Unit 7 Assignment 1) What is Pillbriar's WACC? Here is the formula for WACC. WACC = wd*kd(1 - T) + wps * kps + wce * kcs wd = weight of debt, kd = cost of debt, T = tax rate, wps = weight preferred stock. kps = cost preferred stock, wce = weight common stock, kcs = cost common stock. Retained earnings and the sale of new common stock are both used in regard to common equity. 2) What are three methods for estimating common stock cost from retained earnings? Capital-asset-pricing-model
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Present Value and Future Value Tables Table A-1 Future Value Interest Factors for One Dollar Compounded at k Percent for n Periods: FVIF k,n = (1 + k) n Period 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 20% 24% 25% 30% 1 1.0100 1.0200 1.0300 1.0400 1.0500 1.0600 1.0700 1.0800 1.0900 1.1000 1.1100 1.1200 1.1300 1.1400 1.1500 1.1600 1.2000 1.2400 1.2500 1.3000
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A Briefing on the Process of Selecting an Information System By: Anthony S. Gregorio HCS/483 Ins: Howard Gregory What is the most effective process for selecting and acquiring an information system and how to incorporate it into a healthcare organization? “Large software systems are built by using components developed by others (commercial or open source), therefore an increasing need appears to select the right system, the appropriate components in a systematic, factual, objective, and
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• Write a 200- to 300-word description of the four time value of money concepts: present value, present value of an annuity, future value, and future value of annuity. Describe the characteristics of each concept and provide an example of when each would be used. The future value, we measure the value of an amount that is allowed to grow at a given interest rate over a period of time. Assume an investor has $1,000 and wishes to know its worth after four years if it grows at 10 percent per year
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Chapter 3 1. The equation of value using a comparison date at time [pic] is [pic] Thus, [pic] 2. The down payment (D) plus the amount of the loan (L) must equal the total price paid for the automobile. The monthly rate of interest is [pic] and the amount of the loan (L) is the present value of the payments, i.e. [pic] Thus, the down payment needed will be [pic] 3. The monthly interest rate on the first loan (L1) is [pic] and [pic] The monthly interest rate on the second
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Option1: Invest $3,000 on Capitaland’s (Company A) shares for 20 years. Company A – CAPITALAND * Assumption: * No Brokerage fees, Clearing fees, Access fees and GST fees charges * Standard stock purchase is at 1,000 shares/ per lot * Examples shown are purely for academic and presentation purpose Per share price (as on Stock Exchange) as per 21 April 2011 – Capitaland – Closing price at $3.45 Number of shares to purchase: $3,000/$3.45 = 869
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Guillermo Furniture Store Financial Analysis Guillermo needs to implement a new business strategy to remain competitive in business and with foreign manufacturers. Guillermo furniture business is viable because it meets the criteria of a successful business; new competition and diversification of his business after the competition entered the market. This paper will analyze three possible alternatives for Guillermo to remain competitive in business, implement a sensitive analysis to evaluate possible
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expected dividends, discounted by the investor’s expected rate of return. A perpetuity is an annuity that has no end, or in other words, a stream of cash payments that continue for an indefinite period of time as seen in Exhibit 1, Figure 1. The perpetuity relationship is stock price is equal to expected dividends divided by the investor’s required rate of return minus the perpetual dividend growth rate as illustrated in Exhibit 1, Equation 1. The input variables needed to calculate the current
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in the future. Assume that you have a cash inflow of B today and F in a year's time. Unless you have some way of storing or anticipating income, you will be compelled to consume it as it arrives. This could be inconvenient or worse. If the bulk of your cash flow is received next year, the result could be hunger now and gluttony later. This is where the capital market comes in. It allows the transfer of wealth across time, so that you can eat moderately both this year and next. The capital market is
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EC 545: Financial Economics Arindam Bandopadhyaya – Spring 2013 Meeting Notes - Set 5 – Stock Pricing Fundamentals and Assigned Problems from Chapter 8 in Readings Package Stock price as a sum of discounted value of all dividend payments received by the stockholder until infinity Price of a preferred stock that pays constant dividend Price of a stock that pays a dividend that grows at a constant rate The required rate of return of a stock is the sum of dividend yield and capital gains yield;
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