Homework #6F (Cost of equity financing)
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Question 3 (1 point) Saved Paul Sharp is CFO of Fast Rocket Inc. He tries to determine the cost of equity financing for his company. The stock has a beta of 2.13. Paul estimated that the market return is 9.94%. The current rate for 10-year Treasury Bonds is 3.44%. Calculate cost of common equity financing using CAPM - SML formula. Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: Answer units Question 4 (1 point) Saved Nature Food Inc. needs to estimate the cost of financing on preferred stock. The firm has preferred stock outstanding that pays a constant dividend of $4.14 per year. That preferred stock is currently selling for $78.50. However, the underwriter would charge flotation costs of $2.63 per share. What is the form’s cost of preferred stock financing? Round the answers to two decimal places in percentage form. (FWite the percentage sign in the "units" box) Your Answer: 5.50 % | Answer units
Question 5 (1 point) Saved The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm's beta is 0.89. The rate on six-month T-bills is 3.47%, and the return on the S&P 500 index is 5.74%. What is the appropriate cost for retained earnings in determining the firm’s cost of capital? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units” box). Your Answer: Answer units Question 6 (1 point) Saved Heavy Rain Corporation just paid a dividend of $2.28 per share, and the firm is expected to experience constant growth of 2.87% over the foreseeable future. The common stock is currently selling for $59.82 per share. What is Heavy Rain's cost of retained earnings using the Gordon Model (DDM) approach? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: Answer units.
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0271 20161 122joint and wong liwymorioso 16 2016
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Question 50 vd mwob 250g abnod to oulay jud asiduob loota to oulev od viqinda
WOT ST6 201611291910 e vibrd, cob vrnonces adt tilt once and T: omienso2
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s do qu90 EDUCO LO SHOolato suisv onT
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0271 20161 122oint and wong liw vitorioss of 10 2016
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Question 50 vd mwob 250g abnod to oulay jud asiduob loota to oulsy od viqinda
WOT ST6 201611291910 e vibrd, col vimonces adt milt once and T: E renso2
You are given the following information for two assets Uno and Dos:
u yo qu909 DOGO TO SLolato sulsv onT
reda
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Expected rate of return Variance of return srüster2 (1)
0.0595
0.0384
0.0153 ort
ano 0.0153
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Uno
W bas Wydb Dos rifesw 0.2315 VISM 1
odtwob stiW
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26
At a market risk premium of 3.5% and a risk-free rate of 2%, determine which asset is considered
riskier by analyzing their systematic and unsystematic risks. mvilu a visM szoqquz
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7-35 Cash Budget
Consider the budgeted income statement for Carlson Company for June 20X4 in Exhibit 7-13.
The cash balance, May 31, 20X4, is $15,000.
Sales proceeds are collected as follows: 80% the month of sale, 10% the second month, and 10%
the third month.
Accounts receivable are $44,000 on May 31, 20X4, consisting of $20,000 from April sales and
$24,000 from May sales.
Accounts payable on May 31, 20X4, are $145,000.
Carlson Company pays 25% of purchases during the month of purchase and the remainder during
the following month.
All operating expenses requiring cash are paid during…
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Use the following table to answer 2) and 3)
State Probj R1 (%) R2
Boom 1/5 15 18
Avg 2/5 6 8
Bad 1/5 -1 -6
Recess 1/5 -6 -8
Find E(R1) and E(R2) .
Find E[(R1 – E(R1) )(R2 - 4)]
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16
1:24 il k M
Brokeroge
O Brokerege
Purchase (+)
Sell (-)
= 250 XOSp = 7125
Purchae cort pthee = 2So+125 = 7 251.25
No d ha
75375
251.25 300 the
O Brokeroge
720 x042 -
Sallig Pice pn thoe =
720 - 288 = 717
No ot Ahey
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Published on Mar 20, 2020
1)Mr. Shah invested Rs. 75,375 to purchase equity
shares of a company at market price of Rs. 250
through a brokerage firm, charging 0.5% brokerage.
The face value of a share is Rs. 10. How many
shares did he purchase ?
2) Mr. Nene received Rs. 4,30,272 after selling
shares of a company at market price of Rs. 720,
through Sharekhan Ltd., with brokerage @ 0.4%. The
face value of the share is Rs. 10. Find the number of
shares he sold.
