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Given the following annual net cash flows determine the internal rate of return to the nearest whole percent of a project with an initial outlay of $750,000.Yr. 1 500,000Yr.2 150,000Yr.3 250,00a) 9% b) 11% C) 13% d) 15%Given the following information on S & G inc.s capital structure, compute the company’s weighted average cost of capital? Company marginal tax rate is 40%?Percent of Capital Before-Tax componentStructure costBonds 40% 7.5%Preferred Stocks 5% 11%Common Stock (Internal Only) 55% 15%a) 13.3% b) 7.1% c) 10.6% d) 10%Kelly Corp. will issue new common stock to finance an expansion. The existing common stock just paid a $1.50 dividend, and dividends are expected to grow at a constant rate 8% indefinitely. The stock sells for $45, and flotation expenses of 5% of the selling price will be incurred on new shares. What is the cost of new common stock be for kelly Corp.?a) 11.33% b) 11.51% c) 11.60% d) 11.79% e) 12.53%A company has preffered stockk that can be sold for $21 per share . The preferred stock pays an annual dividend of 3.5% base on a par value of $100. Flotation costs assoc with sale of preferred stock equal $1.25 per share. The company marginal tax rate is 35%. The cost of pere stock isa) 18.87& b) 17.72% c) 14.26% d) 12.94%Zellars, Inc. Is considering two mutually exclusive projects, A and B. Project A costs $95,000 and is expected to generate $65,000 year one and $75,000 in year two. Project B cost $120,000 and is expected to generate $64,000 in year one, $67,000 year 2, $56,000 year 3 and $45,000 year 4. Zellars, required rate of return for these projects is 10%. The internal rate of return for Project a is
Learn and Earn Company is financed entirely by Common stock that is priced to offer a 20% expected return. If the company repurchases 50% of the stock and substitutes an equal value of debt yielding 8%, what is the expected return on the common st..
Ponzi Corporation has bonds on the market with 11.5 years to maturity, a YTM of 7.20 percent, and a current price of $1,054. The bonds make semiannual payments.
Your company is planning to borrow $1,250,000 on a 9-year, 15%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal? Round your answer to two decimal plac..
Discuss the major capital budgeting methods used by corporations to evaluate projects. Why do many corporations continue to use the payback period method? Which method do you prefer? Explain why you prefer this method.
On March 31, the firm sold an additional 670 shares at a price per share of $34.5. On June 30, the firm issued an annual dividend of $2.80 per share. What was the cash flow to stockholders for the calendar year?
Find the EBIT indifference level associated with the two financing plans. The EBIT indifference level associated with the twp financing plans is $
The holders of ZZZ Corporation's bond with a face value of $1,000 can exchange that bond for 35 shares of stock. The stock is selling for $25.00. What is the conversion price?
Its depreciation and amortization expense was equal to $1,500,000. The company's tax rate is 36 percent. What is the amount of interest expense for the Corporation?
How much do you need to save each month for this purpose assuming that you have no money saved as of today ?
Suppose the exchange rate between British pounds and U.S dollars is $1.35 per pound. What is the correct way to write this pound-dollar exchange? The dollar-pound exchange rate?
What is the target stock price in one year? Assuming the company pays no dividends, what is the implied return on the company's stock over the next year?
Which project will the stockholders prefer and which project maximizes the value of the firm? Why are these answers different?
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