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Filer Manufacturing has 8.6 million shares of common stock outstanding. The current share price is $56, and the book value per share is $4. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $70.6 million and a coupon rate of 7.3 percent and sells tor 108 percent of par. The second issue has a face value of $60.6 million and a coupon rate of 7.8 percent and sells for 109.5 percent of par. The first issue matures in 8 years, the second in 27 years.
The company's stock has a beta of 1.2. The risk-free rate is 3.4 percent. and the market risk premium is 7.3 percent. Assume that the overall cost of debt is the weighted average implied by the two outstanding debt issues. Both bonds make semi annual payments. The tax rate is 35 percent. What is the company's WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
Mulroney Corp. is considering two mutually exclusive projects. Both require an initial investment of $10,000 at t = 0. Project X has an expected life of 2 years with after-tax cash inflows of $6,000 and $8,000 at the end of Years 1 and 2, respectivel..
Suppose the real rate is 3.4 percent and the inflation rate is 5.0 percent. What rate would you expect to see on a Treasury bill?
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Find the expected rate of return for an investor who purchases 130 shares of stocks at $33.50 per share with dividends expected to be $1.95 per share. Assume that he would sell 80 shares at $35.00.
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Explain the purpose of financial statement analysis for both external and internal users D-Identify and explain the four building blocks of financial statement analysis
Which one of the following statements is indicative of an optimal capital structure? Choose one of the following answers
You are saving to buy a $191,000 house. There are two competing banks in your area, both offering certificates of deposit yielding 7.6 percent. How long will it take your initial $108,000 investments to reach th edesired level at First Bank, which pa..
The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $6.2 million, and the 2015 balance sheet showed long-term debt of $6.4 million. The 2015 income statement showed an interest expense of $215,000. What was the firm’s 20..
Suppose that competition amongst bond brokers causes bonds to become more liquid. Using the liquidity preference model, show graphically how this will affect money demand and the nominal interest rate
You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $19,500 to purchase and which will have OCF of –$2,300 annually throughout the vehicle’s expected life of three years as..
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