26. The price-earnings ratio of a company is 25. What is the cost of the common stock for this company?

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asked 12 years ago in Economics by anonymous

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27. Assume that the debt ratio is 60 percent, the cost of debt is 6 percent, the cost of equity is 10 percent, the tax rate is 50 percent, and annual earnings after taxes are $10,000 for a multinational company. What are the company's weighted average cost of capital and its market value?

asked 12 years ago in Economics by anonymous

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26. Assume that the per-share prices of a common stock are $40, $50, and $60 for three days. Calculate the average price, the standard deviation, and the coefficient of variation for the stock.

asked 12 years ago in Economics by anonymous

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26. A Canadian company has a total of $450,000 in tax loss carryforwards. To use these losses and to diversify its operations, a US company has acquired the Canadian company through a merger. The US company expects to have earnings before taxes of $300,000 per year. Assume: the US company is in the 40-percent tax bracket and all the losses can be carried forward. How much tax can the US company reduce through this merger?

asked 12 years ago in Economics by anonymous

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28. A firm's next year earnings are expected to be $4.00 per share, and the firm follows a practice of paying out 60 percent of earnings as dividends. The long-term growth rate for this firm is 5 percent and the appropriate discount rate is 12 percent. What is the price of this stock?

asked 12 years ago in Economics by anonymous

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24. The riskless rate of interest is 6 percent, the expected rate of return on a market portfolio is 8 percent, and the beta coefficient of a common stock is 1.2. What is the cost of this common stock?

asked 12 years ago in Economics by anonymous