Input Area:
13-8:
Rwacc = .726 x 17% + .274 x 10% x .65 = 14.12%
Debt-to-equity ratio
Cost of equity
Cost of debt
Tax rate
45%
17%
10%
35%
Output Area:
WACC
14.12%
13-12:
a.
b.
Input Area:
Debt-to-equity ratio
WACC
Tax rate
Cost of equity
Aftertax cost of
16-4:
Input Area:
Plan I:
Shares outstanding
a.
b.
240,000
Plan II:
Shares outstanding
Debt outstanding
Interest rate
160,000
$3,100,000
10%
EBIT
EBIT
Plan I
Plan II
EBIT
$750,000.00 $750,000.00
Interest
$0.00
$310,000.00
NI
$750,000.00 $440,000.00
EPS
$3
15-8:
Input area:
Call price
One year interest rates
$1,250
11.00%
Face value: $1,000
P= .60 * $1,250 + .40 * $1,000 = $1,150
P= 1,000 + 1,000/0.13 = $8,692.30
Probability of rate in one year
Rate in one year
60%
13%
Probability of rate in one year
Rate i
Michael L. Robinson
Dr. Michael G. McMillan
FIN 620 Midterm Exam
Due: 3/4/2012
Answer sheet
1. Average return = 6.59%; Variance = 3.35%
2. Discount rate = .1564 or 15.64%
3. Asset beta = .48
4. Expected return of companys common stock = 11.4%
5. Corporati
Chapter 17
Problems 1, 2, 3, 6, 10
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-in" be installed in
Chapter 16
Problems 2, 6, 12, 16
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-in" be installed in E
Chapter 15
Problems 6, 9
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-in" be installed in Excel.
To
Chapter 13
Problems 2, 5, 7, 11, 14
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-in" be installed i
Chapter 10
Problems 4, 6, 10, 18 ,19
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-in" be installed
Chapter 20
Question 4
Input Area:
Price
Undervalued IPO
Overvalued IPO
# of shares
1/2 # of shares
$
$
$
40
8
5
1,000
500
Output Area:
If you receive 1000 shares each, the profit
is:
$
3,000
Expected profit
$
(1,000)
This is an example of the winner's cur
Chapter 20
Question 14
Input Area:
Stock price
Shares outstanding
Amount raised
$
$
a. Old shares to new shares
b. Old shares to new shares
27
1,000,000
2,000,000
2
4
Output Area:
a. New shares
Price ex-right
Subscription price
Value of a right
500,000
$