Problem 9.07 – Calculating IRR
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Find out if the firm should accept the project with the given required return and cash flows.
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Find out if the firm should accept the project with the given required return and cash flows.
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Given the par value, the dividend of par, and the four different market prices… find the nominal rate of return on a perpetual preferred stock.
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Given information about a bond issued… complete an amortization schedule along with calculating the issue price given different interest rates and issuances.
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Given the required returns, should the firm accept the project?
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Given the annual dividend, the current stock yield, and par value… find the stock’s value and if interest rates pull the yield up, find the new market value.
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Calculate the annual operating cash flow for the introduction of a new product, considering its selling price, expected sales volume, variable costs, depreciation, and fixed costs. Also, consider the effect of the introduction of the new product on the sales volume of the existing model. Determine the OCF for the Music company considering the sale of a new soundboard.
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Given selected financial data for two companies…calculate and compare debt to equity ratio, return on assets ratio, and times interest earned ratio.
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Given the par value, quarterly dividend, and current price… find the nominal annual rate of return, and the effective annual rate of return on the perpetual preferred stock.
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Find the NPV for the projects with the given discount rates and if they should accept or reject. In addition, find the discount rate at which you are indifferent to accepting or rejecting.
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Calculate OCF, NPV, cash flow from assets, and new NPV for a new project, given the fixed asset investment, annual sales, costs, tax rate, required return, initial net working capital investment, and market value of the fixed asset at the end of the project, when different depreciation methods.
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