ABC Co. and XYZ Co. are identical firms in all respects except for their capital structure. ABC is all equity financed with $800,000 in stock. XYZ uses both stock and perpetual debt; its stock is worth $400,000 and the interest rate on its debt is 5.2 percent. Both firms expect EBIT to be $79,000. Ignore taxes.
a. Rico owns $60,000 worth of XYZ’s stock. What rate of return is he expecting?
b. Suppose Rico invests in ABC Co. and uses homemade leverage. Calculate his total cash flow and rate of return.
c. What is the cost of equity for ABC and XYZ?
d. What is the WACC for ABC and XYZ?
In: Finance
Q1) Tawes & Co. has 100,000 semiannual coupon bonds outstanding, each with a par value of $1,000, coupon rate of 8%, and maturity of 15 years. Each bond sells at 110% of par. Tawes & Co. also has 1,000,000 shares of common stock outstanding that sell for $140 per share and have a beta of 1.7. The risk-free rate is 3%, market risk premium is 7%, and the corporate tax rate is 30%. What is Tawes & Co.'s weighted average cost of capital (WACC)?
answer by hand so I can see the steps.
A) 7.78%
B) 11.04%
C) 9.94%
D) 11.86%
E) 10.47%
In: Finance
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Co-occurring Treatment and Recovery Chart |
The purpose of this assignment is to become familiar with the treatment and recovery methods, modalities, and strategies.
After reading all assigned material complete the “Co-occurring Treatment and Recovery Chart” by filling in the information for the following categories below.
In: Nursing
On January 1, 2018 CCSU Co. issue two bonds and an installment plan to Jon's Co. to finance its construction:
1. A five-year zero coupon bond with par value at $1,000,000 with annual effective interest rate at 6%.
2. A three-year bond with par value of $500,000 with interest paid every 6 months (June 30 and December 31), the annual coupon rate is 4% and effective interest rate is 3%.
3. A 3-year installment plan with annual payment of $50,000 staring from December 31, 2018 with annual 2. . effective rate of 5%.
Required:
1. What is the total cash CCSU Co. received at January 1, 2018?
2. What is the interest expense incurred for the year of 2018 and 2019?
3. Ass uming there is no pre-payment penalty, CCSU Co. wants to pay off the zero coupon bond at December 31, 2020, how much CCSU should pay?
In: Accounting
Consider the reaction: Li2S(aq) + Co(NO3)2 (aq) à 2 LiNO3 (aq) + CoS (s)
What is the mole-mole factor (written as a conversion factor)
for each reactant to product CoS (s)?
Calculate the molar mass of each substance in the above chemical
reaction.
If 4.2 g of Li2S are placed in a flask with excess
Co(NO3)2, how many grams of CoS are expected?
(This is theoretical yield)
The reagents in this reaction are aqueous solutions. If 20 mL of
0.25 M Co(NO3)2
are mixed with excess Li2S solution, how many grams of
CoS will be formed? How many moles of LiNO3 are
expected?
If 3 mL of 1.0 M Li2S is mixed with 3 mL of 0.50 M
Co(NO3)2, how many grams of CoS will be
produced?
After the reaction is complete, there are 50 mL of 0.5 M LiNO3 present. How much CoS (in grams) was also produced? (No information about the reactants is needed)
In: Chemistry
Predict Reactivity of Organometallic Compounds For each set of compounds, predict which type of reaction is expected… Hint: the following reaction types can be considered: associative ligand substitution, dissociative ligand substitution, interchange ligand substitution, SN1cB substitution, oxidation addition, reductive elimination, 1,1-migratory insertion, 1,2 migratory insertion, beta-hydride elimination, alpha-hydride elimination, sigma-bond metathesis, pi-bond metathesis (olefin metathesis), cyclometallation, redox/electron transfer, photochemical excitation, quantum entanglement
a. [Ni(CO)4] + PPh3
b. [Rh(Cl)(PMe3)3] + H2
c. [Mn(CO)5(CH3)] + CO
d. [FeCp2]BF4 + [CoCp2]
e. [Ir(CO)(Cl)(I)(Me)(PPh3)2]
f. [Pd(PPh3)3] + allyl chloride
g. [Pd(Cl)(PPh3)2(CH2CH3)]
h. [Ru=CMe2(trans-Cl)2(trans-(PPh3)2] + α-methylstyrene
In: Chemistry
Houston Co. issues $100 million in bonds on January 1, 2017 to expire in 6 years. Interest is paid semi-annually on June 30 and December 31. The coupon (stated) rate and the yield are given below. Dallas Inc. purchased $1 million of the bonds (face value). Dallas Inc. classifies the bonds as available for sale.
