The Earnings, Dividends, And Stock Price Of Shelby Inc. Are Expected To Grow At
The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 5% per year in the future. Shelby’s common stock sells for $28.00 per share, its last dividend was $2.20, and the company will pay a dividend of $2.31 at the end of the current year. A. Using the discounted cash flow approach, what is its cost of equity? Round your answer to two decimal places. B. If the firm’s beta is 1.2, the risk-free rate is 5%, and the expected return on the market is 13%, then what would be the firm’s cost of equity based on the CAPM approach? Round your answer to two decimal places. C. If the firm’s bonds earn a return of 12%, then what would be your estimate of rs using the over-own-bond-yield-plus-judgmental-risk-premium approach? Round your answer to two decimal places. (Hint: Use the midpoint of the risk premium range.) D. On the basis of the results of parts a through c, what would be your estimate of Shelby’s cost of equity? Assume Shelby values each approach equally. Round your answer to two decimal places.
How Long Will It Take To Pay Off A Loan Of $46,000 At An
How long will it take to pay off a loan of $46,000 at an annual rate of 8% compounded if you make monthly payments of $400? Use five decimal places for the monthly percentage rate in your calculations. The number of years it takes to pay off the loan is ___ years. (round to one decimal place)
An Insurance Agent Called Your Folks And Offered Them An Opportunity To Purchase An
An insurance agent called your folks and offered them an opportunity to purchase an annuity for $8,531.03 that will pay them $1,000 per year for 20 years. What would they be making on there investment of $8,531. What tate of return would they earn? The annual rate of return your folks would earn on their investment is __%. (round to two decimal places)
Why Should More Regulation Be Imposed On Banks Than On Other Types Of Private
Why should more regulation be imposed on banks than on other types of private corporation?
Company Alpha Ltd Has A Market Value Of N$6 Billion And An Issued Share
Company Alpha ltd has a market value of N$6 billion and an issued share capital of 60 million shares. Company Beta ltd, a company in the same industry as Company Alpha, has an issued share capital of 20 million shares and a market value of N$1 billion. Company Alpha wishes to take over company Beta, and believes that the combined company value will be N$8 billion. Company Beta has agreed to a takeover value of N$1, 5 billion. Required: Discuss the effect (s) the takeover of company Beta will have on the existing shareholders of company Alpha, if company Beta is acquired by: a) An issue of new shares to existing shareholders; (7 marks) b) An issue of shares to new shareholders; (5 marks) c) Borrowing ; or (5 marks) d) A share exchange. (8 marks) please help
In December BK Bought A Boat For $100,000. She Paid $16,000 Down
in December BK bought a boat for $100,000. She paid $16,000 down
What Does Securitization Of Assets Mean? What Advantages Does Securitization Offer Lending Institutions?
What does securitization of assets mean? What advantages does securitization offer lending institutions?
In December Beth Bought A Boat For $100,000
In December Beth bought a boat for $100,000
Complete The Questions Below. Submit Only An Excel Spreadsheet With Your Name, One Tab
Complete the questions below. Submit only an Excel spreadsheet with your name, one tab for each question, and your Excel Solver solution; ensure that you clearly identify each answer. A local pastry shop is planning their next morning’s production. The shop has three main items that they sell: cakes, cupcakes, and cannolis. All of these are made in-house with the shop’s own ingredients. The recipes for these items are as follows: Cakes: 5 eggs, 2 cups flower, 15 g of sugar, 1 cup of milk Cupcakes: 2 egg, 0.5 cups of flower, 10 g of sugar, 0.25 cup of milk Cannoli: 4 eggs, no flower, 25 g of sugar, 0.25 cup of milk The pastry shop sells cakes for $8, cupcakes for $3, and cannolis for $6. At the moment, there are 150 eggs, 50 cups of flower, 5 kg of sugar, and 4 gallons of milk available. 1. How much of each item should the pastry shop make in order to maximize their potential profit? What is their maximum potential profit? 2. Suppose the shop had to make at least 5 of each item in order to keep a sufficient variety ready? What would be the new optimal combination? What is their maximum potential profit now? 3. Now suppose that tomorrow they are receiving an order of 100 eggs, 35 cups of flour, 3 kg of sugar, and 2 gallons of milk. What production plan maximizes your potential profit for the next two days? What is this maximum potential profit? Remember that they must still make at least 5 of each item every day.
PLS DO NOT ANSWER 1 OR 2 Questions I Want All The Answers Or
PLS DO NOT ANSWER 1 OR 2 Questions I want all the answers or else I will give dislikes 1, 2. 3. 4 5. 6. 7. 8. 9. 10.
My Teacher Asked The Following Question: What Is The Financial Budget Amount In US
My teacher asked the following question: What is the financial budget amount in US dollars for a project about manufacturing a prototype of a microphone?
