturing firm in the Chicago area. Your supervisor, the VP of Finance, has asked your help in choosing between two capital projects
What is the after-tax cost of debt if the tax rate is 34% and explain what other methods you could have used to find the cost of debt for AirJet Best Parts Inc.
An employer uses a final payment method to estimate retirement payouts to its employees. The yearly payout is 3% of the average salary over the employees' last 3-years of service times the total years employed.
Create a scatterplot between the variable that you selected in requirement 2 and sales. Properly label your chart - Regression Mastery Problem
Calculate the company's return on equity and whether the managers areproviding a good return on the capital provided by the company's shareholders.
On the basis of this information, estimate the current value of each security, showing calculations for all parts
Calculate operating cash flow and the change in net working capital and determine the NPV and IRR of the project.
What is the amount to use as the annual sales figure when evaluating this project? Why?
journal entries related to bonds.higher corporation owned 51 of the voting common stock of manato inc. the parents
select the incremental cash flows from the options.1.nbspwhich of the following cash flows are relevant incremental
1 if interest rates rise over the next year which bond will lose the most value? why?2 explain why the higher rated
Suppose you own stock in the Lewis-Striden Drug Corporation. Assume you had expected following events to occur last month: and the government would declare that real GNP had increase 1.2% during the previous quarter.
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