Our Services

Get 15% Discount on your First Order

This assignment will allow you to demonstrate the following objectives: Compute the net present value, profitability index, and internal rate of return

April 13, 2024

This assignment will allow you to demonstrate the following objectives:

Compute the net present value, profitability index, and internal rate of return for a given company.
Predict the best choice for a company based on analysis of financial data.
Compute a company’s WACC using given percentages.
Calculate the cost of capital of a stock.
Computer the after-tax cost of capital for bonds.

Instructions: Answer the questions directly on this document. When you are finished, select “Save As,” and save the document using this format: Student ID_UnitVIII. Upload this document to BlackBoard as a .doc, docx, or .rtf file. Show all of your work.

1. The Turnip Company plans to issue preferred stock. Currently, the company’s stock sells for $110. Once new stock is issued, the Turnip Company would receive only $90. The dividend rate is 8%, and the par value of the stock is $100. Compute the cost of capital of the stock to your firm. Show all work.

2. The Maximus Corporation is considering a new investment, which would be financed from debt. Maximus could sell new $1,000 par value bonds at a new price of $920. The bonds would mature in 13 years, and the coupon interest rate is 10%. Compute the after-tax cost of capital to Maximus for bonds, assuming a 34% tax rate. Show work.

3. Connor Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 10%.

Project 1Project 2Initial investment$(465,000)$(700,000)Cash inflow Year 1$510,000$850,000

Compute the following for each project:

NPV (net present value)
PI (profitability index)
IRR (internal rate of return)

Based on your analysis, answer the following questions :

Which is the best choice? Why?
Which project should be selected and why? If the projects had the same IRR amounts but different NPV totals, then how would you know which project to select? Explain.
What would happen if both projects had negative NPV totals? Which project would you choose? What do negative NPVs indicate? Explain.
Should we also use the payback method to assist us in project selection? Why or why not? Explain.

4. The capital structure for Magellan Corporation is shown below. Currently, flotation costs are 13% of market value for a new bond issue and $3 per share for preferred stock. The dividends for common stock were $2.50 last year and have an estimated annual growth rate of 6%. Market prices are $1,020 for bonds, $20 for preferred stock, and $30 for common stock. Assume a 34% tax rate.

Financing Type

% of Future

Financing

Bonds (8%, $1k par, 16 year maturity)36%Common equity45%Preferred stock (5k shares outstanding, $50 par, $1.50 dividend)19%Total %100%

Compute the company’s WACC. Is this WACC considered reasonable given the assumptions and other relevant information? Explain.

management

Share This Post

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Discussion How do the practical and theoretical approaches to Authentic Leadership differ? Are they really describing the same type of leadership? In

Discussion How do the practical and theoretical approaches to Authentic Leadership differ? Are they really describing the same type of leadership? In what ways is servant leadership a paradox? Is servant leadership more of a trait or behavior? How is servant leadership different from authentic leadership? To earn full credit,

The Unit 5 Assignment tasks you with the synthesis of the four functions of management: planning, organizing, leading, and controlling. Utilize the Unit

The Unit 5 Assignment tasks you with the synthesis of the four functions of management: planning, organizing, leading, and controlling. Utilize the Unit 5 template. Describe how the four functions of management relate to each other. Introduce the company chosen in Unit 1 (Coca-Cola was my company). State the mission, vision,

Planning Event and Planning Community Choice For my Emergency Planning Project, I have chosen to focus on a hurricane preparedness plan for the coastal

Planning Event and Planning Community Choice For my Emergency Planning Project, I have chosen to focus on a hurricane preparedness plan for the coastal community of Galveston, Texas. Course Project, Part I You will be using the Course Project Template below throughout the span of this course. The Purpose, Scope,

Why do organizations need to employ project management separate from regular management of the departments in the organization? Isn’t the management of

Why do organizations need to employ project management separate from regular management of the departments in the organization? Isn’t the management of production (manufacturing) of products and services and the business functions that support production enough? As you formulate your thoughts on this topic, you might wish to first think

Why Project Management?Why do organizations need to employ project management separate from regular management of the departments in the organization? I

Why Project Management?Why do organizations need to employ project management separate from regular management of the departments in the organization? Isn’t the management of production (manufacturing) of products and services and the business functions that support production enough? As you formulate your thoughts on this topic, you might wish to

https://www.fema.gov/sites/default/files/2020-04/CPG201Final20180525.pdf Use the THIRA-SPR (CPG) 201 document to assist you with completing this

Use the THIRA-SPR (CPG) 201 document to assist you with completing this discussion. This document is located in the Unit 2 Readings and Resources. How would you apply the three-step THIRA process to your plan? List one key threat or hazard that you identified for your plan. Briefly give it context. List

Discussion Transformational leadership has been defined as the “New Leadership” paradigm in Chapter 8 of your textbook. Explain the concept of

