Cost of Debt and Equity- The manager of Sensible Essentials conducted an excellent seminar-Presentation and calculations
Question;Cost of Debt and Equity;The;manager of Sensible Essentials conducted an excellent seminar explaining debt;and equity financing and how firms should analyze their cost of capital.;Nevertheless, the guidelines failed to fully demonstrate the essence of the;cost of debt and equity, which is the required rate of return expected by;suppliers of funds.;You;are the Genesis Energy accountant and have taken a class recently in financing.;You agree to prepare a PowerPoint presentation of approximately 6?8 minutes;using the examples and information below;1;Debt;Jones Industries borrows $600,000 for 10 years with an annual payment of;$100,000. What is the expected interest rate (cost of debt)?;2;Internal;common stock: Jones Industries has a beta of 1.39. The risk-free rate as;measured by the rate on short-term US Treasury bill is 3 percent, and the;expected return on the overall market is 12 percent. Determine the expected;rate of return on Jones?s stock (cost of equity). Here are the details;Jones Total Assets;$2,000,000;Long- & short-term debt;$600,000;Common internal stock equity;$400,000;New common stock equity;$1,000,000;Total liabilities & equity;$2,000,000;Develop;a 10?12-slide presentation in PowerPoint format. Perform your calculations in;an Excel spreadsheet. Cut and paste the calculations into your presentation.;Include speaker?s notes to explain each point in detail. Apply APA standards to;citation of sources.;Assignment;2 Grading Criteria;Calculated;the expected interest rate (cost of debt).;Calculated;the expected rate of return on Jones?s stock (cost of equity).;Wrote;in a clear, concise, and organized manner, demonstrated ethical scholarship;in accurate representation and attribution of sources, displayed accurate;spelling, grammar, and punctuation.
Paper#51962 | Written in 18-Jul-2015Price : $47