I just need the ANSWERS to the Finance questions below. I have to have them by 3 PM CST because this is a timed assignment that I need help on. Thank you.,,1. ,You were recently hired by Scheuer Media Inc. to estimate its cost of capital. You obtained the following data: D1 = $1.75; P0 = $72.50; g = 7.00% (constant); and F = 5.00%. What is the cost of equity raised by selling new common stock?, ,10.21%, ,8.40%, ,11.26%, ,9.54%, ,10.97%,2. ,Ehrmann Data Systems is considering a project that has the following cash flow and WACC data. What is the project’s MIRR? Note that a project’s projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.,WACC:,12.00%,Year,0,1,2,3,Cash flows,-$1,000,$450,$450,$450, ,14.94%, ,16.88%, ,12.70%, ,14.64%, ,13.00%,3. ,Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $950, and the company’s tax rate is 40%. What is the component cost of debt for use in the WACC calculation?, ,4.81%, ,4.49%, ,4.31%, ,5.48%, ,5.30%,4. ,Last month, Lloyd’s Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project, the Federal Reserve took actions that changed interest rates and therefore the firm’s WACC. The Fed’s action did not affect the forecasted cash flows. By how much did the change in the WACC affect the project’s forecasted NPV? Note that a project’s projected NPV can be negative, in which case it should be rejected.,Old WACC:,10.00%,New WACC:,13.50%,Year,0,1,2,3,Cash flows,-$1,000,$410,$410,$410, ,-$64.47, ,-$46.56, ,-$59.70, ,-$61.49, ,-$54.32,5. ,Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $1,150, and the company’s tax rate is 40%. What is the component cost of debt for use in the WACC calculation?, ,4.16%, ,2.58%, ,2.89%, ,3.44%, ,3.71%,6. ,Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project’s discounted payback?,WACC:,10.00%,Year,0,1,2,3,Cash flows,-$650,$500,$500,$500, ,1.75 years, ,1.83 years, ,1.81 years, ,1.47 years, ,1.56 years,7. ,Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $0.90; P0 = $25.00; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?, ,12.26%, ,10.85%, ,13.24%, ,12.37%, ,11.72%,8. ,Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $0.90; P0 = $30.00; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?, ,9.60%, ,7.66%, ,11.33%, ,8.37%, ,10.21%,9. ,You were recently hired by Scheuer Media Inc. to estimate its cost of capital. You obtained the following data: D1 = $1.75; P0 = $42.50; g = 7.00% (constant); and F = 5.00%. What is the cost of equity raised by selling new common stock?, ,10.43%, ,8.50%, ,12.24%, ,11.33%, ,9.97%,10. ,Weaver Chocolate Co. expects to earn $3.50 per share during the current year, its expected dividend payout ratio is 65%, its expected constant dividend growth rate is 6.0%, and its common stock currently sells for $50.00 per share. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of equity from new common stock?, ,10.79%, ,12.73%, ,10.68%, ,9.28%, ,13.38%,11. ,Malholtra Inc. is considering a project that has the following cash flow and WACC data. What is the project’s MIRR? Note that a project’s projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.,WACC:,10.00%,Year,0,1,2,3,4,Cash flows,-$1,325,$300,$320,$340,$360, ,4.31%, ,3.50%, ,2.73%, ,3.78%, ,3.71%,12. ,Tesar Chemicals is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates the NPV. If the decision is made by choosing the project with the higher IRR rather than the one with the higher NPV, how much, if any, value will be forgone, i.e., what’s the chosen NPV versus the maximum possible NPV? Note that (1) "true value" is measured by NPV, and (2) under some conditions the choice of IRR vs. NPV will have no effect on the value gained or lost.,WACC:,7.50%,0,1,2,3,4,CFS,-$1,100,$550,$600,$100,$100,CFL,-$2,700,$650,$725,$800,$1,400, ,$138.10, ,$125.67, ,$121.53, ,$147.77, ,$164.34,13. ,Ehrmann Data Systems is considering a project that has the following cash flow and WACC data. What is the project’s MIRR? Note that a project’s projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.,WACC:,8.75%,Year,0,1,2,3,Cash flows,-$1,000,$450,$450,$450, ,13.74%, ,11.41%, ,14.16%, ,12.23%, ,16.90%,14. ,Tesar Chemicals is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates the NPV. If the decision is made by choosing the project with the higher IRR rather than the one with the higher NPV, how much, if any, value will be forgone, i.e., what’s the chosen NPV versus the maximum possible NPV? Note that (1) "true value" is measured by NPV, and (2) under some conditions the choice of IRR vs. NPV will have no effect on the value gained or lost.,WACC:,8.50%,0,1,2,3,4,CFS,-$1,100,$550,$600,$100,$100,CFL,-$2,700,$650,$725,$800,$1,400, ,$84.43, ,$75.14, ,$79.36, ,$102.16, ,$105.54,15. ,Weaver Chocolate Co. expects to earn $3.50 per share during the current year, its expected dividend payout ratio is 65%, its expected constant dividend growth rate is 6.0%, and its common stock currently sells for $57.50 per share. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of equity from new common stock?, ,9.76%, ,11.08%, ,10.16%, ,9.86%, ,11.96%,16. ,You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 13.25%, and the tax rate is 40%. The firm will not be issuing any new stock. What is Quigley’s WACC?, ,11.20%, ,9.99%, ,9.16%, ,9.25%, ,9.44%,17. ,To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.25% annual coupon, paid semiannually, sells at a price of $850, and has a par value of $1,000. If the firm’s tax rate is 40%, what is the component cost of debt for use in the WACC calculation?, ,7.22%, ,5.95%, ,6.68%, ,5.08%, ,8.22%,18. ,Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $0.90; P0 = $22.50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?, ,10.60%, ,8.80%, ,11.28%, ,11.17%, ,9.93%,19. ,Ingram Electric Products is considering a project that has the following cash flow and WACC data. What is the project’s MIRR? Note that a project’s projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.,WACC:,14.75%,Year,0,1,2,3,Cash flows,-$800,$350,$350,$350, ,12.49%, ,13.23%, ,14.87%, ,11.60%, ,17.54%,20. ,To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.25% annual coupon, paid semiannually, sells at a price of $875, and has a par value of $1,000. If the firm’s tax rate is 40%, what is the component cost of debt for use in the WACC calculation?, ,5.95%, ,5.63%, ,6.47%, ,6.15%, ,5.31%,, ,

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