Question: I have attached a few multiple selection exercises that I need solution. I really need an accurate solution since I posted them on the Basic

 I have attached a few multiple selection exercises that I need

I have attached a few multiple selection exercises that I need solution. I really need an accurate solution since I posted them on the Basic Questions and tutors gave me the incorrect answers.

solution. I really need an accurate solution since I posted them on

2. The following data pertains to Tany Company: Capital structure (considered optimal) Long term debt (LTD) Preferred1. AA (PS) stock is a pharmaceutical company and plants to Common stock (CS) ???????????? adopt a stock splits by giving 20% 10% 70% 4 3 Tax rate 30% stocks for The current stock price per share is $50 Expected constant growth rate for The company's managers believe the total market value would Earnings 5% ????????????? increase by 10% Dividends 5% Last year dividend This is because of the expected improvement in companies' liquidity that will$3.00 the company's plan follow paid (D0) per share Current selling price Find the stock's expected price immediately after the stock split. of one common $60.00 share 1Less than $35.00 The estimated 2[$35.00,$36.50] treasury bonds 4% yield 3[$39.50, $42.00] The estimated market risk 3% premium (MRP) The estimated 1.2 company's beta The same conditions apply to new security offering: Preferred stock: Share price $100.00 5- MMM Corporation has the following data Dividend per share Outstanding shares of common stock 1000 thousand $7.65 (Dps) Target capital structure Flotation cost per $4.00 share (F) Debt 50% Long term debt Equity 50% (LTD): Projected net income [P(NI)] 5000 thousands Interest rate (rd) 8% The projected investments for next year 6000 thousands 3-Assuming that the company will not issuerespect to dividends. Assume the residual distribution model is used with additional common stock share, find Find dividend per share?(DPS): the component cost a$2 of Debt b$3 9% and 10.9% c$4 2. between 7.7% and 7.99% 4. between 6.% and 7% 5. between 5.5% and 5.8% existing stocks 1. between 4- BB is a manufacturing company and has the following data; Projected capital budget 1. Target capital structure debt equity Estimated net income Assume the company follows a residual dividend policy. Determine how much 6-- Assume k is the cost of debt and t is the marginal tax rate, the after-tax cost of debt, ki, is best represented by the formula: ki = k/t $5,000 60% 40% $2,000 3. ki = tk 4. ki = k - tk 7- The finance manager of NN Co. estimated the following Levered 1.25 beta (BL) Debt to equity ratio 30% (D/E) Tax rate (t) 30% Find unlevered beta, assuming that the company use no debt. Between 0.80 and 0.89 Between 0.90 and 0.99 More than 1.00 8- With corporate income taxes, Modigliani amd Miller (MM) stated that leverage 1 will decrease a firm's . value 2 will increase a firm's . value 3 will not affect a firm's . value 9- The finance manager of NN Co. estimated the following Unlevered beta 0.86 (BUL) Debt to equity 40.00% ratio (D/E) Tax rate (t) 30% Risk free rate 3% Market risk 5% premium By how much would the capital structure shift change the Co's cost of equity? Less than 1% between 1.15% and 1.25% between 2% and 3% 10- The manager of NN Co. estimates the following data for the coming year Assets (A) $200,000 Debt to Assets (D/A) 60% Earnings before interest $20,000 and tax (EBIT) Interest rate (I) 6% Tax rate (t) 30% Find return on equity (ROE) Less than 10% Between 11%, and ?12%. Between 12%, and 14%. 11- Assume the following data for MM Company Capital investments (CI) $ 75,000 Projected net income (PI) $ 55,000 Required equity as a percentage of CI 60% Share outstanding (SO) 10,000 Payout ratio? between 10% and 15% between 15% and 18% more than 18% 12- Variance of returns is a measure of the variability of returns, and it is always 1 smaller than its square root, its standard . deviation. 2 not significant compared to the standard . deviation. 3 variance could be smaller or greater than . standard deviation

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!