QUESTION GD has a target capital structure of 40% debt and the 60% equity. The yield to maturity on the companys outstanding bonds is 9% and the companys tax rate is 40%. GDs CFO has calculated the companys WACC as 9.96%. What is the companys cost of equity capital? 9.96% = 40%*9%*60% 60% times the […]
Date: September 2nd, 2020
QUESTION Equipment basic price 70,000.00additional cost to modify 15,000.00MACRS 3 yr class .33/.45/.15/.07for sale after 3 years 30,000.00use will increase net working capital of 4,000.00save firm per year before tax 25,000.00federal +state tax 40%a. what is the net cost of the spectrometer?b. What are the Given information: Equipment basic price 70,000.00 additional cost to modify […]
Date: September 2nd, 2020
QUESTION Analyzing a Portfolio: You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 18.5 percent. If Stock X has an expected return of 17.2 percent and a beta of 1.4, and Stock Y has an expected return […]
Date: September 2nd, 2020
QUESTION Define Weighted Average Cost of Capital and explain why a company must earn at least its Weighted Average Cost of Capital on new investments. What are the financial implications if it does not? The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all […]
Date: September 2nd, 2020
QUESTION Ajax Corp. is expecting the following cash flows $79,000, $112,000, $164,000, $84,000, and $242,000 over the next 5 years. if the companys opportunity cost is 15%, what is the present value of these cash flows ? (round to the nearest dollar) Amount (in $) Present value is calculated as follows :- Year Cash Flow […]
Date: September 2nd, 2020
QUESTION What is the average value of a loyal customer (VLC) in a target market segment if the average purchase price is $75 per visit, the frequency of repurchase is 6 times per year, the contribution margin is 10 percent, and the average customer defection rate is 25 percent? Due to better operations and s […]
Date: September 2nd, 2020
QUESTION Question 10You borrow $165,000 to buy a house. The mortgage rate is 7.5 percent and the loan period is 30 years. Payments are made monthly. If you pay the mortgage according to the loan agreement, how much total interest will you pay?Answera. $229,079b. $206,408c. $264,319d. $250,332 Monthly payments are $165,000 = Payment(1-1/1.000625^360)/0.00625 Payment =$1,153.70 […]
Date: September 2nd, 2020
QUESTION As production levels increase, Choose onevariable costs per unit decrease.fixed costs per unit increase.fixed costs per unit stay the same and variable costs per unit increase.fixed costs per unit decrease and variable costs per unit stay the same. fixed costs per unit decrease and variable costs per unit stay the same. Because: the total […]
Date: September 2nd, 2020
QUESTION Resnor, Inc., has an issue of preferred stock outstanding that pays a $14.25 dividend every year in perpetuity. If this issue currently sells for $84 per share, the required return is(____) percent. Round your answer to 2 decimal places. According to the given information,Dividend for Preferred stock = $14.25Required rate of return = ?Current […]
Date: September 2nd, 2020
QUESTION Stephanie and Greg were the first and second place winners in a recent contest sponsored by A Lucky Duck. The first place winner is required to represent the company at numerous events for one year in exchange for receiving a prize of $1,000 a year forever. The second place winner is awarded a prize […]
Date: September 2nd, 2020
