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One year ago, you puchased 74 shares of ABC stock for $21.6 per share. During the year, you received a dividend of $2.6 per share. Today, you sold all your shares for $28.7. What are the percentage
The risk-free rate is 6.7%, the market risk premium is 8.1%, and the stock's beta is 0.45. What is the cost of common stock (Ke)?
If you receive $1,177 at the end of each year for the first three years and $4,724 at the end of each year for the next three years. What is the net present value of this cash flow stream? Assume in
If the market value of debt is $51,962, market value of preferred stock is $43,675, and market value of common equity is 32,491, what is the weight of preferred stock?
You would like to create a portfolio that is equally invested in a risk-free asset and two stocks. One stock has a beta of 1.92. What does the beta of the second stock have to be if you want the por
The ABC Co. has $1,000 face value stock outstanding with a market price of $1,112.9. The stock pays interest annually, matures in 14 years, and has a yield to maturity of 6 percent. What is the annu
Compute the internal rate of return and the modified internal rate of return for each of the following capital budgeting projects. The firms required rate of return is 14%
What is the traditional payback period (PB) of a project that costs $450,000 if it is expected to generate $120,000 per year for five years? If the firms required rate if return is 11 percent, what
what is the net present value (NPV) of the project? What is the internal rate of return? Should the project be purchased?
ABC, Inc. has 4 percent bonds outstanding that mature in 25 years. The bonds pay interest semiannually and have a face value of $1,000. Currently, the bonds are selling for $900 each. What is the fi
which will change the company's beta to 1.7. What effect, if any, will the acquisition have on Wilson's cost of equity capital?
What is the capital structure weight of the firm's common stock? (Hint: Assume each bond has face value of $1,000.)
The pretax cost of debt is 6.7 percent and the cost of common stock is 10.4 percent. What percentage of the firm's capital funding should be debt financing if its tax rate is 30 percent?
What is the net present value of a project with the following cash flows if the required rate of return is 12 percent?
What is the maximum initial investment for which this project is acceptable if the pre-tax required return on debt is 8% and the required return on equity is 18%?
Over the past five years, a stock returned 8.3 percent, -32.5 percent, -2.2 percent, 46.9 percent and 11.8 percent. What is the variance of these returns?
Good values inc., is all-equity-financed. The total market value of the firm currently is $150,000. and there are 5,000 shares outstanding. Good value plans to repurchase $15,000 with of stock. Igno
Sherman's Sherbet currently takes about 10 days to collect and deposit checks from customers. A lock-box system could reduce this time to 6 days. Collections average $35,000 daily. The interest rate
Calculate the standard deviation of expected returns, ?X, for Stock X (?Y = 19.83%.) Round your answer to two decimal places.
ABC Inc.has a bond outstanding which pays 8% coupon compounding semi-annually. The current market price of the bond is $1,196 and the yield to maturity of the bond is 6%. What is the maturity of the
The manager notes that only the $33,000 payment of the 27th has cleared the bank. What is the company's ledger balance and available balance with its bank?
By how much does Bradford's required return exceed Farley's required return? Round your answer to two decimal places.
What was the 2008 operating income and net income? What was operating return on assets and return on equity? Assume that interest must be paid on all of the debt.
A business wants to raise $1.2 million by selling some coupon bonds at par. Comparable bonds in the market have a 6.5 percent annual coupon, 15 years to maturity, and are selling at 97.687 percent o
Determine the net present value of the new machine. Should they purchase the new machine?