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Firm HL has a Debt/Assets ratio of 50% and parts 12% interest on its debt, whereas LL has a 30% debt/assets ratio and pays only 10% interest on debt. Calculate the rate of return on equity for each
Compare the after-tax returns for a corporation that invests in preferred stock with a 12% dividend versus a common stock with no dividend but a 16% capital gain. The corporation's tax rate is 35%.
What should be the intrinsic value of a share of Windsor common stock? If the current market price of Windsor is $120, what is your expected rate of return?
What is the bond's nominal yield to maturity? Round your answer to two decimal places. What is the bond's nominal yield to call? Round your answer to two decimal places.
Explain the advantages and disadvantages of stock-for-stock transactions and cash-for-stock transaction
Do not get involved in legal detail, but examine the options as it pertains to your company. Develop a recommendation for your company and comment on the strategy of your competitors.
Write a one-page report on the current national debt and fiscal deficit situation of our country. How we got here. How do the two parties think we can get out of it and what do you think can be done
Distinguish between unsystematic and systematic risk. Under what circumstances are investors likely to ignore the unsystematic risk characteristics of a security?
Determine two to three (2-3) methods of using stocks and options to create a risk-free hedge portfolio can be created. Support your answer with examples of these methods being used to create a risk-
Assume that dividends are expected to grow at this rate for the foreseeable future. The company's stock is currently selling for $12 per share. New common stock can be sold to net the company $11 pe
What are the main reasons for mergers and acquisitions? Take an example of a merger familiar to you and present your arguments as to its main reasons.
How did GDP growth rates, interest rate levels, interest rate risk premiums and monetary policy impact these waves? What about the impact of interest rate levels, interest rate risk premiums and monet
What was the book value per share of the firm before and after the special dividend was paid?
Explain what factors determine a firm's sustainable growth rate, discuss why it is of interest to management, and compute the sustainable growth rate for a firm with a hypothetical example.
The business risk and the optimal capital structure of a firm, the tutor made the following statement: ??The main factors that affect the business risk are the ability to adjust output prices and op
If all stocks are fairly priced, and you want your portfolio to have a beta equal to the market, what is the expected return of your portfolio?
New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. By how much would the cost of new stock exceed the cost of common from reinvested earnings?
Fully explain the advantages and disadvantages of both approaches. Assume the current economic environment applies to the corporation's decision.
Elaborate on why the net present value (NPV) of a relatively long-term project is more sensitive to changes in the cost of capital than is the NPV of a short-term project.
What is the company's expected growth rate? Round your answer to two decimal places at the end of the calculations.
Richmond clinic has obtained the following estimates for its cost of debt and equity at various capital structure-What is the firm's optimal capital structure?
Increased sales from Auburn University Finance faculty looking for a working copier are expected to be $20,000 per year with operating costs (excluding depreciation) of $5,000 per year. Calculate th
Given the many issues that a firm needs to address while planning for a merger, which ones would be of primary importance in determining the cost of capital? Why?
Discuss four different methods of valuation, with a focus on their advantages and limitations. Do firms use a single method or do they use multiple methods to arrive at a fair valuation?
The net working capital will be recovered when the project ends. The required return is 15 percent. What is the project's equivalent annual cost, or EAC?