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Finance Miscs. Questions




Question;A firm;wants to create a weighted average cost of capital (WACC) of 10.4 percent. The;firm's cost of equity is 14.5 percent and its pre-tax cost of debt is 8.5;percent. The tax rate is 34 percent. What does the debt-equity ratio need to be;for the firm to achieve its target WACC?;Judy's;Boutique just paid an annual dividend of $1.65 on its common stock. The firm;increases its dividend by 2.5 percent annually. What is the rate of return on;this stock if the current stock price is $38.20 a share?;Major;Manufacturing issued 30-year, 8.5 percent semi-annual bonds 6 years ago. The;bonds currently sell at 101 percent of face value. What is the firm's after-tax;cost of debt if the tax rate is 35 percent?;Western;Electric has 23,000 shares of common stock outstanding at a price per share of;$57 and a rate of return of 14.2 percent. The firm has 6,000 shares of 7;percent preferred stock outstanding at a price of $48 a share. The preferred;stock has a par value of $100. The outstanding debt has a total face value of;$350,000 and currently sells for 102 percent of face. The yield-to-maturity on;the debt is 8.49 percent. What is the firm's weighted average cost of capital;if the tax rate is 34 percent?;Which of;the following terms can be used to describe unsystematic risk?;I. asset-specific risk;II. diversifiable risk;III. market risk;IV. unique risk;Winter;Wear, Inc. has 6 percent bonds outstanding that mature in 13 years. The bonds;pay interest semi annually and have a face value of $1,000. Currently, the;bonds are selling for $993 each. What is the firm's pre-tax cost of debt?;The primary;goal of corporate finance is to?;Martin;Martin, Inc. stock is currently selling for $19 per share. The firm just;made an offer to one of its major shareholders to repurchase all the shares;owned by that shareholder for $25 per share. What type of offer is being made?;The;ex-dividend date is defined as _____ day(s) before the date of record.;The;weighted average cost of capital is defined as the weighted average of a;firm's;Venture;capital is most apt to be the source of funding for?;What is the;advertisement, commonly found in financial newspapers, that announces a public;offering of securities and provides the name of the underwriters called?;What is the;legal document called that is provided to potential investors and describes a;new security offering?;When is a;firm insolvent from an accounting perspective?;Which one;of the following best describes an initial public offering?;Which one;is minimized when the value of a firm is maximized?;Which is;the best example of unsystematic risk?;Which one;of the following statements concerning financial leverage is correct?


Paper#48096 | Written in 18-Jul-2015

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