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Total market value of a company $60million. During the year, company plans to invest $30mil in new projects. based on the firm's present market value capital structure (Debt $30mil, Common Equity $30mil) which is considered optimal. No short term debt. New bonds will have 6% coupon rate, sold at par. Common stock is currently selling at $30/share. Stockholder's required rate of return is 12% consisting of a dividend yield of 4% and and expected constant growth rate of 8%; next expected div is $1.20 so $1.20/$30=4%. Marginal Corporate Tax rate 30%.
In order to maintain present capital structure, how much of the new investment must be financed by common equity.
Answer in dollars. And assuming there is sufficient cash flow such that target captil structure can be maintained without issuing additional shares of equity, what is its WACC, rounded to two decimal places.
We invest $1,000 in an account earning 6% per year for 3 years. What is the net present value of our investment if the nominal interest rate is 5%?
Make an expanded analysis on financial statements of Toyota Motors. Please employ the most current financial statements available on www.sec.gov.
Calculate total annual inventory cost under EOQ. How does this compare to her current inventory costs.
A risk-free asset in the United State is currently yielding 4 percent while a Canadian risk-free asset is yielding 2%. Assume the current spot rate is C$1.2103.
Interest Rate: South Penn Trucking is financing a new truck with a loan of $10,000 to be repaid in 5 annual end-of-year installments of $2,504.56. What annual interest rate is the company paying?
Rockwell paper company had earnings after taxes of $580,000 in the year 2003 with 400,000 shares of stock outstanding. On January 1, 2004, the firm issued 35,000 new shares. Calculate earnings per share for year 2004.
If your firm buys $100 worth of supplies on credit with terms 3/10 n30 and pays the bill on the 30thday after the purchase.
Your father is about to retire, and he wants to buy an annuity that will provide him with $91,000 of income a year for 25 years, with the first payment coming immediately.
You own a 20-year, $1,000 par value bond paying 7 percent interest annually. The market price of the bond is $875, and your required rate of return is 10 percent.
Corporations are constantly trying to reduce their profits by increasing or decreasing the size of their operations. They do this by mergers or acquisitions (M&A's), and/or spinoffs, downsizing and outsourcing.
Find out the amount of the specific payment needed to pay off the following purchases. Payments are made at the end of the period.
The next dividend payment by Wyatt, Inc., will be $3.40 per share. The dividends are anticipated to maintain a growth rate of 7.75 percent, forever. Assume the stock currently sells for $50.40 per share.
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