Get college assignment help at uniessay writers “The Up and Coming corporation’s common stock has a beta of 1.3. If the risk-free rate is 6 percent and the expected return on the market is 9 percent, Up and Coming’s cost of equity is_____percent.”
Natural Footware has total fixed costs of $30,000 per month, including $3,000 per month of depreciation expense. It sells natural sole shoes for $29 a pair, and the variable cost of each pair of shoes is $20. What is the pretax operating cash flow break-even point for Natural Footware? 931 pairs of shoes 3.000 pairs of shoes 3,333 pairs of shoes 3,667 pairs of shoes
Secret Energy Supplies has common shares with a price of $15.44 per share. The firm is expected to pay a dividend of $1.25 one year from today, and dividends are expected to grow at 15 percent for two years after that ant then at 2 percent thereafter. What is the implied cost of common equity capital for Secret Energy? 11.00% 12.00% 13.00% 14.00%
Level Co. has a preferred share issue outstanding with a current price of $52.00. The issue paid a dividend of $4.16 yesterday. What is the firm’s cost of preferred equity? 7.00% 7.5% 8.00% 8.50%
problem 7 ONLY!
______ 22. Suppose the real risk-free rate is 2.50% and the future rate of inflation is expected to be constant at 3.80%. What rate of return would you expect on a 5-year Treasury security, assuming the pure expectations theory is valid? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average. a. 6.30% b. 5.80% c. 7.25% d. 5.17% e. 7.18% ____ 23. Suppose the real risk-free rate is 3.00%, the average expected future inflation rate is 2.60%, and a maturity risk premium of 0.10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the years to maturity. What rate of return would you expect on a 1-year Treasury security, assuming the pure expectations theory is NOT valid? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average. a. 4.62% b. 4.96% c. 6.04% d. 5.70% e. 6.67% ____ 24. Suppose the real risk-free rate is 4.20%, the average expected future inflation rate is 6.50%, and a maturity risk premium of 0.10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the years to maturity, hence the pure expectations theory is NOT valid. What rate of return would you expect on a 4-year Treasury security? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average. a. 13.54% b. 11.10% c. 8.77% d. 10.21% e. 10.88% ____ 25. Suppose the yield on a 10-year T-bond is currently 5.05% and that on a 10-year Treasury Inflation Protected Security (TIPS) is 2.85%. Suppose further that the MRP on a 10-year T-bond is 0.90%, that no MRP is required on a TIPS, and that no liquidity premium is required on any T-bond. Given this information, what is the expected rate of inflation over the next 10 years? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average. a. 1.60% b. 1.55% c. 1.30% d. 1.35% e. 1.08% __
What would be the likely effect on the yield to maturity of a bond resulting from: a. an increase in the issuing firm’s times interest-earned ratio? b. an increase in the issuing firm’s debt-equity ratio? c. an increase in the issuing firm’s quick ratio?
A bond with an annual coupon rate of 4.8% sells for $970. What is the bond’s current yield?
You predict that interest rates are about to fall. Which bond will give you the highest capital gain? a. Low coupon, long maturity b. High coupon, short maturity c. High coupon, long maturity d. Zero coupon, long maturity
Scenario: My pal Joe told me that the value of outstanding bonds changes whenever the going rate of interest changes. He expanded on his comments by saying that short-term interest rates are more volatile than long-term interest rates. Therefore short-term bond prices are more sensitive to interest rates than long-term bond prices. Is Joe right? The second part of the question is this: Why is good old Joe right or wrong?
Get college assignment help at uniessay writers how do you construct such a portfolio?
Problem 4-6, Account Analysis, High-Low, Contribution Margin. Information on occupancy and costs at the New Light Hotel for April, May, and June are indicated below: April May June Occupancy 1,500 1,650 1,800 Day Manager Salary $4,200 $4,200 $4,200 Night Manager Salary $3,700 $3,700 $3,700 Cleaning Staff $15,300 $15,600 $15,900 Depreciation $12,000 $12,000 $12,000 Complimentary Continental Food
___Sue now has $490. How much would she have after 8 years if she leaves it invested at 8.5% with annual compunding?
Consider the following information about two stocks x and y: expected return x=.18 y=.12 standard deviation x=.06 y=.02 covariance with market portfolio x=.00108 y=.00036 the correlation between stock x and y is .2 and the risk-free rate of return is 8%. the market risk premium is 7% and the market portfolio has a standard deviation of 3% a. calculate the beta for each stock b. calculate the unsystematic risk for x and y c. would you purchase x and y given the above information? Explain your answer d. assume you decide to buy both stocks. what should be your investments in x and y to get the minimum variance portfolio of these two stocks? e. calculate the beta and abnormal return of the minimum variance portfolio. f. explain why it is irrational to invest in y only g. assume you combine the two stocks in a portfolio with the goal to create an expected return of 15%. what proportion of your money should you invest in each stock? h. calculate the standard deviation of the portfolio from part g. i. calculate the beta of the portfolio from part g. j. consider an investment in a combination of the two stocks that generates the same expected return as the market. is this portfolio efficient? why or why not?
4. A new B737-800 costs about $75 million. FLY is purchasing used B737-800s from Delta Airlines (which is removing them from its fleet as they reach an age when they need to be “refurbished”). Suppose a used 737 can be purchased for $17 million and refurbished for another $13 million, so that FLY can put a “practically new” plane back into service at a total cost of $30 million. Assuming a ten year lease, what would the annual lease payments have to be for FLY to earn its cost of capital? Assume Ireland tax law permits only straight line depreciation over the lease life (with no salvage value) and the lessee does all maintenance and repairs over the 10 years.
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The Up and Coming corporation’s common stock has a beta of 1.3. If the risk-free rate is 6 percent and the expected return on the market is 9 percent, Up and Coming’s cost of equity is_____percent.
Mullineaux Corporation has a target capital structure of 53 percent common stock, 4 percent preferred stock, and 43 percent debt. Its cost of equity is 14 percent, the cost of preferred stock is 7.5 percent, and the cost of debt is 8.5 percent. The relevant tax rate is 33 percent. (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16)) (a) Mullineaux’s WACC is percent.
• Use the data from 2002 in Appendix D to calculate each of the following: o Current ratio o Long-term solvency ratio o Contribution ratio o Programs and expense ratio o General and management and expense ratio o fund-raising and expense ratio o Revenue and expense ratio
1. Juggernaut Satellite Corporation earned $ 10 million for the fiscal year ending yesterday. The firm also paid out 20% of its earnings as dividends yesterday. The firm will continue to pay out 20% of its earnings as annual, end-of year dividends. The remaining 80 percent of earnings is retained by the company for use in projects. The company has 2 million shares of common stock outstanding. The current stock price is $85. The historical return on equity (ROE) of 16 percent is expected to continue in the future. What is the required rate of return on the stock? 2. Northside corporation is expected to pay the following dividends over the next four years: $9, $7, $5, and $2.5. Afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 13 percent, what is the current share price? 3. Assuming that the returns from holding small-company stocks are normally distributed, what is the approximate probability that your money will double in value in a single year? Triple in value?
i am doing a capital budgeting worksheet but i’m struggling on how to get started on the paper.
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