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a. Find WACC given: (show all steps please)
Debt: 10,000 6% coupon bonds outstanding, $1,000 par value, 10 years to maturity, selling at par, quarterly payment.
Comment stock: 500,000 shares outstanding, selling for $25 per share, the beta is 1.2.
Preferred stock: 15,000 shares of 5 percent preferred stock outstanding, currently selling for $93 per share.
Market: 8 percent market risk premium and 4.5 percent risk-free rate.
b. Now adjusts the cost of debt to 6% and its debt-to-equity ratio to 1.5 times. What will be the cost of equity? (There is no tax)
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this case is intended to be an introduction to the various methods used in capital budgeting and looks at some of the
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Suppose that a health care organization had revenues of $300,000 for March and that the payer mix is as follows: PAYER PERCENT OF PATIENTS PAYMENT LAG Medicare 40 3 months Medicaid 20 3 months Blue Cross 15 2 months Other insurer 15 1 month Self-pay ..
Assume that the risk-free rate is 2.5% and the expected return on the market is 8%. What is the required rate of return on a stock with a beta of 1.5?
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