You are the Genesis accountant and have taken a class recently in the financing. You agree to make a PowerPoint presentation of approximately 6 to 8 minutes by using the exs and information given below:
1. Debt: Jones Industries borrows $600,000 for 10 years with a yearly payment of $100,000. What is expected interest rate (cost of debt)?
2. Internal common stock: Jones Industries has a beta of 1.39. The risk free rate as measured by rate on short-term US Treasury bill is 3 percent, and the anticipated return on the whole market is 12 percent. Determine the expected rate of return on Jones’s stock (cost of equity). Here are the details:
Jones Total Assets $2,000,000
Long- & short-term debt $600,000
Common internal stock equity $400,000
New common stock equity $1,000,000
Total liabilities & equity $2,000,000
Build up a 10–12-slide presentation in PowerPoint format. Perform your computation in an Excel spreadsheet. Cut and paste the computation in your presentation. comprise speaker’s notes to elucidate each point in detail.