Problem 14.23 – Calculating the Cost of Equity
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Find the cost of equity with the DCF and SML method.
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Find the cost of equity with the DCF and SML method.
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What is the NPV of the manufacturing facility used to produce photographic equipment? You are given a debt-equity ratio, the cost of the new plant, the after-tax cash flows, and three financing options.
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Defense Electronics, Inc. needs to evaluate a manufacturing plant to produce a new line of RDSs. Given market data on DEI’s securities including its Debt, Common Stock, Preferred stock, and the Market, along with the underwriter’s fees (spreads), determine the initial cash flow, the discount rate adjusted for increased riskiness, the aftertax salvage value of the plant when sold, the annual operating cash flow, the accounting break-even quantity of RDSs and finally, the project’s NPV and IRR.
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Given the boxes of light bulbs ordered per year, the cost of a box, the order cost and the carry cost on an annual basis, determine the annual cost of ordering and carrying the boxes.
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Given the weeks that the firm is operating, the demand for its products, the days in which they manufacture products, and the lead time, determine the quantity that they should order more products.
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Given the monthly demand for bottles of shampoo, determine the economic order quantity.
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Given the monthly demand for staples, the rate at which they can be produced per day, the operating days in a month, and the setup cost for a run and holding cost, determine the economic production quantity, EPQ.
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Determine the YETI Coolers Inventory Turns, as well as the weeks of supply.
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