The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firms beta is 1.22. The rate on six-month T-bills is 2.18%, and the return on the S&P 500 index is 6.32%. What is the appropriate cost for retained earnings in determining the firms cost of capital?

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Dan is considering the purchase of Super Technology, Inc. bonds that were issued 9 years ago. When the bonds were originally sold they had a 21-year maturity and a 6.54 percent coupon interest rate, paid annually. The bond is currently selling for $900. Par value of the bond is $1,000. What is the yield to maturity on the bonds if you purchased the bond today?

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Green Landscaping, Inc. is using net present value (NPV) when evaluating projects. Green Landscapings cost of capital is 13.76 percent. What is the NPV of a project if the initial costs are $2,115,455 and the project life is estimated as 11 years? The project will produce the same after-tax cash inflows of $562,972 per year at the end of the year.

Round the answer to two decimal places.

Calculate the cost of new common equity financing of stock Q using Gordon Model

Round the answers to two decimal places in percentage form (Write the percentage sign in the "units" box)

	Last Year Dividend	Growth Rate of Dividends	Selling Price of Stock	Floatation Costs	Cost of Common Equity
Stock Q	$5.00	3%	$39.86	$3.07	?

Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price, and the required rate of return for these securities are stated in the table below. The firms tax rate is 35%.

Calculate the firm's WACC adjusted for taxes using the market information in the table.

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box)

	The Number of Securities Outstanding	Selling price	The Required Rate of Return
Bonds	1,587	$1,070	9.16%
Preferred Stocks	4,387	$96.62	17.25%
Common Stocks	1,430	$107.46	15.32%

Green Company's common stock is currently selling for $70.96 per share. Last year, the company paid dividends of $1.97 per share. The projected growth at a rate of dividends for this stock is 6.30 percent. Which rate of return does the investor expect to receive on this stock if it is purchased today?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Leaf It To Us Corporation is considering an expansion project. The necessary equipment could be purchased for $18,223,913 and shipping and installation costs are another $28,822. The project will also require an initial $266,373 investment in net working capital. What is the projects initial investment outlay?

Round the answer to the whole $.

Use the information below to determine before-tax cost of debt financing of bond S.

	The Selling Price of the Bond (P)	Number of Years to Maturity (n)	Annual Coupon Rate, (paid annually)	Par Value	Floatation Costs	Before -Tax Cost of Debt Financing (%)
Bond S	$1,050	29	6.55%	$1,000	$2.39	?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Golden Rod Corp.'s preferred stock is currently selling for $64.35. The company pays $7.39 annual dividends on this preferred stock. Which rate of return does the investor expect to receive on this stock if the stock is purchased today?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Pet Food Company bonds pay an annual coupon rate of 13.39 percent. Coupon payments are paid semiannually. Bonds have 17 years to maturity and par value of $1,000. Compute the value of Pet Food Company bonds if the market interest rate on this type of bond is 12.55 percent.

Round the answer to two decimal places.

What is the yield to maturity of a 23-year bond that pays a coupon rate of 7.05 percent per year, has a $1,000 par value, and is currently priced at $1,487? Assume annual coupon payments.

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

You should use Excel or financial calculator.

Black Water Corp. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 26 years and a yield to maturity of 10.26 percent, compounded annually. What is the current price of the bond?

Round the answer to two decimal places.

Find the internal rate of return (IRR) for the following series of future cash flows. The initial outlay is $795,800.

Year 1: 168,500

Year 2: 226,500

Year 3: 238,500

Year 4: 170,800

Year 5: 179,900

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)