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The aftertax cost of debt is 5 percent, the cost of preferred is 8.7 percent, and cost of common stock is 11 percent. What percentage of the firm's capital funding should be debt financing?
The risk-free rate is 4.1 percent and market rate of return is 12.9 percent. Find out the cost of equity capital (in percents) for Planck's?
Maxwell Electromagnetics just paid its first annual dividend of $.47 share. The firm plans to raise the dividend by 5.2 percent for each year indefinitely. Determine the firm's cost of equity (in p
Boltzmann Energy has beta of 1.1, a variance of 0.0125, a dividend growth rate of 2.6 percent, stock price of $23 a share, and an expected annual dividend of $1.20 for each share next year. The mar
The firm has 8.7 percent, 16-year bonds outstanding with total face value of $401,000. The bonds are currently quoted at 116.5 and pay interest semiannually. Determine the capital structure weight o
The common stock of Schrodinger Feline Supplies has the beta of 1.66 and standard deviation of 25.2 percent. The market rate of return is 12.9 percent and risk-free rate is 5.2 percent. Compute the
Walter Industries has a $7 billion in sales and $2.8 billion in fixed assets. At present, the company's fixed assets are operating at the 95% of capacity.
If the typical firm reports $20 million of retained earnings upon its balance sheet, can the firm definitely pay the $20 million cash dividend?
The firm currently has no other deposit in the bank. Measure the proposed zero-balance account, and make a recommendation to the firm, assuming that it has a 12% opportunity cost.
Compute bad debts in dollars currently and under the proposed change? Compute the cost of managerial bad debt to the firm.
In brief discuss the mortgage securitization and how it contributed to the economic crisis.
Stock A has a beta of 1.56 and has same reward-to-risk ratio as stock B. Stock B has the beta of 0.86 and expected return of 13.57 percent. Determine the expected return (in percents) upon stock A i
Aine would like to make a portfolio that is equally invested in the risk-free asset and two stocks. The one stock has the beta of 1.05. What does the beta of second stock have to be if Aine desires
Which one of the following actions will tend to increase the systematic risk of a portfolio?
Rather than build the new manufacturing facility, the company plans to install equipment in building it owns but isn't now using. The building could be sold for $1.5 million after taxes and real est
Should SOX-like provisions be needed for the federal government? Has there been any move in this direction? Why or why not?
A company announced today that its next annual dividend will be $2.38 for each share. After that dividend is paid, the company expects to face some financial difficulties and is going to suspend di
A company announced today that its next annual dividend will be $2.38 for each share. After that dividend is paid, the company anticipates to face some financial difficulties and is going to suspend
A one year European put option and the one year European call option with strike price of $59 are both priced at $5 in market a one year futures price is currently traded at $58. The risk free rate
A television costs $670 in United States. The same set costs 319 euros. If purchasing power parity holds, determine the spot exchange rate between the euro and the dollar? Round your answer to the n
The common stock of Brutus Properties will pay annual dividend of $2.49 one year from now. The company raises the dividends by 3.9 percent annually. Your required return on this stock is 13.6 percen
Assume that 1 Danish krone could be bought in the foreign exchange market today for $0.18. If the krone appreciated 15% tomorrow against the dollar, how many krones would dollar purchase tomorrow?
Six-month T-bills have the nominal rate of 6%, while default-free Japanese bonds which mature in 6 months have the nominal rate of 2%. In the spot exchange market, 1 yen equals $0.0105. If interest
A currency trader observes that in the spot exchange market, 1 U.S. dollar can be exchanged for the 4.89 Israeli shekels or for 108.76 Japanese yen. Determine the cross-exchange rate between yen and
Coats & More just announced that it will commence paying annual dividends next year. It plans to pay $.75 year for four years, $.90 a year for the following three (3) years, and then cease payin