CFIN (with MindTap Finance, 1 term (6 months) Printed Access Card) (MindTap Course List)
6th Edition
ISBN: 9781337407342
Author: Scott Besley, Eugene Brigham
Publisher: Cengage Learning
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Chapter 11, Problem 10PROB
Summary Introduction
Cost of new common stock is the cost incurred by the company for issue new common stock.
Calculate the cost new common stock as follows:
Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee.
HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.
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Consider the following gasoline sales time series. If needed, round your answers to two decimal digits.
Week
Sales (1,000s of gallons)
1
17
2
21
3
19
4
23
5
18
6
16
7
20
8
18
9
22
10
20
11
15
12
22
(a)
Show the exponential smoothing forecasts using α = 0.1, and α = 0.2.
ExponentialSmoothing
Week
α = 0.1
α = 0.2
13
(b)
Applying the MSE measure of forecast accuracy, would you prefer a smoothing constant of α = 0.1 or α = 0.2 for the gasoline sales time series?
An smoothing constant provides a more accurate forecast, with an overall MSE of .
(c)
Are the results the same if you apply MAE as the measure of accuracy?
An smoothing constant provides a more accurate forecast, with an overall MAE of .
(d)
What are the results if MAPE is used?
An smoothing constant provides a more accurate forecast, with an overall MAPE of .
After many sunset viewings at SUNY Brockport, Amanda dreams of owning a waterfront home on Lake Ontario. She finds her perfect house listed at $425,000. Leveraging the negotiation skills she developed at school, she persuades the seller to drop the price to $405,000. What would be her annual payment if she opts for a 30-year mortgage from Five Star Bank with an interest rate of 14.95% and no down payment?
a- $25,938
b- $26,196
c- $24,500
d- $27,000
Chapter 11 Solutions
CFIN (with MindTap Finance, 1 term (6 months) Printed Access Card) (MindTap Course List)
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