Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

(a) Develop a user defined function MyVar that calculates a variance by using the following equation: MyVar = 5 17 (3x7 Avg) 2n-1 where

image

(a) Develop a user defined function "MyVar" that calculates a variance by using the following equation: MyVar = 5 17 (3x7 Avg) 2n-1 where Avg represents the average of variable X,. Use the values given on the sheet "P3a" to test the function. Remember that this function must have three arguments (X, Avg, and n). (b) Develop a user defined function "MySummer" that calculate the weighted average with the equation, MySummer (log(5x1) + xi (log (5x) +2x) . Use the values given on the sheet "P3a" to test the function. Reminder: this function must have two arguments, X, and n. (c) Write a macro function to estimate the Macaulay duration. Use the values given on sheet "P3a" to test your function. (d) Suppose Hollande Company uses debt, preferred stock and common stock to finance its capital budget and uses CAPM to compute its cost of equity. The capital structure is 25% debt, 32% preferred stock and 43% common stock. Before tax cost of debt is 4.35% and tax rate is 21%. The cost of preferred stock is 11.25%. The Risk free rate = 2.25% and market risk premium = 9.57%. Hollande Company has a beta of 1.51. Write a user defined function to compute the WACC. Hint the WACC is given by: WACC = Wd*Rd*(1-t) + Wps*Rps + Wcs*Rcs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

a Here is the user defined function to calculate variance Function MyVarX Avg n Dim sum ... blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Numerical Methods for Engineers

Authors: Steven C. Chapra, Raymond P. Canale

7th edition

978-0073397924, 007339792X, 978-0077492168, 77492161, 978-9352602131

More Books

Students explore these related Finance questions