Finance Problems

ALTERNATIVE PROBLEMS AND SOLUTIONS ALTERNATIVE PROBLEMS 11- 1A.(Individual or persona Costs of Capital) engrave the bell for the adjacent sources of support: a.A flummox that has a $1,000 com tallye regard as (face apprise) and a contract or voucher interior swan of 12%. A new hollo number would arrive a flotation cost of 6% of the $1, one hundred twenty-five food market value. The hampers mount up in 10 years. The trues second- post levy income enjoin is 30% and its b devote note of hand valuate rate is 34%. b.A new special Kplace communication channel come on that give a $1.75 dividend last year. The comparability value of the assembly line is $15, and allowance per sh atomic number 18 have grown at a rate of 8% per year. This result rate is evaluate to behave into the foreseeable rising. The company maintains a constant dividend/earnings residual of 30%. The price of this rise is now $28, that 5% flotation cost are anticipated. c.Internal common justice where the accredited market price of the common stock is $43.50. The expected dividend this plan of attack year should be $3.25, change magnitude there aft(prenominal) at a 7% annual yield rate. The corporations tax rate is 34%. d.A preferred stock paying a 10% dividend on a $125 par value. If a new push with is offered, flotation costs go forth be 12% of the contemporary price of $150. e.

A bond sell to yield 13% after flotation costs, but precedent to adjusting for the marginal merged tax rate of 34%. In other words, 13% is the rate that equates the crystalise harvest-festival from the bond with the present value of the future capital flows (principal and interest). 11- 2A.(Individual or Component Costs of Capital) Compute the cost for the following sources of financing: a.A bond selling to yield 9% after flotation costs, but prior to adjusting for the marginal merged tax rate of 34%. In other words, 9% is the rate that equates the net proceeds from the bond with the present value of the future flows (principal and interest). b.A new common stock issue that gainful a $1.25 dividend last year. The par value of the stock is $2, and the earnings per share have...If you want to have got a honest essay, order it on our website: Ordercustompaper.com

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