Beale manufacturing company has a beta of 1.1, and foley industries has a beta of 0.30. the required return on an index fund that holds the entire stock market is 11%. the risk-free rate of interest is 4.5%. by how much does beale’s required return exceed foley’s required return? holmes company’s currently outstanding bonds have an 8% coupon and a 10% yield to maturity. holmes believes it could issue new bonds at par that would provide a similar yield to maturity. if its marginal tax rate is 40%, what is holmes’ after-tax cost of debt?

Amachine purchased three years ago for $720,000 has a current book value using straight-line depreciation of $400,000: its operating expenses are $60,000 per year. a replacement machine would cost $480,000, have a useful life of nine years, and would require $26,000 per year in operating expenses. it has an expected salvage value of $130,000 after nine years. the current disposal value of the old machine is $170,000: if it is kept 9 more years, its residual value would be $20,000. calculate the total costs in keeping the old machine and purchase a new machine. should the old machine be replaced?

Chuck, a single taxpayer, earns $80,750 in taxable income and $30,750 in interest from an investment in city of heflin bonds. (use the u. s. tax rate schedule.) (do not round intermediate calculations. round your answers to 2 decimal places.)

If airlines do not change their prices how else might they try to compete with each other?