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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.

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  • Category:- Basic Finance
  • Reference No.:- M91199

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