3)Aniket invested Rs. 61,357.5 in equity shares of
Rs. 100 each at a market price of Rs. 135 per share.
Later he sold these shares at a market price of
Rs. 160 per share. He paid 1% brokerage on each
transaction. Find his net gain and also the percent
gain.
Source : BUSINESS MATHEMATICS - MANAN
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Question 9 of 10
-/1
Cullumber Consulting Company is headquartered in Atlanta and has branch offices in Nashville and Birmingham. Cullumber uses an
activity-based costing system. The Atlanta office has its costs for Administration and Legal allocated to the two branch offices.
Cullumber has provided the following information:
Activity Cost Pool
Cost Driver
Costs
Administration
% of time devoted to branch
$703000
Legal
Hours spent on legal research
$141000
Hours
% of time
spend
devoted to branch
on legal
research
Nashville
000
Birmingham
How much of Atlanta's cost will be allocated to Nashville? (round to nearest dollar)
O $632900
O $670862
O $672962
O $675200
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Notting Hill Company incurred the following costs for R&D activities:
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The following items appear on the balance sheet of a company with a one-year operating cycle. Identify each item as a current
liability, a long-term liability, or not a liability.
Item
Classification
1. Sales taxes payable.
2. Pension liability (to be fully paid to retired employees in next 11 months)
3. Pension liability (to be paid to employees retiring in 2 to 5 years)
rint
4. Machinery (expected life of 4 years)
5. Employee Medical Insurance Payable
rences
6. FICA-Medicare Taxes Payable
7. Interest payable (due in 90 days)
8. Wages payable.
9. Employee Federal Income Taxes Payable
10. Employee Union Dues Payable
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- Assistarrow_forwardSt. ( My The Mic O Ma Mcl O Bus 6 Bad Д АРА М Mic O Ben + Do O MA O Wh 1 Ab Ans + Util A0 A mycourses.sgu.edu/access/content/attachment/172d3b94-c459-4b3b-b9da-2cc57a93c3cb/Assignments/d50e87b8-155e-4aa6-845d-9f9986bcaa31/Chp%2007%2... A I Apps 1 APA citation genera. Grenada SDA Com. Y The Premier Choice. Gmail > YouTube Free, Powerful Engli. O A Planting Calendar. A Maps in Interpretive Simulat. 6 iffer 7-35 Cash Budget Consider the budgeted income statement for Carlson Company for June 20X4 in Exhibit 7-13. The cash balance, May 31, 20X4, is $15,000. Sales proceeds are collected as follows: 80% the month of sale, 10% the second month, and 10% the third month. Accounts receivable are $44,000 on May 31, 20X4, consisting of $20,000 from April sales and $24,000 from May sales. Accounts payable on May 31, 20X4, are $145,000. Carlson Company pays 25% of purchases during the month of purchase and the remainder during the following month. All operating expenses requiring cash are paid during…arrow_forwardUse the following table to answer 2) and 3) State Probj R1 (%) R2 Boom 1/5 15 18 Avg 2/5 6 8 Bad 1/5 -1 -6 Recess 1/5 -6 -8 Find E(R1) and E(R2) . Find E[(R1 – E(R1) )(R2 - 4)]arrow_forward
- 16 1:24 il k M Brokeroge O Brokerege Purchase (+) Sell (-) = 250 XOSp = 7125 Purchae cort pthee = 2So+125 = 7 251.25 No d ha 75375 251.25 300 the O Brokeroge 720 x042 - Sallig Pice pn thoe = 720 - 288 = 717 No ot Ahey 420272 717.12 Published on Mar 20, 2020 1)Mr. Shah invested Rs. 75,375 to purchase equity shares of a company at market price of Rs. 250 through a brokerage firm, charging 0.5% brokerage. The face value of a share is Rs. 10. How many shares did he purchase ? 