Weighted Average Cost of Capital The Global Advertising Co. has a tax rate of 36%. The company can raise debt at a 9% interest rate. Global's stock price is $12.71 per share and it recently issued a dividend of $0.85, which is expected to grow at a constant rate of 5%. Global's investment bankers have informed the company that the flotation cost incurred for issuing new common stock will be 10 percent of the gross issuance proceeds. Global plans to finance all capital expenditures with 30% debt and 70% equity. Determine the firm's WACC, assuming the firm has sufficient retained earnings to fund the equity portion of its capital budget. Follow the guidelines used in this course for precision of intermediate values. Present your answer as a percentage, rounded-off to one decimal place ( i.e. 12.3 ).

Nominal interest rate : Fieldstone Credit Union is offering a nominal interest rate of 2.37%, compounded monthly, on its savings accounts. If you make a single deposit of $14,571 today, how much will you have in the account in 8 years? |

The primary goal of financial managment : The primary goal of financial managment is to: 1. minimize operational costs and maximize firm efficiency. 2. maximize dividends per share of the existing stock. 3. avoid financial distress 4. maintain steady growth in both sales and net earnings. 5... |

Calculate the project regular payback : Regular Payback Blanchford Enterprises is considering a project that has the following cash flow data. Year 0 1 2 3 Cash flows: -$1,039 $318 $388 $586 Calculate the project's regular payback. Follow the guidelines used in this course for precision of.. |

The regular payback does not consider cash flows : The regular payback does not consider cash flows beyond the payback year, but discounted payback overcomes this defect. The discounted payback method recognizes all cash flows over a project's life, and it also adjusts these cash flows to account for.. |

Weighted average cost of capital : Weighted Average Cost of Capital The Global Advertising Co. has a tax rate of 36%. The company can raise debt at a 9% interest rate. Global's stock price is $12.71 per share and it recently issued a dividend of $0.85, which is expected to grow at a c.. |

Internal rate of return adolphus logistics : Internal Rate of Return Adolphus Logistics has a weighted average cost of capital of 10 percent. The company is considering a project with the following expected cash flows: Year Project Cash Flow 0 –$612 million 1 269 million 2 215 million 3 207 mil.. |

Payback assuming project weighted average cost of capital : Discounted Payback Coughlin Motors is considering a project with the following expected cash flows: Year Project Cash Flow 0 –$830 million 1 200 million 2 373 million 3 228 million 4 566 million Calculate the project's discounted payback assuming the.. |

The date it was contributed to the partnership : Sam and Drew are equal partners in SD LLC formed on June 1 of the current year. Sam contributed land that he inherited from his uncle in 2007. Sam’s uncle purchased the land in 1982 for $30,000. The land was worth $100,000 when Sam’s uncle died. The .. |

What about the ten-year bonds issued five years ago : Twenty-five years ago, the U.S. government issued thirty-year bonds with a coupon rate of about 8%. Five years ago, the U.S. government sold ten-year bonds with a coupon rate of about 5%. Suppose that the current coupon rate on newly issued five-year.. |

## How much interest is paid during the third yearYou are purchasing a house for $95,000. The lender requires a 10% down payment, and will finance the rest with a 30 year fixed rate mortgage with monthly payments at 9 7/8% (interest rate is 9.875) with two discount points charged. Calculate the bal.. |

## What is the degree of operating leverageGiven the following information, what is the degree of operating leverage? Price = $20 per unit; variable cost = $6 per unit; fixed costs = $5,000 per year; depreciation = $8,000 per year; sales = 2,000 units per year. Tax rate = 34%. |

## Calculate the financial break-even pointUse the following information to calculate the financial break-even point. Assume a discount rate of 10%, an initial project outlay of $100,000, depreciated straight line over the 10-year project life. (Ignore taxes) |

## What is the remaining balance on the loanFive years ago you took out a 5/1 adjustable rate mortgage and the five-year fixed rate period has just expired. The loan was originally for $300,000 with 360 payments at 4.2% APR, compounded monthly. Now that you have made 60 payments, what is the r.. |

## Calculate the price value of basis point and the yield valueCalculate the price value of a basis point and the yield value of a price change for a 30-year US Treasury bond with a coupon of 5%, a maturity date of 8/15/2042, a settlement date of 10/29/2012, and a price of 101:24. |

## Debating the manageability of firms cultureIt's been often said, "The more manageable a firm's culture is, the less valuable it will be for the firm." Post your supported agreement or rebuttal. Your initial discussion board post should be at least 200-250 words in length and should use at lea.. |

## What is the effective annual rate on loanYou have a car loan with a nominal rate of 7.75 percent. With interest charged monthly, what is the effective annual rate (EAR) on this loan? |

## What is the debt-equity ratioNeal Enterprises has no debt. Its current total value is $72 million. Assume the company sells $33 million in debt. Ignoring taxes, what is the debt-equity ratio? Assume the company’s tax rate is 32 percent. What is the debt-equity ratio? |

## What is the projected dividend for the coming yearFrey Corp. is experiencing rapid growth. Dividends are expected to grow at 26 percent per year during the next three years, 16 percent over the following year, and then 4 percent per year indefinitely. The required return on this stock is 10 percent,.. |

## Calculate accumulated depreciation over six yearsGenetic Insights Co. purchases an asset for $18,365. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, r.. |

## Differentiate in equity carve-outs and initial public offerDifferentiate between equity carve-outs and initial public offerings. What do research studies show about the shareholder wealth effects of each? |

## Flexible budgets and standard cost systemThis discussion forum is to expand with other resources for learning. You will perform an internet search on one of two terms. When you perform your internet search on the term of your choice, you will find several hits. Select and read a case study .. |

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