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Need help with calculations Problem 3A Team Problem The professor is thinking of coming up with a new business. You know that I need a
Need help with calculations
Problem 3A Team Problem The professor is thinking of coming up with a new business. You know that I need a total of $10,000 to start the business. However, there are multiple ways to get this money. Pick the best combination from the following options. Stock Bob will buy up to 500 shares of $10 common stock, but would expect next year dividends of $0.50 and a 5% annual growth rate. Sarah will buy up to 1,000 shares of $10 common stock, but would expect next year dividends of $2 and a 1% annual growth rate. Debt Bank A will loan you up to $2,000 for a rate of 7% Bank B will loan you up to $8,000 for a rate of 9% Bank C will loan you up to $5,000 for a rate at 12% Preferred Stock George will buy one share of $1,000 of preferred stock for an annual return of $60 Sarah will buy on share of $1,000 of preferred stock for an annual return of $100 Bob will buy two shares of $1,000 of preferred stock for an annual return of $160 Submit a Word file explaining your decision. You should include the WACC, and well as explain your approach and calculations. Use a similar memo format to earlier problems This problem counts as half of problem 3 in the syllabus. Shmissionatatum Problem 3A Team Problem The professor is thinking of coming up with a new business. You know that I need a total of $10,000 to start the business. However, there are multiple ways to get this money. Pick the best combination from the following options. Stock Bob will buy up to 500 shares of $10 common stock, but would expect next year dividends of $0.50 and a 5% annual growth rate. Sarah will buy up to 1,000 shares of $10 common stock, but would expect next year dividends of $2 and a 1% annual growth rate. Debt Bank A will loan you up to $2,000 for a rate of 7% Bank B will loan you up to $8,000 for a rate of 9% Bank C will loan you up to $5,000 for a rate at 12% Preferred Stock George will buy one share of $1,000 of preferred stock for an annual return of $60 Sarah will buy on share of $1,000 of preferred stock for an annual return of $100 Bob will buy two shares of $1,000 of preferred stock for an annual return of $160 Submit a Word file explaining your decision. You should include the WACC, and well as explain your approach and calculations. Use a similar memo format to earlier problems This problem counts as half of problem 3 in the syllabus. ShmissionatatumStep by Step Solution
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