Problem 16.07 – Factoring Receivables
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition and 11th Edition
Given the collection period and discount percent… find the EAR.
Given the collection period and discount percent… find the EAR.
Given common stock, debt, required return on both, and additional common stock… figure out the new return on equity.
Given the beta, price-earnings, expected return, and risk-free yield… calculate a through e, and f through g-2 if the EBIT remains constant.
Calculate the following for Hubbard’s Pet Foods: expected rate of return on equity and expected to return on the package of common stock and bonds.
Given the amount borrowed for the line of credit, interest rate, percent deposited in a noninterest-bearing account, the amount needed today, and months to repay… find the EAR and interest paid.
Debt-equity ratio, interest rate, rate of return on equity, and reduced debt-equity ratio… calculate the WACC and expected rate of return on equity.
Fill in the blanks for rE,rA,βD,βA.
Calculate Establishment Industries’ present value of interest shields if it expects to maintain this debt in the future, repay the debt at the end of 5 years, maintain a constant debt ratio.
Given the discount interest loan information and the compensating balance… find the effective annual interest rate.
Given percent financed, debt yielding, required return, and corporate tax rate… and find the weighted-average cost of capital based on the situation of corporate tax.