2) Mr. Nene received Rs. 4,30,272 after selling shares of a company at market price of Rs. 720, through Sharekhan Ltd., with brokerage @ 0.4%. The face value of the share is Rs. 10. Find the number of shares he sold. 3)Aniket invested Rs. 61,357.5 in equity shares of Rs. 100 each at a market price of Rs. 135 per share. Later he sold these shares at a market price of Rs. 160 per share. He paid 1% brokerage on each transaction. Find his net gain and also the percent gain. Source : BUSINESS MATHEMATICS - MANANarrow_forward* 0O T # 3 la Uni X L Grades for Cristian Catala: 22s X WP Ch7quiz with TF5 WP NWP Assessment Player UI Ap X + tion.wiley.com/was/ui/v2/assessment-player/index.html?launchld%3Dafd8fa6a-bc9b-4f11-82e4-3c0d1d4a7063#/question/8 TF5 Question 9 of 10 -/1 Cullumber Consulting Company is headquartered in Atlanta and has branch offices in Nashville and Birmingham. Cullumber uses an activity-based costing system. The Atlanta office has its costs for Administration and Legal allocated to the two branch offices. Cullumber has provided the following information: Activity Cost Pool Cost Driver Costs Administration % of time devoted to branch $703000 Legal Hours spent on legal research $141000 Hours % of time spend devoted to branch on legal research Nashville 000 Birmingham How much of Atlanta's cost will be allocated to Nashville? (round to nearest dollar) O $632900 O $670862 O $672962 O $675200 Save for Later Attemnts: 0 of 1 used MacBook Pro G Search or type URL 000 +, 000 %23 %24 7. 8. 4. 9-…arrow_forwardOSA ess Statistics (15cr) Jan24 Y2 S2 Back Refer to the raw data below. 62 78 The range is: 84 OA 30 OB. 38 O C. 40 OD. 18 Esc Type here to search 62 72 78 54 60 78 80 DOLL F3 F4 PS F6 F8 ! # $ % A & 1 2 3 4₹ 5 € 6 7 8 W E R T Y U ps lock A S D F G H J fn Z X C V B N altarrow_forward
- EBFINB00 Assessment 2 s.google.com/forms/d/e/1FAlpQLSc5SjbreWzCO_yZPB3S2KWa9rUU-y0gkfRTKB8PKub7CTYBJA/formResponse te... AAdaptive Math | Ad.. O New Tab 3. What is the present value of a security that will pay $15,000 in 15 years if securities of equal risk pay 15% annually ? * O a) $1843 b) $4787 c) $4066 d) $4728 e) None of the above 5 po 4. Alpha Co. has 5,000 shares outstanding and its net income was $25,000. What is its earnings per share for the year? a) 2.1 OIN A Chapter S Tme Classwork for BFLarrow_forwardx - (E0E'9) xoqu sf Your sesslon h X sfi Career Opport x Birdledon Writi x O Brussels Alrline X MYAU PortalN X Fall 2021 Ser ezto.mheducation.com/ext/map/index.html?_con%3Dcon&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252F... Dverviews (Chapter 8) i Help Which of the following is not a computer-assisted audit technique? Multiple Choice Test data. Controlled programs. Program analysis techniques. Flowcharts. 9 jo Finacial Accounting... Finacial Account....pdf Finacial Account...pdf Finacial Account...pdf MacBook Air 93arrow_forwardu Online C (78) Wha X M Uh-oh! T X Accounti X M Inbox (2, x O SP2021 Answere x E3 My Hom x * Cengage x Bartleby x + D X A v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?inprogress=true FMovies | Watch M. BIO201 Connect 10.. M Gmail D YouTube Fourth Homework O eBook 9. MC.12.09 Research and Development 10. MC.12.10 Instructions Chart Of Accounts General Journal 11. RE.12.01.BLANKSHEET Instructions 12. RE.12.02 Notting Hill Company incurred the following costs for R&D activities: 13. RE.12.03.BLANKSHEET Material used from inventory $15,000 14. RE.12.04.BLANKSHEET Equipment purchased (with cash) for R&D with no other use 85,000 Depreciation on building housing multiple R&D activities 10,000 15. RE.12.05.BLANKSHEET Wages and salaries paid to R&D employees 38,500 16. RE.12.06.BLANKSHEET Required: 17. RE.12.07.BLANKSHEET Prepare Notting Hill's journal entry(ies) to record its R&D. 18. RE.12.08 19. RE.12.09.BLANKSHEET 20. RE.12.10.BLANKSHEET 21. EX.12.01 22. EX.12.02.BLANKSHEET O…arrow_forward
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