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Five Finance problems

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Question;Given the following annual net cash flows determine the internal rate of return to the nearest whole percent of a project with an initial outlay of $750,000.Yr. 1 500,000Yr.2 150,000Yr.3 250,00a) 9% b) 11% C) 13% d) 15%Given the following information on S & G inc.s capital structure, compute the company?s weighted average cost of capital? Company marginal tax rate is 40%?Percent of Capital Before-Tax componentStructure costBonds 40% 7.5%Preferred Stocks 5% 11%Common Stock (Internal Only) 55% 15%a) 13.3% b) 7.1% c) 10.6% d) 10%Kelly Corp. will issue new common stock to finance an expansion. The existing common stock just paid a $1.50 dividend, and dividends are expected to grow at a constant rate 8% indefinitely. The stock sells for $45, and flotation expenses of 5% of the selling price will be incurred on new shares. What is the cost of new common stock be for kelly Corp.?a) 11.33% b) 11.51% c) 11.60% d) 11.79% e) 12.53%A company has preffered stockk that can be sold for $21 per share. The preferred stock pays an annual dividend of 3.5% base on a par value of $100. Flotation costs assoc with sale of preferred stock equal $1.25 per share. The company marginal tax rate is 35%. The cost of pere stock isa) 18.87& b) 17.72% c) 14.26% d) 12.94%Zellars, Inc. Is considering two mutually exclusive projects, A and B. Project A costs $95,000 and is expected to generate $65,000 year one and $75,000 in year two. Project B cost $120,000 and is expected to generate $64,000 in year one, $67,000 year 2, $56,000 year 3 and $45,000 year 4. Zellars, required rate of return for these projects is 10%. The internal rate of return for Project a isa) 31.43% b) 29.42% c) 25.88% d) 19.45%

 

Paper#49364 | Written in 18-Jul-2015

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