The effect of tax rate on WACC— K. Bell Jewelers wishes to explore the effect on its cost of capital of the rate at which the company pays taxes. The firm wishes to maintain a capital structure of 35% debt, 20% preferred​ stock, and 45 % common stock. The cost of financing with retained earnings is 15%, the cost of preferred stock financing is 11%, and […]

(Cost of Debt) Sincere Stationary corporation needs to raise %451,000 to improve its manufacturing plant. It has decided to issue $1,000 par value bond with an annual coupon rate of 11.1% with interest paid semiannually and a 15 year maturity. Investors require a rate of return of 9.6%. Compute the market value of the bonds How many bonds will the firm have to issue to […]

Which of the following statements is most correct? Question 6 options: Since stockholders do not generally pay corporate taxes, corporations should focus on before-tax cash flows when calculating the weighted average cost of capital (WACC). When calculating the weighted average cost of capital, firms should include the cost of accounts payable. When calculating the weighted average cost of capital, firms should rely on marginal costs […]

a.consumer and business.b.physical and virtual.c.internal and external.d.personal and a.consumer and business. b.physical and virtual. c.internal and external. d.personal and professional. e.discretionary and disposable. 2…………………………Club Med Inc. talks to its present and potential customers to assess their needs for its products. Then it develops products to satisfy those needs. The firm is thus applying the ____ concept. a.marketing b.facilitating c.physical distribution d.production orientation e.sales orientation 3…………..Marketers […]

A firm has the following book-value balance sheet; Debt =$ 20 ,000, Common Stock ($1 par)= 18 and Retained Earnings = $ 35 ,000. The book value of assets is the total of Debt, Common Stock and Retained Earnings. The firm’s bonds are currently selling at par and the firm’s stock is currently selling for $ 22 . The firm’s tax rate is 32 %. […]

A new trend in investing is to look for companies that are not only profitable, but show a high degree of what is called “corporate sustainability”. Sustainability is a relatively new concept, but one that is increasing in popularity amongst investors and the general public. In response to this, Dow Jones created the Dow Jones Sustainability Indexes (DJSI). Visit www.sustainability-index.com and answer the following questions: a. […]

Fill in the blanks using the terms and phrases listed below: A.securities P.      Investment Company Act of 1940 Q.     crowdfunding R.      safe harbor 1.     The ______________________________ is the main body of federal law governing the creation and sale of securities.  2.     The _______________________________ is the US federal government agency responsible for enforcing securities laws. 3.     The ____________________________deals with the mechanisms and standards for public security trading. 4.     The ____________________________provides a definition of an “investment company.”  5.     The ____________________________focuses on people […]

 From the e-Activity, examine the requirements and qualifications for Native American contracts. Next, compare the Native American contracts to another category of small business’ contracts and the dollar amounts (e.g., HUBZone, 8(a), etc.), as found in the callout box on the left-hand side of the e-Activity’s Web page. http://firstnationscapitalpartners.com/native.html]. Then research and compare things like sole source contracting among various 8(a) program groups.And remember to visit the […]

Long-term investment decision, payback method Personal Finance Problem Bill Williams has the opportunity toinvest in project A that costs $9,600 today and promises to pay $2,300, $2,400, $2,400, $2,100 and $1,900 over thenext 5 years. Or, Bill can invest $9,600 in project B that promises to pay $1,600, $1,600, $1,600, $3,500 and $4,000over the next 5 years. (Hint: For mixed stream cash inflows, calculate cumulative […]

Chapter 11 Organizational Decision Making In the Collins Text “Exploring Business” read: • Chapter 2 Business Ethics and Social Responsibility We will only use Chapter 2, “Business Ethics and Social Responsibility” in the Collins text Part 1 When do groups make better decisions than individuals? Describe a situation in which a group would make a better decision and discuss why they would make a better […]