Answers to Tutorial Questions Cost of Capital
Stock in Parrot Industries has a beta of 1.12. The market risk premium is 7.5% and T-bills are
currently yielding 4%. The companys most recent dividend was $1.50 per share, and
dividends are expecte
Answers for Tutorial Questions Capital Investment
Relates to the mid semester exam
Use the following information to estimate the taxable income for Year 2.
Answers for Tutorial Questions Project Analysis
Relates to the final exam
In each of the following cases, calculate the accounting break-even and the cash
break-even points. Ignore tax effects in calculating cash break-even.
Answers for Tutorial Questions - NPV
The Robb Computer Corporation is trying to choose between the following two
mutually exclusive design projects:
CF Project I
CF Project II
a) If the
Answers for Tutorial Questions - Intro
What are the three main issues that corporate finance deals with?
Corporate finance deals with three major issues:
- What long term investments should the firm take on?
In particular decide what business t
Answers to Tutorial Questions Market History
Suppose a stock had an initial price of $64 per share, paid a dividend of $1.75 per
share during the year, and had an ending share price of $72. Compute the percentage
total return. What was the divi
Answers for Tutorial Questions - Valuation
Superstar Enterprises has bonds on the market making annual payments, with 16
years to maturity, and selling for $87. At this price, the bonds yield 6.8%. What must
the coupon rate be on Superstar bond