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Cost of Capital. Blues, Inc., is an MNC located in the United States. Blues would like to estimate its weighted average cost of capital. On average, bonds issued by Blues yield 9%. Currently, Treasury security rates are 3%. Furthermore, Blues' stock has a beta of 1.5, and the return on the Wilshire 5000 stock index is expected to be 10%. Blues' target capital structure is 30% debt and 70% equity. If Blues is in the 35% tax bracket, what is its weighted average cost of capital?
15.30%
13.45%
11.21%
9.32%
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Several years ago, Castles in the Sand, Inc., issued bonds at face value at a yield to maturity of 5.8%. Now, with 5 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased ..
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The Sterling Tire Company's income statement for 2013 is as follows: Sterling Tire Company. Income Statement
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According to Thomas Kuhn, what are three ways that a new paradigm might differ from the paradigm that is replaces? Also, what is the difference between paradigms that are incompatible and those that are incommensurable?
A furniture manufacturer produces both large desks and small desks (in whole numbers). Each type of desk is made entirely out of pine or entirely out of cherry. A total of 1000 board feet of pine and 1100 board feet of cherry are available for produc..
Maloney, Inc. has decided to sell 2,500 shares of stock. The bids received are as follows: Bidder A, quantity 500 price/share $23; Bidder B quantity 800 price/share; Bidder C quantity 1,000 price/share $21; Bidder D quantities 1,500 price/share $20; ..
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Describe concept of future value and present value
A firm has a long-term debt-equity ratio of .4. Shareholders’ equity is $1 million. Current assets are $200,000, and the current ratio is 2. The only current liabilities are notes payable. What is the total debt ratio?
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