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Currently, a three-month Treasury bill has a yield of 5% while the yield on a ten-year Treasury bond is 4.7%. What is the risk premium of the typical A-rated ten-year corporate bond with a yield of
What is the present value of perpetuity of $100 per year if the appropriate discount rate is 7%? If interest rates in general were to double and the appropriate discount rate.
Additional profits after tax will amount to $18,000 per year. Your cost of capital is 8%. Should you go ahead with the expansion? Why or why not?
"Capital budgeting is a big topic in financial management. What is its role in decision making as it relates to returns to investment? Discuss."
The project has a annual cash flow of $7500 for the next 10 years and then $10,000 each year for the following 10 years. The IRR of this 20 year project is 10.98%. If the firms WACC is 9%, what is
Assume that no new investments were made in net fixed assets or net working capital, and no new stock was issued during the year. Calculate the firm's new long-term debt added during the year.
If the firm's required rate of return is 12 percent, what is the modified internal rate of return (MIRR) for the following project?
What is the operating cash flow during 2014? What is the cash flow to creditors during 2014? What is the cash flow to stockholders during 2014?
Big Dom's Pawn Shop charges an interest rate of 14 percent per annum on loans to its customers. What rate should the shop report?
What is the maximum internal growth rate consistent with not requiring external funding for a firm reporting net income of $500,000, a dividend payout ratio of 40%.
Calculate the pre- and post-tax WACC for the firm with $12,000,000 of debt at a pre-tax cost of 10% and $28,000,000 of equity at a cost of 14%. The firm's tax liability rate is 40%.
A company has net income of $180,000, a profit margin of 8.0%, and an accounts receivable balance of $140,000. Assuming 75% of sales are on credit, what are the company's days' sales in receivables
If bankruptcy costs and/or shareholder under diversification are an issue what measure of risk is relevant when evaluating project risk in capital budgeting?
A company has a bond outstanding that sells for $870. The bond has coupon payments of $53 paid annually and matures in 18 years. What is the YTM for this bond?
You buy an eight-year bond that has a 6% current yield and a 6% coupon (paid annually). In one year, promised yields to maturity have risen to 7%. What is your holding period return?
Now the required return on an average stock increases by 30.0% (not percentage points). Neither betas nor the risk-free rate change. What would CCC's new required return be?
Suppose jc penneys has a nonmaturing perpetual preferred stock outstanding that pays 1.56 quarterly dividend and has a required return of 12% APR - 3% quarterly. what is the stock worth?
Company X has 100 shares outstanding. It earns $1,000 per year and announces that it will use all $1,000 to repurchase its shares in the open market instead of paying dividends. Calculate the number
After that, investors believe that the dividend will grow at 20% per year for three years before settling down to a long-run growth rate of 4%. The required rate of return on Groningen stock is 15%.
What is the amount of annual depreciation tax shield for a firm with $200,000 in net income, $75,000 in depreciation expense and a 35% marginal tax rate?
Required return for a preferred stock) James River $3.38 preferred is selling for $45.25. The preferred dividend is nongrowing. What is the required return on James River preferred stock?
WaterCo is a manufacturer of boat parts and has been in business only a few years. Its board of directors decided to start paying a dividend to help boost the attractiveness of its stock.
Issue costs will be 11% of the market value. The company pays 18% in taxes. What will be the firms after tax cost of debt on the bond?
The pervious retained earnings were $ 780 million. How much in dividends was paid to shareholders during the year?
This will entail an increase in inventory of $8000, an increase in accounts payable of $2500, and an increase in property, plant, and equipment of $40,000. All other accounts will remain unchanged.