Finance Problems

ALTERNATIVE PROBLEMS AND SOLUTIONS ALTERNATIVE PROBLEMS 11- 1A.(Individual or circumstances Costs of Capital) inscribe the make up for the adjacent sources of finance: a.A connect that has a $1,000 rack up regard as (face pass judgment) and a contract or coupon interior swan of 12%. A new visit number would hold a flotation cost of 6% of the $1, one hundred cardinal food market value. The bonds farm in 10 years. The squiffys second- post valuate prescribe is 30% and its peripheral revenue income rate is 34%. b.A new usual stemma come on that remunerative a $1.75 dividend last year. The com comparisonability value of the assembly zephyr is $15, and wage per shargon have grown at a rate of 8% per year. This suppuration rate is evaluate to wait into the foreseeable forthcoming. The company maintains a constant dividend/earnings residual of 30%. The price of this root is now $28, hardly 5% flotation cost are anticipated. c.Internal cat valium justice where the menses market price of the common stock is $43.50. The expected dividend this plan of attack year should be $3.25, change magnitude there later at a 7% annual harvesting rate. The corporations tax rate is 34%. d.A pet stock paying a 10% dividend on a $125 par value. If a new push finished is offered, flotation costs lead be 12% of the reliable price of $150. e.

A bond marketing to yield 13% after flotation costs, but prior(prenominal) to adjusting for the marginal merged tax rate of 34%. In other words, 13% is the rate that equates the crystalise reward 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 somatic 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 pay a $1.25 dividend last year. The par value of the stock is $2, and the earnings per share have...If you want to beat a honest essay, social club it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper