Question Details Normal
\$ 10.00
Rate of Return for Stocks and Bonds
• Due on 27 Jul, 2018 12:00:00
• Asked On 24 Jul, 2018 02:47:10
• Due date has already passed, but you can still post solutions.
Question posted by

Calculate the following problems and provide an overall summary of how companies make financial decisions in no more than 700 words, based on your answers:

1. Stock Valuation: A stock has an initial price of \$100 per share, paid a dividend of \$2.00 per share during the year, and had an ending share price of \$125. Compute the percentage total return, capital gains yield, and dividend yield.
2. Total Return: You bought a share of 4% preferred stock for \$100 last year. The market price for your stock is now \$120. What was your total return for last year?
3. CAPM: A stock has a beta of 1.20, the expected market rate of return is 12%, and a risk-free rate of 5 percent. What is the expected rate of return of the stock?
4. WACC: The Corporation has a targeted capital structure of 80% common stock and 20% debt. The cost of equity is 12% and the cost of debt is 7%. The tax rate is 30%. What is the company's weighted average cost of capital (WACC)?
5. Flotation Costs: Medina Corp. has a debt-equity ratio of .75. The company is considering a new plant that will cost \$125 million to build. When the company issues new equity, it incurs a flotation cost of 10%. The flotation cost on new debt is 4%. What is the initial cost of the plant if the company raises all equity externally?

Submit your summary and all calcluations.

Available solutions
\$ 10.00
Rate of Return for Stocks and Bonds
• This solution has not purchased yet.
• Submitted On 25 Jul, 2018 02:33:48
Solution posted by
Attached Paper h...
Buy now to view full solution.
\$ 15.00
Rate of Return for Stocks and Bonds
• This Solution has been Purchased 1 time
• Submitted On 26 Jul, 2018 10:55:46
Solution posted by
Calculate the following problems and provide an overall summary of how companies make financial decis...
Buy now to view full solution.
Only 45 characters allowed.

\$ 629.35