Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) 10 A firm that is subject to the 40% tax rate has debt of $60M, equity of $140M, and no preferred stock. Determine the firm's cost of capital (WACC) if its pre-tax cost of new debt is 12%, the pre-tax cost of its old debt is 8%, and its cost of equity is 14.5%?

2) You have to select between two investments. First investment needs you to pay 1,989,453 three years from now, but it will earn you cash flow every year from the second year to 6th year; starting with 129,827 on 2nd year and it will rise 5% per year for three years, plus, you'll get back the lump sum of 1,639,837 on sixth year. 2nd investment needs you to pay only 1,873,963 today, and then you will earn 423, 296 beginning 1 year from now and this will continue until the 5th year. Government bond rate stands at 2.3%. You can afford either investment, but can only select one. With NPV concept, which is a better investment for you, and how much is it better?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914392

Have any Question? 


Related Questions in Basic Finance

An article in the economist magazine in 2010 observed the

An article in the Economist magazine in 2010 observed: "The euro's slide implies that the [euro] zone's members will be relying on foreign demand, not their own, to restore their fortunes." a. What does the article mean ...

During a congressional committee hearing at which goldman

During a Congressional Committee hearing at which Goldman Sachs CEO Lloyd Blankfein testified, Senator David Pryor of Arkansas asked Blankfein, "Why would clients believe in Goldman Sachs?" Blankfein replied that Goldman ...

Question 1 - bondsyou have just purchased 5 million par

Q UESTION 1 - B ONDS You have just purchased $5 million par amount of the 5yr and 30yr US Treasury bonds shown below, at the prices shown. (Assume all bonds are semi-annual compounding.)   Par Amt            Coupon       ...

1 what is the main advantage of the typical optimization

1. What is the main advantage of the typical optimization technique in comparison to simulation? 2. At what point in the typical analysis does the technique give way to the managerial review and evaluation process? 3. Co ...

1 when and why would nonprobability sampling methods be

1. When and why would nonprobability sampling methods be used? 2. Under what conditions is sampling bias likely to occur, what are its effects on generalization, and how can it be avoided? 3. Indicate the similarities an ...

A what social and economic conditions support and encourage

(a) What social and economic conditions support and encourage healthy choices? (b) What social and economic structures affect health that have nothing to do with individual choices?

Compare and differentiate between the financial and

Compare and differentiate between the financial and investment DECISIONS MAKING?

1 compare the ethical dilemmas faced by behavioral

1. Compare the ethical dilemmas faced by behavioral scientists with those faced by scientists in other scientific fields. What are the particular ethical problems that arise in behavioral science research? 2. Explain why ...

Explain what we mean when we say that the binomial model is

Explain what we mean when we say that the binomial model is a discrete time model and the Black-Scholes-Merton model is a continuous time model? Explain the difference between a normal and a lognormal distribution as it ...

1 define the term financial intermediary what role do

1. Define the term "financial intermediary." What role do financial intermediaries play in U.S. corporate finance? How does this compare with the role of non-U.S. financial intermediaries? 2. Discuss the U.S. banking sys ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro