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Hello, I need help with 3 problems from financial management.Shouldnttakemorethan an hour. Please let me know ASAP if you cannot finish this in 2.5 hours.
Hello,
I need help with 3 problems from financial management.Shouldnttakemorethan an hour.
Please let me know ASAP if you cannot finish this in 2.5 hours.
Thanks.
Please, provide your solution including calculations. Q 19 To estimate the company's WACC, Marshall Inc. recently hired you as a consultant. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,050.00. (2) The company's tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares. What is its WACC? 7.16 % 7.54 % 7.93 % 8.35 % 8.79 % Q 20 You are considering investing in one of the these three stocks: Stock A B C Standard Deviation 20% 10% 12% Beta 0.59 0.61 1.29 If you are a strict risk minimizer, you would choose Stock ____ if it is to be held in isolation and Stock ____ if it is to be held as part of a well-diversified portfolio. A; B. B; A. C; A. C; B. A; AStep by Step Solution
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