capital structure

If the company is in the 35 percent tax bracket, what is the firm’s cost of capital? Given the following capital structure, compute the company’s weighted average cost of capital.

Cost of capital a) The preferred stock of Triple-Play Corporation is currently priced at $21 per share, pays an annual dividend of 3.5% based on a par value of $100. Flotation costs associated with the sale of preferred stock equal $1.25 per share. The company’s marginal tax rate is 35%. Therefore, the cost of preferred […]

Briefly mention the specific steps which you consider necessary to a successful business plan. Describe your most important company strengths and core competencies.

An entrepreneur Start-up Business Plan A business plan is any simple plan, not only limited to the business start-up plan that helps the management to understand the current situation of the enterprises (strengths, weakness, opportunities and threats) and look forward into the future. A start-up plan is a business plan which consists of the mission, […]

What is the optimal capital structure (or Debt/Asset ratio) in the above table? What is the firm value under the optimal capital structure?

Excel: Capital Structure Assume that you have just been hired as business manager of Campus Deli(CD), located adjacent to the campus. Its Free Cash Flow(FCF) is $400,000. Because the university’s enrollment is capped, FCF is expected to be constant over time. Because no expansion capital is required, CD pays out all earnings as dividends. CD […]

Determine the market value of the firm’s debt and equity. Explain the approach and procedure you used and use these values to determine the weights for the WACC.

Firm Financial Analysis Project Segment 3 Parts 5 Macy’s Inc For the third segment of the Firm’s Financial Analysis Project, use the company that you selected in Segment MACY’S 1 to determine the Weighted Average Cost of Capital. Using the principles and tools outlined in the textbook, form an estimate of the WACC for the […]

If the debenture debt is increased to Rs. 7,50,000 and interest of debt is change to 9%. What is the value of the firm and overall capitalization rate?

MODEL QUESTIONS Define capital structure. Differentiate the capital structure and financial structure. What is optimum capital structure? Discuss the various factors affecting the capital structure. Explain the capital structure theories. XYZ Ltd., expects a net income of Rs. 1,50,000. The company has 10% of 5,00,000 Debentures. The equity capitalization rate of the company is 10%. […]

What sources of capital should be included when you estimate Jana’s weighted average cost of capital? Should the component costs be figured on a before-tax or an after-tax basis?

ASSIGNMENT During the last few years, Jana Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to […]

Summarize the top listing and continuation requirements mandated by the NYSE. How do these requirements affect the capital structure of a multinational firm?

Presentation Assignment Hint: Start by visiting http://www.nyse.com/, and look for various listing requirements. Prepare a PowerPoint presentation of 6–8 slides with 250–350 words of speaker notes addressing the following: Summarize the top listing and continuation requirements mandated by the NYSE. How do these requirements affect the capital structure of a multinational firm? What elements make […]

Calculate the NPV for both factories and for both scenarios (rainy versus sunny). What is the range of NPV for each factory based on your scenario analysis?

CAPITAL BUDGETING AND CAPITAL STRUCTURE Required Reading For chapters in Peterson and Fabozzi’s text, you should read through the following material in this textbook found in the Ebook Central database. Peterson, P., & Fabozzi, F. J. (2010). The basics of finance: An introduction to financial markets, business finance, and portfolio management. Hoboken, NJ: John Wiley […]

List four protective covenants that you might be interested in as a prospective bondholder. Briefly describe why these would be realistic bondholder concerns.

QUESTIONS Q-1. List four protective covenants that you might be interested in as a prospective bondholder. Briefly describe why these would be realistic bondholder concerns. How would a convertible bondholder decide whether to exercise his rights of exchange? ( Words- 300 to 400 ) Q-2- How do venture capital firms design successful deals? Why it […]

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