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You purchase a boat with an amortizing loan of $24,000 and make 10 annual payments of $3,576.71. What is the interest rate on the loan? Scott Industries strives to maintain a capital structure of 50% debt and 50% common stock equity. Interest on debt is 10% and Scott has a 20% tax rate. Common stock sells for $100 a share and Scott is currently paying a SS dividend on common stock. Scott and his dividend has been growing about 8% year. Calculate Scott's WACC. Using the information frorn #2, Scott is notified by his bank that he can borrow another si million dollars at 10% but they will charge him 12% for any amount greater than $1 million up to $3 million. After S3 million, they will charge him 1 5% interest. Scott has determined that he will earn $750,000 in net income for the current year. Calculate his MCC if he needs to borrow: 1. 2. 3. a. $950,000. b. $2,500,000 c. $3,250,000. Scott has two independent projects available for investment. His WACC is 15%. Below is the key information for each project: 4. Year Project A Project B ($10,000) 2,000 4,000 ($12,000) 1 6,000 3 4,000 4 4,000 5 4,000 Which project has the quickest payback? Which project has the quickest payback using the NPV method? 1,000 1,000 1,000 a. b. Which project has the highest NPV? Nina Corporation has 3,000,000 shares issued and outstanding. An activist (minority) investor is trying to place members onto the Board of Directors. There are 5 seats being contested in the current election and the activist control 40% while Nina controls the other 60%. 5. a. What is the maximum number of seats the minority can secure? What is the maximum number of seats that Nina can secure? b. Scott owns 250 shares of Nina Corporation. Nina has issued two rights for every share of stock outstanding. Th rights allow the owner to purchase one share of stock for $100 and 4 rights. Scott's stock currently sells for 6. How much are the rights worth if a. b. c. $50 a share $100 a share $120 a share. Nina owns 100 shares of Dima Inc. Dima issues one right for every share to purchase one share of Dima stock $50 and 5 rights. The current price of Dima is $60 a share. How much are the rights worth if the shares sell: 7. a. Rights on. b. Rights off. EC: (5 points and not eligible for corrections). When reviewing stock broker's analysis of publicly traded companies, a Beta is often listed. investor? For full credit, how is it calculated? What does the Beta tell th