Quiz_27 - E8366 Q niz#214 F a1109 N ame Sfut a-rz otJ A f...

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Sfut a-rz otJ E8366 Qniz#214 Fa1109 Name A film's cost ofequity is based on retained earnings where its current stock pice is $22 per shaxe. The expected end ofyear dividend is $1.35 per share with future dividends expect€d to grcw al an annual rate of8%. I1s before tax cost ofdebt is 11%. Its marginal tax rute is 3802. The firm's capital structure calls for a debt-to-equity ratio of30%. 1(20%) W1}at is the cost of retained eamings k for the hrm? 2(50%) \Vhal is the firm's weighted avemge cost ofcapital? 3(30%) The firm's end ofyear 3 net affer ta.r cash flow A3 has been determined as lbllows: $120,000 11,000 24,000 Debt loterest 8.400 Taxable Income 76,600 Revenues o&M Depreciation Tax Net lDcome Deprecialiol'l Loan Principal 29,108 47,492 (7,s00) . NetCashFlowA3 63,992 What is the present worth ofnet cash flow A.3? 2^= D,+1= Ef +.ot=o.t/t4 az '?agz2- ir1 = 11 ( t -t) * // (/- '?8) - fu= !" io + 2t ,, (e"(4 Cet Ct /-J- \i 1t*'/r./ " b,6z/. /4./+z ==-- t- / cl/ce ); , | -- / oa{ '' +q1r-' _e/ /A,tt\ to .--- a. *, )/*,/? - (i,)n.u, il|rE /.1+ '.*7l2it1 tL'",,a, a<e dts oa-2.) d.*/- Y/ds , .' l2al = i-'- t+.tv/" l. tt.q"tn::L
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Quiz_27 - E8366 Q niz#214 F a1109 N ame Sfut a-rz otJ A f...

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