Company X has 8 million shares of common stock outstanding. The current share price is $57, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $70.8 million and a coupon rate of 7 percent and sells for 107 percent of par. The second issue has a face value of $60 million and a coupon rate of 7 percent and sells for 109 percent of par. The first issue matures in 9 years, the second in 26 years. Suppose the company’s stock has a beta of 1.3. The risk-free rate is 3 percent, and the market risk premium is 7 percent. Assume that the overall cost of debt is the weighted average implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 40 percent. What is the company’s WACC? (9 points)

Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $71, and the book value per share is $10. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, a coupon rate of 4 percent, and sells for 96 percent of par. The second issue has a face value of $65 million, a coupon rate of 3 percent, and sells for 108 percent of par. The first issue matures in 20 years, the second in 9 years. Suppose the most recent dividend was $4.35 and the dividend growth rate is 4.6 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 22 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Brunswick Corporation. The machines immediately were overhauled, installed, and started operating. The machines were different; therefore, each had to be recorded separately in the accounts.

By the end of the first year, each machine had been operating 6,500 hours.

2. Prepare the entry to record depreciation expense at the end of Year 1, assuming the following. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $75, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $85 million, a coupon of 10 percent, and sells for 96 percent of par. The second issue has a face value of $65 million, a coupon of 11 percent, and sells for 109 percent of par. The first issue matures in 25 years, the second in 9 years. a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Equity/Value Debt/Value b. What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Equity/Value Debt/Value

Adelaide Briton Ltd was registered on the first of July 2020. The company’s directors issue a disclosure document inviting applicants for 2 000 000 ordinary shares for an issue price of $1. The share is payable 60c on application and 20c on allotment. Adelaide Briton Ltd reserves the right to allot to individual applicants on a pro rata base, a lesser number of shares than the number applied for, and may apply excess application monies to the allotment and to calls in advance. The company’s director must allot exactly 2 000 000 shares. First Scenario: Applications for 2 200 000 shares are received with the correct application money. Second Scenario: Applications for 2 750 000 shares are received with the correct application money. Required: For each of the above scenarios: Calculate the amount of application money that would be applied to application and calls (including allotment). Prepare journal entries.

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Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $89, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $85 million, a coupon of 6 percent, and sells for 96 percent of par. The second issue has a face value of $60 million, a coupon of 7 percent, and sells for 109 percent of par. The first issue matures in 21 years, the second in 9 years.

a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Equity/Value

Debt/Value

b. What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Equity/Value

Debt/Value

1. Company A wishes to purchase a small operating mine, which has a remaining production life of 5 years, from Company B. Company B’s selling price for the mine is $10,000,000. Company A also plans to invest $2,500,000 in upgrading the mine and its infrastructure in the first year, and no production will occur during the first year. Based on recent history and future projections, the mine is expected to generate an annual, before-tax profit of $5,000,000 for its remaining life, after the upgrades and starting in year 2. At the end of mine’s production life, it is expected to cost $4,000,000 to close the mine, which will be incurred at the end of the 7^th year. The salvage value of the mine’s equipment is expected to be $1,500,000, which will also occur at the end of the 7^th year. Company A requires a minimum rate of return of 15%.
2. 1. Determine if the purchase of this mine is a good investment using NPV.
   2. What is the PVR
   3. Draw a Cumulative NPV diagram for the project
   4. What is the Discounted Payback?

irkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available.

Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.)