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Strayer FIN100 week 6 Lab Assignment 5: Chapters 11 and 12




Question;1.;value:5.00 points;Oberon;Inc., has a $10 million (face value) 8-year bond issue selling for 96 percent;of par that pays an annual coupon of 8.00 percent.;What;would be Oberon?s before-tax component cost of debt? (Round your answer to 2 decimal places.);2.;value:5.00 points;Suppose;you sell a fixed asset for $128,000 when its book value is $148,000. If your;company?s marginal tax rate is 35 percent, what will be the effect on cash;flows of this sale (i.e., what will be the after-tax cash flow of this sale)?;ATCF;$;3.;value:5.00 points;Diddy;Corp. stock has a beta of 1.4, the current risk-free rate is 5 percent, and;the expected return on the market is 14.00 percent.;What is;Diddy?s cost of equity?;4.;value:5.00 points;Your;company is considering a new project that will require $912,000 of new;equipment at the start of the project. The equipment will have a depreciable;life of 10 years and will be depreciated to a book value of $142,000 using;straight-line depreciation. The cost of capital is 13 percent, and the firm?s;tax rate is 34 percent.;Estimate;the present value of the tax benefits from depreciation. (Round your answer to 2 decimal places.);Present;value


Paper#48153 | Written in 18-Jul-2015

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