Business, 16.07.2019 20:20, T0othless3clipes
Rollins corporation is estimating its wacc. its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,000. the firm could sell, at par, $100 preferred stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. rollins' beta is 1.2, the risk-free rate is 10 percent, and the market risk premium is 5 percent. rollins is a constant-growth firm which just paid a dividend of $2.00, sells for $27.00 per share, and has a growth rate of 8 percent. the firm's policy is to use a risk premium of 4 percentage points when using the bond-yield-plus-risk-premium method to find rs. the firm's marginal tax rate is 40 percent. what is rollins' component cost of debt?
Answers: 1
Business, 21.06.2019 20:30, 7841784
Which of the following mechanisms would be most likely to motivate managers to act in the best interests of shareholders? a) decrease the use of restrictive covenants in bond agreements, b) take actions that reduce the possibility of a hostile takeover, c) elect a board of directors that allows managers greater freedom of action, d) increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries, e) eliminate a requirement that members of the board directors have a substantial investment in the firm's stocks
Answers: 2
Business, 21.06.2019 21:30, annethelusma25
Which of these things did galileo not do? a. stop publishing his scientific work after being convicted of heresy b. invent the concept of acceleration c. experiment with rolling balls down ramps of increasing steepness to test how objects would fall d. argue that earth moves around the sun e. make up a thought experiment that indicated that objects would fall at the same rate
Answers: 3
Business, 21.06.2019 23:30, BrezzyGirl9148
Afinancial institution, the thriftem bank, is in the process of formulating its loan policy for the next quarter. a total of $12 million is allocated for that purpose. being a full-service facility, the bank is obligated to grant loans to different clientele. the following table provides the types of loans, the interest rate charged by the bank, and the possibility of bad debt as estimated from past experience. type of loaninterest rateprobability of bad debtpersonal.140.10car.130.07home.1 20.03farm.125.05commercial.100.02 bad debts are assumed unrecoverable and hence produce no interest revenue either. competition with other financial institutions in the area requires that the bank allocate at least 40% of the total funds to farm and commercial loans. to assist the housing industry in the region, home loans must equal at least 50% of the personal, car, and home loans. the bank also has a stated policy specifying that the overall ratio for bad debts on all loans may not exceed .04. formulate this problem as a linear program. define your variables clearly and write all the constraints explaining the significance of each.
Answers: 1
Rollins corporation is estimating its wacc. its target capital structure is 20 percent debt, 20 perc...
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