FIN 620 Homework Assignment 1
Problem 10-8 Risk Premiums
Problem 10-4 Calculating Returns
FIN 620 Homework Assignment 2
Problem 13-2 Calculating Cost of Debt
Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 17 years to maturity that is quoted at 95 percent of face value. The...
FIN 620 Homework Assignment 3
Problem 15-6 Valuing Callable Bonds
New Business Ventures, Inc., has an outstanding perpetual bond with a 10 percent coupon rate that can be called in one year. The bond makes annual coupon payments. The call...
FIN 620 Homework Assignment 4
Problem 16-12 Calculating WACC
Weston Industries has a debt–equity ratio of 1.5. Its WACC is 11 percent, and its cost of debt is 7 percent. The corporate tax rate is 35 percent.
FIN 620 Homework Assignment 5
Problem 17-10 Personal Taxes, Bankruptcy Costs, and Firm Value
Overnight Publishing Company (OPC) has $2.5 million in excess cash. The firm plans to use this cash either to retire all of its outstanding debt...
FIN 620 Homework Assignment 6
Problem 20-14 Rights
Summit Corp.'s stock is currently selling at $32 per share. There are 1 million shares outstanding. The firm is planning to raise $2 million to finance a new project. What are the...
FIN 620 Homework Assignment 7
Problem 22-14 Black - Scholes and Asset Value
You own a lot in Key West, Florida, that is currently unused. Similar lots have recently sold for $1.1 million. Over the past five years, the price of land...
FIN 620 Homework Assignment 8
Problem 25-6 Duration
What is the duration of a bond with three years to maturity and a coupon of 7 percent paid annually if the bond sells at par?
Problem 25-4 Marking to Market...
FIN 620 Homework Assignment 9
Problem 19-10 Dividends and Stock Price
The Mann Company belongs to a risk class for which the appropriate discount rate is 10 percent. Mann currently has 220,000 outstanding shares selling at $110 each. The...