Assignment+Chapter+12

# Assignment+Chapter+12 - What is its yield to maturity?...

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Student Information First Name Last Name Student ID 123456 Textbook Questions Questions Answers 1 2 Question 10, What is the company's WACC? 3 4 5 6 Additional Questions Questions Answers 7 8 9 10 11 Question 4 - What is your best estimate of the company's cost of equity capital using the geometric growth rate? Question 12, b - What is the company's capital structure weight for bonds on a market value basis? Question 16, b - What rate should the firm use to discount the project's cash flows? Question 18 - Calculate the WACC for Parrothead Enterprises. Question 20 - What is the appropriate discount rate for the project? Treasuries yield 3.10% and the S&P 500 is expected to rise by 9.60%. What is the expected return for the Oracles of Zodiac's stock if its beta is 1.92? The Oracles of Zodiac has 2.20% coupon bonds with 9 years to maturity. They sell at 98.10% of face value.
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Unformatted text preview: What is its yield to maturity? their bond issue. They have 2.72 million shares outstanding with a price of \$50.00 on the exchange. What is the Debt/Equity ratio (in market value) for the Oracles of Zodiac? This question will require information from question 8. The Oracles of Zodiac face a corporate tax rate of 17.60%. What is its WACC? You will need your answers to questions 7, 8, and 9 to answer this question. Dirty Donuts face a corporate tax rate of 59.10%. Their capital structure is 15.90% preferred stock, 51.40% corporate stock, and 32.70% debt. Their investors in preferred stock expect a 6.80% rate of return, their investors in common stock expect a 9.70% rate of return, and their debtholders expect a 4.60% rate of return. What is their WACC?...
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## This note was uploaded on 11/04/2011 for the course FIN 101 taught by Professor Staff during the Fall '11 term at Texas State.

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