State Lottery Payout Provides 1.4 Million To Be Paid In 25 Installments Of 56,000
state lottery payout provides 1.4 million to be paid in 25 installments of 56,000 per payment. the first 56,000 payment is immediate and the remaining 24 payments of 56,000 each will occur at the end of the next 24 years. if 7% is the discount rate, what is the present value of this stream of cash flows? if 14% is the discount rate, what is the present value of the cash flow? a. if 7% is the discount rate, the present value of the annuity due is $__. (round to the nearest cent)
Burnwood Tech Plans To Issue Some $60 Par Preferred Stock With A 8% Dividend.
Burnwood Tech plans to issue some $60 par preferred stock with a 8% dividend. A similar stock is selling on the market for $58. Burnwood must pay flotation costs of 5% of the issue price. What is the cost of the preferred stock? Round your answer to two decimal places.
Summerdahl Resort’s Common Stock Is Currently Trading At $25.00 A Share. The Stock Is
Summerdahl Resort’s common stock is currently trading at $25.00 a share. The stock is expected to pay a dividend of $1.50 a share at the end of the year (D1 = $1.50), and the dividend is expected to grow at a constant rate of 5% a year. What is the cost of common equity? Round your answer to two decimal places.
Shi Import-Export’s Balance Sheet Shows $300 Million In Debt, $50 Million In Preferred Stock,
Shi Import-Export’s balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi’s tax rate is 35%, rd = 6%, rps = 7%, and rs = 10%. If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is its WACC? Round your answer to two decimal places.
The VP Of The Company You Work For Has Asked You To Evaluate The
The VP of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm’s R
Why Did U Find Cost Of Equity And Dividend Growth , Then Find The
why did u find cost of Equity and dividend growth , then find the average?
St. Johns River Shipyards’ Welding Machine Is 15 Years Old, Fully Depreciated, And Has
St. Johns River Shipyards’ welding machine is 15 years old, fully depreciated, and has no salvage value. However, even though it is old, it is still functional as originally designed and can be used for quite a while longer. The new welder will cost $80,000 and have an estimated life of 8 years with no salvage value. The new welder will be much more efficient, however, and this enhanced efficiency will increase earnings before depreciation from $29,000 to $58,000 per year. The new machine will be depreciated over its 5-year MACRS recovery period, so the applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The applicable corporate tax rate is 40%, and the project cost of capital is 10%. Should the old welder be replaced by the new one? What is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest cent.
The G Corporation Is Considering Replacing The Wood Steamer It Currently Uses To Shape
The G Corporation is considering replacing the wood steamer it currently uses to shape guitar sides. The steamer has 6 years of remaining life. If kept, the steamer will have depreciation expenses of $350 for 6 years. Its current book value is $2,100, and it can be sold on an Internet auction site for $4,500 at this time. Thus, the annual depreciation expense is $2,100/6=$350 per year. If the old steamer is not replaced, it can be sold for $800 at the end of its useful life. G is considering purchasing the Side Steamer 3000, a higher-end steamer, which costs $8,000, and has an estimated useful life of 6 years with an estimated salvage value of $900. This steamer falls into the MACRS 5-years class, so the applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The new steamer is faster and allows for an output expansion, so sales would rise by $2,000 per year; the new machine’s much greater efficiency would reduce operating expenses by $1,400 per year. To support the greater sales, the new machine would require that inventories increase by $2,900, but accounts payable would simultaneously increase by $700. Gilbert’s marginal federal-plus-state tax rate is 40%, and the project cost of capital is 12%. Should it replace the old steamer? What is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest dollar.
Suppose The School Company Has This Book Value Balance Sheet: Current Assets $30,000,000 Current
Suppose the School Company has this book value balance sheet: Current assets $30,000,000 Current liabilities $20,000,000 Fixed assets 70,000,000 Notes payable $10,000,000 Long-term debt 30,000,000 Common stock (1 million shares) 1,000,000 Retained earnings 39,000,000 Total assets $100,000,000 Total liabilities and equity $100,000,000 The notes payable are to banks, and the interest rate on this debt is 7%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but instead are part of the company’s permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 9%, and a 25-year maturity. The going rate of interest on new long-term debt, rd, is 12%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $52 per share. Calculate the firm’s market value capital structure. Do not round intermediate calculations. Round your answers to two decimal places.
David Ortiz Motors Has A Target Capital Structure Of 30% Debt And 70% Equity.
David Ortiz Motors has a target capital structure of 30% debt and 70% equity. The yield to maturity on the company’s outstanding bonds is 10%, and the company’s tax rate is 40%. Ortiz’s CFO has calculated the company’s WACC as 11.24%. What is the company’s cost of equity capital? Round your answer to two decimal places.
A Company’s 6% Coupon Rate, Semiannual Payment, $1,000 Par Value Bond That Matures In
A company’s 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $604.23. The company’s federal-plus-state tax rate is 35%. What is the firm’s after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places.
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