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Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help this, compute the cost of capital for the firm for the following: a. A bond that has a $1,000 par value (face value) and a contract or a coupon interest rate of 12.2%. The bond is currently selling for a price of $1,129 and will mature in 10 years. The firm's tax rate is 34%. b. If the firm's bonds are not frequently traded how would you go about determining a cost of debt for this company? c. A new common stock issue that paid $1.78 dividend last year.
The par value of the stock is $16 and the firm's dividends per share have grown at a rate of 8.9% per year. The growth rate is expected to continue in the foreseeable future. The price of the stock now is $27.56. d. A preferred stock paying a 13.1% dividend on $122 par value. The preferred shares are currently selling for $150.55. e. A bond selling to yield 12.1% for the purchaser of the bond. The borrowing firm faces a tax rate of 34%.
explain the decision-making process used by consumers. as a consumer, how have social, psychological, and enconomic factors influence your buying behavior?
analyze the following investment alternatives for the highest after-tax rate of return under the assumption that the client is subject to a 28% marginal federal income tax and a 5% state income tax. • A corporate bond with a 7% pretax return
Exchange rate relationships between the U.S. dollars the euro have been quite volatile. When the euro began trading at the beginning of 1999.
what is the NPV of this project, assuming that you should evaluate the project on a pre-tax basis?
Identify five qualitative financial and economic assessments specific to Gant and its industry that you shouldconsider in further analyzing Gant's liquidity.
Currently, the beta of a stock fund is 1.2. Suppose the fund manager wants to reduce the beta of this portfolio. Which is an effective way to achieve such goal?
Calculate the firm's current cost of equity. Estimate the firm's cost of equity after it increases its leverage to 75% of equity.
for 2012 everyday electronics reported 22 million of sales and 19 million of operating costs including depreciation.
Briefly describe a project likely to be undertaken by a health care organization of your choice and the best way for that organization to assess the risk associated with the project. Explain your rationale.
Their net income is taxed at a 31% rate. Do a cash flow analysis, show the whole analysis, and recommend whether the new machine should be bought now or in 3 years when the old press must be replaced. Project WACC is 9.5%. Provide NPV, IRR, MIRR &..
dividends are considered regular and dividend is not likely to be repeated.
Computation par value of bonds and What is the bond's annual coupon interest rate
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