+1-415-315-9853

info@mywordsolution.com

## Finance

 Basic Finance Corporate Finance Financial Management Financial Econometrics Portfolio Management Risk Management Public Finance Business Law & Ethics

1) Total book value of WTC’s equity is= \$20 million and book value per share outstanding is= \$10. The stock of WTC is presently selling for a price of= \$25 per share and beta of WTC is= .85. The bonds of WTC have face value of \$36 million and sell at price of 96% of face value. Yield to maturity on bonds is 6.5% and firm’s tax rate is 35%. If the E(Rm) = 8% and Rf = 1%, compute the WACC of WTC.

2) Assume the company in 1 is considering given expansion projects. How would you compute the needed rate of return to use in NPV analysis of the following: Describe.

(a) Company is considering the expansion to double production of its present product. Company can issue equity or it can issue debt yielding 7% to pay for expansion.

(b) Company is considering adding the new product in different line of business which is unrelated to their current product.

Basic Finance, Finance

• Category:- Basic Finance
• Reference No.:- M914658

Have any Question?

## Related Questions in Basic Finance

### What is a currency boardis having a fixed exchange rate

What is a currency board? Is having a fixed exchange rate with a currency board that defends the fixed rate better for a country than having a fixed exchange rate and a standard central bank that defends the fixed rate?

### Calculate the pre-tax rate of return in each of these

Calculate the pre-tax rate of return in each of these scenarios. A) Buy 1,000 shares of common stock at \$50 and sell at \$60 one year later. B) Buy 1,000 shares of common stock at \$50 borrowing at 50% of the amount necess ...

### Identify a sample of food companies for example you could

Identify a sample of food companies. For example, you could try Campbell Soup (CPB), General Mills (GIS), Kellogg (K), Kraft Foods (KFT), and Sara Lee (SLE). a. Estimate beta and R2 for each company, using five years of ...

### An important source of temporary cash is trade credit which

An important source of temporary cash is trade credit, which does not actually bring in cash, but instead slows its outflow. Vendors often provide discounts for early payment. What is the formula to determine the effecti ...

### Decline inc is trying to determine its cost of debt the

Decline, Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 15 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has an embedded ...

### A raffle has a grand prize of a european cruise valued at

A raffle has a grand prize of a European cruise valued at \$6500 with a second prize of a Las Vegas getaway valued at \$700. If each ticket costs \$3 and 8600 tickets are sold, what are the expected winnings far a ticket bu ...

### Your company has just sold a piece of property for 500000

Your company has just sold a piece of property for \$500,000, but under the sales agreement, it won't receive the \$500,000 until ten years from today. What is the present value of \$500,000 to be received ten years from to ...

### Dq cash flow and capital budgetingwhat countryies do you

DQ Cash Flow and Capital Budgeting What country(ies) do you think is(are) presently attractive for U.S. corporations seeking foreign direct investment opportunities? Take into account any geopolitical/economic/currency r ...

### Assume toy corp undertakes a plan to move toward its

Assume tOY Corp. undertakes a plan to move toward its optional capital structure by issuing debt and using the proceeds to repurchase equity. The corresponding increase in the company's debt ratio will typically have no ...

### Topic for both group oral presentation and group written

Topic for both group oral presentation and group written report: Qantas Case study Business Analysis and Valuation Using Financial Statements:?? Explore and collect more information on the company and research must be pe ...

• 13,132 Experts

## 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.

### A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

### What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

### Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

### Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

### Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate