Explain a possible benefit of a corporation using

by | Mar 18, 2020 | Uncategorized

  

1. Explain a possible benefit of a corporation using debt and a possible problem of having debt?
Provide Examples
2. A manufacturer requires $1800 to purchase a new piece of equipment plans to use debt to
acquire the needed funds. One source will loan him $800 but requires 6% interest. A 2nd source
will provide him with $200 but requires 8% interest his 3rd and final source will loan him the
thousand dollars that he needs but at 12% interest. 

a) What is his WACC at the end of one year?
b) Find the NPV if the new equipment is expected to increase profits by $2000. 
c) Should he borrow the money to buy the equipment?
3. if 3M Corporation has a beta of .75 and DuPont has a beta of 1.5 what are the expected returns
of these 2 companies if the current market risk premium is 10% and the current risk free rate is 3%?
4. Joe wants to purchase common shares of Portland Cement Company stock and hold these
common shares for 7 years. The company has stated the following dividend policy: $7 annual
cash dividend per share for the next 7 years. At the end of 7 years Joe plans to sell the stock. He
believes that he will be able to sell the stock for $85. If Joe wants to earn 10% on this investment
what price should he pay today for the stock?
  

Why work with us?

Authenticity:

All of our papers are authentic, as each paper of ours is composed according to your unique requirements. Confidentiality: We value you data. Our company is extremely efficient in guarding the privacy of our clients. 100% Money Back Guarantee: In the event you cancel your order, you get your money back as soon as possible, we give a 100% refund. 24/7 Support: Our team members are available via email, live chat, and phone. Revision Policy: You can apply for a revision if you think your paper could be better. In this case, your paper will be revised either by the specialist assigned to you or by another writer.

How the Platform Works

  • Click on 'Place Your Order' tab on the menu or click on 'Order Now' tab at the bottom and a new order page will appear
  • Fill in your requirements depending on your needs under the 'PAPER DETAILS' area
  • In the next section, fill in the academic level, required number of pages, paper deadline as provided in the drop-down menus.
  • To enter your registration details, click on 'CREATE ACCOUNT & SIGN IN'. This step allows you to create an account with us for purposes of record-keeping. Click on 'PROCEED TO CHECK OUT' at the bottom of the page
  • The next section requires you to fill in the payment details. Follow the guided process and soon your order will be available for our team to work on.