P 13.17 – Capital Structure
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
With the given information on Binomial Tree Farms, find out the WACC.
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With the given information on Binomial Tree Farms, find out the WACC.
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Calculate the percentage total return for a stock with given initial and ending share prices and dividend per share. Then, determine the dividend yield and capital gains yield for the stock.
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Given the coupon rate, yield to maturity, and tax rate… find the after-tax cost of debt.
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Given the preferred stock price and annual dividend… find the company’s cost of preferred stock, rp?
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Determine the dollar return on a stock investment, given the number of shares purchased, initial stock price, dividend per share, and stock price at the end of the year.
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Given the target capital structure of debt and common equity, yield to maturity, tax rate, and WACC… find the cost of common equity.
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Given common stock, expected dividend paid, and constant growth rate… find the cost of equity from retained earnings and its cost of equity from issuing new common stock.
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Determine the total dollar return, total nominal rate of return, and total real rate of return on a bond investment, given the annual coupon rate, purchase price, current selling price, face value, and inflation rate.
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Determine the arithmetic average annual return on large-company stocks in both nominal and real terms, given the relevant historical data. What was the arithmetic average return in nominal terms and in real terms?
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Given the estimated WACC, and the project’s size and rate of return… find which set of projects should be accepted.
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