The common stock and debt of Northern Sludge are valued at $56 million and $23 million, respectively. Investors currently require a15% return on the common stock and an 7% return on the debt.If Northern Sludge Issues an additional $5 million of common stock and uses this money to retire debt, what is the new expectedreturn on the stock? Assume that the change in capital structure does not affect the risk of the debt and that there are no taxes. (Donot round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)Expected stock return%

Here,Value of stock is $56 millionValue of Debt is $23 millionRequired return on stock is…

The common stock and debt of Northern Sludge are valued at $56 million and $23 million, respectively 15% return on the common stock and an 7% return on the debt. If Northern Sludge issues an additional $5 million of common stock and uses this money to retire debt. return on the stock? Assume that the change in capital structure does not affect the risk of the debt and not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected stock return

The common stock and debt of Northern Sludge are valued at $56 million and $23 million, respectively 15% return on the common stock and an 7% return on the debt. If Northern Sludge issues an additional $5 million of common stock and uses this money to retire debt. return on the stock? Assume that the change in capital structure does not affect the risk of the debt and not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected stock return

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Iron Corporation is evaluating an extra dividend versus a share repurchase. In either case, $18,000 would be spent. Current earnings are $2.00 per share, and the stock currently sells for $50 per share. There are 4,000 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What will the company's EPS and PE ratio be under the two different scenarios? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Price per share Shareholder wealth b. EPS PE ratio Extra dividend Repurchase
Anle Corporation has a current price of $13, is expected to pay a dividend of $2 in one year, and its expected price right after paying that dividend is $22. What is Anle's expected dividend yield? (Round to two decimalplaces.) What is Anle's expected capital gain rate? (Round to two decimalplaces.) What is Anle's equity cost of capital? (Round to two decimalplaces.)
Bha
Please provide assistance with the attached questions regarding Finance.
Anle Corporation has a current stock price of $21.99 and is expected to pay a dividend of $1.00 in one year. Its expected stock price right after paying that dividend is $23.92. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? a. What is Anle's equity cost of capital? Anle's equity cost of capital is ☐ %. (Round to two decimal places.)
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Imprudentlal. Inc, has an unfunded penslon lablity of $415 milion that must be pald In 20 years. To assess the value of the firm's stock, financial analysts want to discount this liabllity back to the present. If the relevant discount rate is 5.2 percent, what Is the present value of this liabilty? (Do not round Intermediate calculations and enter your answer in dollars, not milions, rounded to 2 decimal places, e.g., 1,2344.56789) Present value 254,774,000.22
Blue Corp. is evaluating an extra dividend versus a share repurchase. In either case, $5,500 would be spent. Current earnings are $1.11 per share and the stock currently sells for $42 per share. There are 2,500 shares outstanding. Ignore taxes and other imperfections. If Blue Corp. pays a dividend, what will be the dividend per share? After the dividend is paid, how many shares will be outstanding and what will the price per share be? Enter your answers rounded to 2 DECIMAL PLACES. NOTE: Fractional shares are possible (Ex. 0.49 shares) Dividend 2.2 ☑ Correct response: 2.2±0.01 Shares outstanding = 2500 Correct response: 2,500 Stock price = 39.8 Correct response: 39.8±0.01 Click "Verify" to proceed to the next part of the question. After the $2.2 dividend, the price falls to $39.8 per share. What are earnings per share (EPS) and the price earnings (P/E) ratio? Enter your answers rounded to 2 DECIMAL PLACES. EPS = Number P/E RatioNumber Click "Verify" to proceed to the next part of the…
Assume Evco, Inc. has a current stock price of $49. 11 and will pay a $2.25 dividend in one year, its equity cost of capital is 18%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? We can expect Evco stock to sell for $ ( Round to the nearest cent.)
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