Worksheet for Financial management I chapter 4 and 5 1 Global Toys Inc imposes a payback cutoff of three years for its international investment projects If the company has the following two projects a[.]
Worksheet for Financial management I chapter and Global Toys Inc imposes a payback cutoff of three years for its international investment projects If the company has the following two projects available, should it accept either of them? Assume discounting rate is 10% Year Cash Flow (A) Cash Flow (B) −$60,000 −$105,000 23,000 21,000 28,000 26,000 19,000 29,000 9,000 260,000 Required: a) calculate payback period of both A &B project select the b) calculate and select best project c) calculate profitability index of both project d) accounting rate of return Halestorm Corporation’s common stock has a beta of 1.15 If the risk-free rate is 3.6 percent and the expected return on the market is 11 percent, what is the company’s cost of equity capital? Sixth Fourth Bank has an issue of preferred stock with a $4.20 stated dividend that just sold for $93 per share What is the bank’s cost of preferred stock? Bargeron Corporation has a target capital structure of 75 percent common stock, percent preferred stock, and 20 percent debt It’s cost of equity is 10.9 percent, the cost of preferred stock is 5.1 percent, and the pretax cost of debt is 5.8 percent The relevant tax rate is 35 percent a What is the company’s WACC? Jiminy’s Cricket Farm issued a 30-year, 6.3 percent semiannual bond years ago The bond currently sells for 107 percent of its face value The company’s tax rate is 35 percent a What is the pretax cost of debt? b What is the after-tax cost of debt?