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answer following questions 1. You purchase equipment for $10,000. You expect to sell the equipment for $800 When you are done with it in 5

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1. You purchase equipment for $10,000. You expect to sell the equipment for $800 When you are done with it in 5 years. The company's marginal tax rate is 30%. What is the depreciation expense for each year and the after-tax salvage in year 5 if straight-line method is adopted? 2. Supposed that the company pay dividend of $1.50 per share this year. The dividend growth rate for the first three year is 15%. There will be a steady growth in dividends of 8% afterward. The required rate of return is 10%. What is the current price of the stock? 4. Suppose you company has an equity beta of 1.15, and the current risk-free rate is 5.2%. If the expected market risk premium is 7.9%, what is your cost of equity capital? How does the beta value affect the cost of equity? 5. Your company has preferred stock that has an annual dividend of $5. If the current price is $30, what is the cost of preferred stock? 6. Suppose you have a market value of equity equal $600 million and a market value of debt equal to $800 million. What are the capital structure weights? 7. A call option has an exercise price of $60. i. What is the value of the call option at expiration if the stock price is $45? ii. What is the value of the call option at expiration if the stock price is $65? 8. Suppose you have $5,000. Based on the rates of 1USD = 120 Yen, how many Japanese Yen can you buy

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