Answer:
Cost of equity capital can be found by the Capital asset pricing model:
Cost of capital
= Risk free rate + beta * market premium
= 2% + 0.8 * 10%
= 10%
Weighted Average Cost of Capital:
= (weight of debt * after tax cost of debt) + (weight of stock * cost of stock)
= (50% * 8% * ( 1 - 34%)) + (50% * 10%)
= 10.28%
Answer:
1. $5.3
2. 17.95
Explanation:
1. Earning per share today = $5.1
Earning growth in one year = 4%
So, the EPS one-year ahead:
= Earning per share today × (1 + Earning growth in one year)
= 5.1 × 1.04
= $5.3
2
. Market price one-year ahead:
= Current price × (1 + expected return on Parador stock)
= 78 × 1.22
= $95.16.
P/E Ratio = Market price per share ÷ Earning per share
P/E Ratio = 95.16 ÷ 5.3
= 17.95
Answer:
Option A
Total interest = 9.5% x $1,000 x 3 years = $285
Option B
total interest = 7.25% x $1,000 x 4 years = $290
Option C
Total interest = 5.5% x $1,000 x 8 years = $440
Option D
Total interest = 6% x $1,000 x 6 years = $360
Option c will cost the company the most in total interest over the life of the bond
Explanation:
In this case. the total interest over the life of the bonds is calculated. The total interest is a function of interest rate, par value of the bonds and number of years to maturity. A par value of $1,000 is assumed in this respect.
Based on the First In; First Out method of inventory management, the ending inventory is <u>$180.</u>
FIFO means that the earlier stock is sold off first. This means that the sale on April 14 was based on the beginning inventory first and then the Purchase on the 11.
Stock on April 14:
<em>= Beginning stock + Purchases - Sale</em>
= 24 + 26 - 36
= 14 units at $12 each
Stock at 25th:
<em>= Remaining April 11 purchases + April 21 Purchases - Sales</em>
= 14 + 18 - 20
= 12 units at $15
Ending inventory:
= 7 x 12
= $180
In conclusion, closing inventory is $180.
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Answer:
Explanation:
Present value is found by discounting future values using a discount/interest rate.
Current year PV of $5000 is $5000.
A year in future PV is $5000/(1+r)^n which is $5000/(1.06)^1
= $4,716.98 is what $5000 in a year from now is worth.
Two years in future is $5000/(1+r)^r which will now be $5000/(1.06)^2
= $4,449.98 is what $5000 two years from now is worth today.
Add all figures up to get your Present value.
=5000 + 4,716.98 + 4,449.98
= $14,166.96 is the present value.
