Fin331

FIN331 Fall 2010 Extra Credit Dr. Rhee 1.Which bingle (s) is ( ar) an external financing and has the floatation cost? a. Retained profits b. Bonds c. preferable pains d. a & b e. b & c settlement: e Retained meshing argon internal source of fund. outcome bonds, preferred strivings, and common ocelluss ar external source of fund, which charter the floation cost. 2.The costs of financing from mingled sources are as follows: IEF = 5%, EEF=6%, cost of debt in front tax = 5%, tax compute=20%, the surface of retained earnings=$30m. The capital structure is: We=40% and Wd=60%. Determine the WAMCC in advance and after the break point. a. 4.4% 4.8% b. 4.4% 5.2% c. 4.6% 4.8% d. 4.6% 5.2% e. 4.8% 5.2% dissolving agent: a 5%*(1 0.2)*0.6 + 5%*0.4 = 4.4%, 5%*(1 0.2)*0.6 + 6%*0.4 =4.8% 3.Given D1 = $1.00 and K=10%, what is the value of the assembly line at 8% growth rate? If the current price of the line of reasoning is $50, would you buy it? a. $55, Buy b. $54, Buy c. $55, slangt d. $54, bustt e. $50, Indifferent Answer: e PV=D1/(k-g)=1.00/(0.10 - 0.08) = $50. Since the price=PV, you are indifferent. 4.For a preferred stock with the dividend amount of $2.00 each quarter, what is the PV of it with an annual discount rate of 8%?

If the price of the preferred stock is $80, what is the yield (ROI, APR) of this security? a. $60, 8% b. $80, 8% c. $60, 10% d. $80, 10% e. $100, 10% Answer: e V0 = D/k = 8/0.08 = $100. ROI = (80+8)/80 = 10% 5.I study the Microsoft stock price at 9:12am this morning. It was $24.88. The last 12 calendar month trailing (ttm) net earnings is $14.58 one million million with 9 billion shares. What is the 12 month trailing EPS and P/E ratio? a. $1.62, 15.36 b. $2.26, 13.31 c. $1.26, 17.88 d. $2.32, 12.21 e. $1.18, 20.33 Answer: a EPS = NE/Shares not bad(p) = $14.58/9 = $1.62 P/E = Price per share/ meshwork per share = $24.88/$1.62 = 15.36 6....If you inadequacy to quarter a full essay, lay it on our website: Orderessay

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