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As a result, Marpor's expected free cashflows with debt will be only $15 million per year. SupposeMarpor's tax rate is 35%, and the beta of Marpor's freecash flows is 1.10 (with or without leverage)
If cost of equitey is 14%, what is pretax cost of debt?
The current yield to maturity on similar bonds is 12 percent. Compute the new price of the bond and comment on whether you think it is overpriced in the market place.
Now suppose that with leverage, Kohwe's expectedfree cash flows will decline to $9 million per year due to reducedsales and other financial distress costs. Assume that theappropriate discount rate f
A company bonds have 4 years left to maturity. interestis pain annually and the bonds have a $1000 par value and a couponrate of 9%.
It's operating costs are $7,000 the first year and increases by 5% for each of the following years. If the MARR = 12%, what was the annual equivalent cost of the machine?
A company's perpetual preferred stockcurrently trades at $80 per share and pays a $6.00 annual dividendper share. If the company were to sell a new preferred issue,it would incur a flotation cost of
Chris and Karen have a combined take-home income of$5,000. Their total monthly payments on consumer debt are$875. What is their debt safety ratio?
Lindsay has a job with monthly take-home pay of$3,500. Using the suggested maximum debt safety ratio, what maximum debt burden per month can she assume?
Mimi and Jason have a home valued at $96,000 and an outstandingmortgage of $60,000. If their lender is willing to provide ahome equity loan of up to 75% of market value, how much could they borrow u
If you deposit $45,000 in a savings account that pays 10% interest compounded monthly, for 5 years. What is the future value at the end of five years.
Explain the rational and value of an audit of a publicly-heldcompany to investors, creditors, and to the broader community as awhole.
What willearnings per share be? What would it be higher or lower than theearnings per share computed for the most aggressive plan computedin part d?
Determine the total two-year interest cost undereach plan. Which plan is less costly?
Assume that p[rogramming and maintanance cost turn out tobe much higher that Lillians estimates. How ever despite the factthe automation equipment increased costs, Lillian still wants tocontinue wit
The company will sell 10 million sharesat an offering price of $25 per share, the underwriting will charge7% underwriting fee, & the shares are expected to sell for $32per share by the end of th
Assume that each of these projects is just as risky as the firm's existing assets and that the firm may accept all the projects or only some of them. Which set of projects should be accepted? Explai
The Heuser Company's currently outstanding bonds have a 10% coupon and a 12% yield to maturity. He user believes it could issue new bonds at par that would provide a similar yield to maturity. If it
If you buy a factory for $250,000 and terms are 20 percent down,the balance to be paid off over 30 years at a 12% rate of intereston the unpaid balance. What are the 30 equal annual payments?
What is the size of the settlement? Would you want higher or lower interest rate?
Determine the value of a share of dupont series a $4.50 cumulative preferred stock, no par, to an investor who requires a 9 percent rate of return on this security.
If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years?
The firm's policy is to use a risk premium of 4percentage points when using the bond-yield-plus-risk-premiummethod to find ks. Flotation costs on new common stock totals 10percent, and the firm's ma
Kinston has 200,000 shares of common stock and 50,000 warrants outstanding. Each warrant entitles its owner to buy one share at a price of $20 before 2020. The firm's basic earnings per share is $2.
A debt of $8800 is to be amortized with 8 equal semiannual payments of $1389.20. If the annual interest rate is 11% compounded semiannually, find the unpaid balance immediately after the 5th paymen