Stated Coupon Rate= 4.5% Market Yield Rate= 4%
a.) Calculate the price and prepare the amortization table the $100 million bonds issued by Houston Co.
b.) Prepare the journal entry at issuance for Houston Co.
c.) Prepare the two interest expense entries for 2017 for Houston Co.
d.) Prepare the amortization table for the $1 million bonds purchased by Dallas Inc.
e.) Prepare the journal entry for purchase of the bonds by Dallas Inc. at the issue price.
f.) Prepare the two journal entries for the receipt of interest revenue by Dallas Inc.
g.) Assuming that the market price of the bonds is 101 on December 31, 2017, prepare the necessary journal for Dallas Inc.
In: Accounting
Houston Co. issues $100 million in bonds on January 1, 2017 to expire in 6 years. Interest is paid semi-annually on June 30 and December 31. The coupon (stated) rate and the yield are given below. Dallas Inc. purchased $1 million of the bonds (face value). Dallas Inc. classifies the bonds as available for sale
Coupon rate= 6.5% Yield=6%
A)Calculate the price and prepare the amortization table the $100 million bonds issued by Houston Co.
B)Prepare the journal entry at issuance for Houston Co.
C)Prepare the two interest expense entries for 2017 for Houston Co.
D)Prepare the amortization table for the $1 million bonds purchased by Dallas Inc.
E)Prepare the journal entry for purchase of the bonds by Dallas Inc. at the issue price.
F)Prepare the two journal entries for the receipt of interest revenue by Dallas Inc.
G)Assuming that the market price of the bonds is 101 on December 31, 2017, prepare the necessary journal for Dallas Inc.
In: Accounting
Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on January 1, 2018. At that date, Salt reported common stock outstanding of $1,050,000 and retained earnings of $840,000; the fair value of the noncontrolling interest was equal to 20 percent of the book value of Salt Company. Salt Co. sold equipment to Pepper Co. for a $720,000 on December 31, 2018. Salt Co. had originally purchased the equipment for $800,000 on January 1, 2015, with a useful life of 10 years and no salvage value. At the time of the purchase, Pepper Co. estimated that the equipment still had the same remaining useful life. Both companies use straight-line depreciation. Pepper sold land costing $132,000 to Salt Company on June 28, 2019, for $178,000.
a) Prepare Pepper’s journal entries related to intercompany sale of land and equipment for 2019.
b) Prepare the consolidation entries that related to intercompany sale of land for 2019.
c) Prepare the consolidation entries that related to intercompany sale of equipment for 2019.
In: Accounting
On December 21, 2017, Nash Company provided you with the following information regarding its equity investments. December 31, 2017 Investments (Trading) Cost Fair Value Unrealized Gain (Loss) Clemson Corp. stock $19,900 $19,000 $(900 ) Colorado Co. stock 10,100 9,100 (1,000 ) Buffaloes Co. stock 19,900 20,460 560 Total of portfolio $49,900 $48,560 (1,340 ) Previous fair value adjustment balance 0 Fair value adjustment—Cr. $(1,340 ) During 2018, Colorado Company stock was sold for $9,590. The fair value of the stock on December 31, 2018, was Clemson Corp. stock—$19,100; Buffaloes Co. stock—$20,360. None of the equity investments result in significant influence. (a) Prepare the adjusting journal entry needed on December 31, 2017. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2018. (c) Prepare the adjusting journal entry needed on December 31, 2018.
In: Accounting