Managerial Finance: Calculating the weighted average cost of capital.

A company's pre-tax cost of debt is 10%. Their preferred stock pays a $10 dividend and sells for $100. Common stock is selling for $50 and the next expected dividend will be $3. The dividend growth rate on common stock is 8%. The company's tax rate is 30% and their capital structure is: Debt: 50% P.S.: 10% C.S.: 40% What is the company's weighted average cost of capital?

Present Value - Apox. Corp

Apox. Corp. expects to receive $2,000 per year for 10 yrs and then $3,500 per year for the next 10 years. What is the present value of this 20-yr cash flow at 11%? Please show the work. (Answer choices are $19,033; $27,870; and $32,389) So which is it?

Managerial Finance: Calculating the expected return and beta of a portfolio after buying a new stock.

You have a portfolio with a total value of $9,000 which has an expected return of 12% with a beta of 1.2. You plan to buy $1,000 of a stock with an expected return of 20% and a beta of 2.0. What will be the expected return and beta of the portfolio after purchasing the new stock? a) 12.0%, 1.2 b) 12.8%, 1.28 c) 13.2%, 1.4 d) 14.0%, 1.32

Calculating the required rate of return.

The assets of a particular investment fund are: Stock A with an Investment of $200,000 and a beta of 1.50. Stock B with an Investment of $300,000 and a beta of -0.50. Stock C with an Investment of $500,000 and a beta of 1.25. Stock D with an Investment of $1,000,000 and a beta of 0.75. The required market rate of return is 15% and the risk-free rate is 7%. What is the required rate of return on the investment fund? a) 14.3% b) 15.0% c) 13.1% d) 12.7% e) 10.3%

Managerial Finance: Calculating how much should be paid for a stock.

Anybody Coal Co. expects tough economic conditions for the foreseeable future. Their current beta is 1.2, the risk-free rate is 10% and the required rate of return on the market is 15%. Anybody paid a dividend of $4 today. Analysts are predicting a steady decline of 6% per year in dividends for the foreseeable future. What is the most you would be willing to pay for this stock? a) $0 b) $42.40 c) $44.94 d) $17.09 e) $25.00