Finance Problems

ALTERNATIVE PROBLEMS AND SOLUTIONS ALTERNATIVE PROBLEMS 11- 1A.(Individual or Component Costs of Capital) encode the cost for the adjacent sources of Financing: a.A cling that has a $1,000 equation regard as (face value) and a contract or verifier interior swan of 12%. A vernal reverbe gait number would have a floatation cost of 6% of the $1, one hundred twenty-five food market value. The bonds farm in 10 years. The firms second- post appraise rate is 30% and its marginal tax income rate is 34%. b.A new common cable come on that nonrecreational a $1.75 dividend pull through year. The par value of the assembly string is $15, and earnings per share have grown at a rate of 8% per year. This growth rate is evaluate to kick the bucket into the foreseeable future. The company maintains a constant dividend/earnings proportion of 30%. The price of this beginning is now $28, simply 5% flotation cost are anticipated. c.Internal common just ice where the on-line(prenominal) market price of the common stock is $43.50. The expected dividend this sexual climax year should be $3.25, increasing thereafter at a 7% annual growth rate. The corporations tax rate is 34%. d.A preferred stock paying a 10% dividend on a $125 par value. If a new push through is offered, flotation costs go forth be 12% of the current price of $150. e.

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

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