ANSWER NEEDED ASAP! THANK YOU FOR HELPING

1.Your company are about to acquire a new equipment. The equipment will cost $300,000, and it must be replaced in four years, after which it is worthless. The equipment can be depreciated at a 20% CCA rate. Your company decides to raise funds by issuing debt with an interest rate of 8%. If the tax rate is 34%, what would be the break-even pre-tax lease fee?

Question 3 options:

	$90,413
	$59,673
	$95,187
	Cannot be determined.
	$85,200

2

Which of the following statements about rights offerings is true?

Question 1 options:

	In rights offering, investors who buy stocks on the ex-right day can purchase new shares at the subscription price.
	Theoretically, the price drop on the ex-right day is greater than the value of one right.
	In rights offering, one right would allow existing shareholders to purchase one new share.
	If existing shareholders choose not to participate in the rights offering, they cannot sell their rights to other investors in the market.
	Rights offerings may protect existing shareholders from dilution.

3.

Peter holds 2,500 shares of stock of ABC Company. There are 125,000 shares of stock outstanding in the market. Today, the company announced that it will do a rights offering to raise money for a new project. Specifically, 25,000 shares are being offered for sale at a subscription price of $30 a share. The current stock price is $39 a share. Assume that Peter will fully exercise his rights to participate in the offering. What will his ownership percentage be after the offering?

Question 4 options:

	3.83%
	3.30%
	2.50%
	2.00%
	0.05%

4.

Peter holds 2,500 shares of stock of ABC Company. There are 125,000 shares of stock outstanding in the market. Today, the company announced that it will do a rights offering to raise money for a new project. Specifically, 25,000 shares are being offered for sale at a subscription price of $30 a share. The current stock price is $39 a share. Assume that Peter will fully exercise his rights to participate in the offering. What will his ownership percentage be after the offering?

Question 4 options:

	3.83%
	3.30%
	2.50%
	2.00%
	0.05%