{"id":178987,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/finance-1-assignment-2"},"modified":"2018-10-24T09:32:49","modified_gmt":"2018-10-24T09:32:49","slug":"finance-1-assignment-2","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/finance-1-assignment-2\/","title":{"rendered":"FINANCE 1 ASSIGNMENT"},"content":{"rendered":"<p><a class=\"finance-1-assignment-5\/\"><\/a> <\/p>\n<p>Chapter 9(9-10) The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Shelby\u2019s common stock sells for $23 per share, its last dividend was$2.00, and the company will pay a dividend of $2.14 at the end of the current year.a. Using the discounted cash flow approach, what is its cost of equity?b. If the firm\u2019s beta is 1.6, the risk-free rate is 9%, and the expected return on the market is 13%, then what would be the firm\u2019s cost of equity based on the CAPM approach?(10-1) A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 7 years, and a cost of capital of 11%. What is the project\u2019s NPV? (Hint: Begin by constructing a time line.)(10-2) Refer to Problem 10-1. What is the project\u2019s IRR?(10-3) Refer to Problem 10-1. What is the project\u2019s MIRR?(10-4) Refer to Problem 10-1. What is the project\u2019s PI?(10-5) Refer to Problem 10-1. What is the project\u2019s payback period?(10-6) Refer to Problem 10-1. What is the project\u2019s discounted payback period?(10-7) your division is considering two investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments will produce the following net cash flows:a. What are the two projects\u2019 net present values, assuming the cost of capital is 5%?10%? 15%?b. What are the two projects\u2019 IRRs at these same costs of capital? Year Project A Project B1 $ 5,000,000 $20,000,0002 10,000,000 10,000,0003 20,000,000 6,000,000<br \/> (25-2) An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free rate is 6%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If bi1= 0.7 and bi2 = 0.9, what is Crisp\u2019s required return?<br \/> (5-2) Wilson Wonders\u2019 bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the cou<i><\/i>pon interest rate is 10%. The bonds sell at a price of $850. What is their yield to maturity?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Chapter 9(9-10) The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Shelby\u2019s common stock sells for $23 per share, its last dividend was$2.00, and the company will pay a <a href=\"https:\/\/www.benedictsol.com\/blogs\/finance-1-assignment-2\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-178987","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/178987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=178987"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/178987\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=178987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=178987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=178987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}