Bluesky Inc. is currently evaluating to buy a new factory to ramp up production. Thus, they...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Bluesky Inc. is currently evaluating to buy a new factory to ramp up production. Thus, they need to estimate its cost of capital to properly evaluate this new project. Debt Number of bonds outstanding - Face value= Maturity= Coupons - Yield to Maturity Tax rate= Equity Book Value = Market Price Shares Outstanding = Beta = Risk Free Rate inalgin Expected Return on Market = Latest dividend issued (yesterday)= First dividend per share paid (4 years ago)= a to dos A) 7.2% B) 8.4% C) 9.2% D) *8.8% E) 10.1% 50,000 $1,000 3 years al twellot de sal $90 6% 30% $25 $24 8M pgavles boobsqzs 1.2 4% 8% $1 0.8 tiges ganhow issille son 000,0002 d 151612 14. Based on the CAPM, what is the required return of Bluesky Inc. W 81 shareholders? 000,008.88- 000,028,4- 000.038. 12- 100.000.82- (8 DsdW let 15. 1.13 og Based on the Constant Growth Model, what is the required return of Bluesky Inc. shareholders? 000,0882 A) B) C) D) E) A) B) C) 9.25% 11.23% D) E) 8.56% 8.93% *10.14% 16. What is the price for Bluesky Inc. bonds? $1,415 $845 $976 *$1,080 $1,115 DOO TER poo, PEas Doo Baver (G si 30 1800 intiqa baisiosigubo ad judi dey ogavlen Intnostoni jon el 15W cili JenA .00 128,091,12 SPP,589,18 28186.18 818,6288 (A Bluesky Inc. is currently evaluating to buy a new factory to ramp up production. Thus, they need to estimate its cost of capital to properly evaluate this new project. Debt Number of bonds outstanding - Face value= Maturity= Coupons - Yield to Maturity Tax rate= Equity Book Value = Market Price Shares Outstanding = Beta = Risk Free Rate inalgin Expected Return on Market = Latest dividend issued (yesterday)= First dividend per share paid (4 years ago)= a to dos A) 7.2% B) 8.4% C) 9.2% D) *8.8% E) 10.1% 50,000 $1,000 3 years al twellot de sal $90 6% 30% $25 $24 8M pgavles boobsqzs 1.2 4% 8% $1 0.8 tiges ganhow issille son 000,0002 d 151612 14. Based on the CAPM, what is the required return of Bluesky Inc. W 81 shareholders? 000,008.88- 000,028,4- 000.038. 12- 100.000.82- (8 DsdW let 15. 1.13 og Based on the Constant Growth Model, what is the required return of Bluesky Inc. shareholders? 000,0882 A) B) C) D) E) A) B) C) 9.25% 11.23% D) E) 8.56% 8.93% *10.14% 16. What is the price for Bluesky Inc. bonds? $1,415 $845 $976 *$1,080 $1,115 DOO TER poo, PEas Doo Baver (G si 30 1800 intiqa baisiosigubo ad judi dey ogavlen Intnostoni jon el 15W cili JenA .00 128,091,12 SPP,589,18 28186.18 818,6288 (A
Expert Answer:
Answer rating: 100% (QA)
The detailed answer for the above question is provided below To estimate the cost of capital for Blu... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
1. Ali and Son Company reported the following transaction for Year 1 and Year 2 as follows: Year 1 Year 2 Beginning inventory $80,000 $93,000 Cost of goods purchased 88,000 85,000 Goods available for...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
An investment will pay 24k in 6 years. If the interest rate is 10% with daily compounding what is the value of this contract today. If the quoted rate is 9.75% per year what is the present value of...
-
Legally established titles to the ownership, use, and disposal of factors of production and goods and services that are enforceable in the courts are called : Group of answer choices Market power...
-
Write two paragraphs about Why did American consumption expand so dramatically in the 1950s, and what aspects of society and culture did it influence?
-
Mary Khadir is suing the manufacturer of her car because of a defect that she believes caused her to have an accident, keeping her out of work for a year. She is suing the company for $3.5 million....
-
For a given head loss per unit length, what effect on the flowrate does doubling the pipe diameter have if the flow is (a) laminar, (b) completely turbulent?
-
In an attempt to increase tax revenues, legislators in several states have introduced legislation that would increase state excise taxes. Examine the impact of such an increase on the equilibrium...
-
Direct labor costs Family Model Deluxe Model $72,900 $145,800 Machine hours 2,000 2,000 Setup hours 200 800 Packaging hours 50 75 The estimated overhead of $437,400 is allocated as follows: machining...
-
Jim and Joel have come to you to get an appraisal to lease their property. Using the information below, complete the following questions: Answer the below questions according to the property details...
-
A company manufacures three products: X, Y, and Z. Each product requires wood, plastic and aluminum as shown in the following table: X Y Z 1 unit 1 unit 1 unit Wood Plastic 1 unit 1 unit 2 units...
-
Does your company have opportunities to use incentive compensation techniques? If so, explain your companys approach to incentive compensation. Is there any hard evidence you can cite that indicates...
-
Prepare a trend-adjusted exponential smoothing forecast.
-
The idea for YouCastr was hatched in mid-2006, during a road trip involving Ariel Diaz, Jay Peak, and Jeff Dwyer. Throughout the ride, the friends bounced business ideas off each other. One idea...
-
Freedom Electronics is a start-up with about 20 sales representatives. The company has a solid product line but knows that to remain competitive it must continue recognizing opportunities for new...
-
Compute and use regression and correlation coefficients.
-
Sofia lives in the suburbs of a city and works in the city center. Every day she uses her bike to reach her office and then to return home because she has a valid driving license and there is no...
-
Air pollution generated by a steel mill is an example of a) a positive production externality. b) a negative production externality. c) a public good. d) the free-rider problem. State and local taxes...
-
Refer to the financial report for Canadian Tire Corporation for the fiscal year ended December 31, 2013 in Appendix D. Required: a. Note 3 of the financial statements describes the companys...
-
Sleep King Manufacturing Company (SKMC) is a public manufacturing company specializing in the fabrication of mattresses. The company has been operating from its headquarters in Toronto since 1995....
-
Refer to the facts in problem P9-38. Data from P9-38 Due to concerns with climate change resulting from rising levels of carbon dioxide and other greenhouse gases, many companies and organizations...
-
At 30 June 2024, the accountant for Woodbine Construction, Mary Ellam, is preparing the financial statements for the year ended on that date. To calculate the annual leave payable, the accountant had...
-
How would each of the following liabilities be classified (current, non-current, or both) at the end of the financial year? Unearned revenue Accrued expenses Provision for warranty repair costs...
-
The following were among transactions of Everluck Enterprises Ltd during the financial years ending 30 June 2023 and 30 June 2024. Required Record in general journal form all the above transactions,...
Study smarter with the SolutionInn App