Discussion Transformational leadership has been defined as the “New Leadership” paradigm in Chapter 8 of your textbook. Explain the concept of transformational leadership and how Burns interpreted the concept. Distinguish between transactional, transformational leadership, and charismatic leadership. According to research, how might Millennials resist or respond poorly to the transformational

DISCUSSION AND ASSIGNMENT This week you have been introduced to the Skills, Behavioral, and Situational approaches to Leadership. Define each of these a

DISCUSSION AND ASSIGNMENT This week you have been introduced to the Skills, Behavioral, and Situational approaches to Leadership. Define each of these approaches and their major components such as personal skills or kinds of behaviors. Lastly, define ‘leadership style’ and share an insight you had after completing the two self-assessments

Overview: You will submit your choice of planning event and planning community, which will become the basis for your Emergency Planning

Overview: You will submit your choice of planning event and planning community, which will become the basis for your Emergency Planning Project. Instructions: • You will submit your planning type and topic for approval by the instructor. • Give a brief explanation as to why you chose your planning event

1. Journal Entry: What are your expectations for this course? ( EMH490 – Emergency Planning Project) • What are your concerns about this course? ( EMH490

1. Journal Entry: What are your expectations for this course? ( EMH490 – Emergency Planning Project) • What are your concerns about this course? ( EMH490 – Emergency Planning Project) • In what ways do you think the course project can help you in your future career? Requirements: • 1-2

I need help with my Assignment for DEFM 310 Program and Acquisition Management. Please see attached.

DISCUSSION Using the text and your own research, provide a definition of leadership, and then, explain the following components of leadership: process,

DISCUSSION Using the text and your own research, provide a definition of leadership, and then, explain the following components of leadership: process, influence, group context, and goal attainment. To earn full credit, post an initial response of 500 words that includes at least one APA citation and the associated reference.

Responsible LeadershipAssignment OverviewCommunication Effective communication boosts productivity, fosters teamwork, reduces misunderstandings, drives

Responsible LeadershipAssignment OverviewCommunication Effective communication boosts productivity, fosters teamwork, reduces misunderstandings, drives employee engagement, and improves decision-making to build a successful workplace culture. **Complete SLP 3 before Case 3** Session Long Project 3 Resources 13 Strategies For Breaking Down Silos And Boosting Interdepartmental Communication (2023) How to Improve Cross-Functional Communication (2023) Organizational Silos: Causes,

Responsible LeadershipAssignment OverviewThe Diverse Workplace Cultural Intelligence (CQ) drives understanding across diverse backgrounds and enhances

Responsible LeadershipAssignment OverviewThe Diverse Workplace Cultural Intelligence (CQ) drives understanding across diverse backgrounds and enhances workplace inclusion. Diversity brings varied perspectives, but challenges may arise from misunderstandings and biases. Inclusion, propelled by CQ, ensures diverse talents are harnessed, fostering innovation and collaboration despite inherent workplace challenges. Complete SLP 3 before

The Unit 3 Assignment relates to the steps in the process of delegation, as described in Chapter 7 of the text. For this assignment, again consider the

The Unit 3 Assignment relates to the steps in the process of delegation, as described in Chapter 7 of the text. For this assignment, again consider the company you selected in Unit 1. Your chosen company is experiencing very rapid growth, which has required managers to find more efficient means

Instructions Assignment Instructions: Use the resources and the supporting materials located in this course. See all the resources provided and reference

Instructions Assignment Instructions: Use the resources and the supporting materials located in this course. See all the resources provided and referenced each week. Develop a comprehensive essay comparing the advantages and disadvantages of the cost-based and price-based DoD contracting methods. The final paper should be between 8 to 10 pages

Module 2 – SLPFostering CollaborationAssignment OverviewCross-Functional Teams Collaborative cross-functional teams thrive under leadership styles that

Module 2 – SLPFostering CollaborationAssignment OverviewCross-Functional Teams Collaborative cross-functional teams thrive under leadership styles that prioritize open communication, mutual respect, and shared decision-making. **Complete SLP 2 before Case 2** Session Long Project 2 Resources Servant Leadership (2023)Understanding The Role Of Team Dynamics To Make A Healthy Work Environment (2023)Leadership and teamwork dynamics:

Module 2 – CaseFostering CollaborationAssignment OverviewA Manager’s Role in Collaboration Leadership styles play a role in shaping team dynamics.

Module 2 – CaseFostering CollaborationAssignment OverviewA Manager’s Role in Collaboration Leadership styles play a role in shaping team dynamics. Cross-functional teams, whether virtual or in-person, require a leader adept at understanding varied departmental perspectives, bridging knowledge gaps, and facilitating effective collaboration across specialties. **Complete SLP 2 before Case 2** Case