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(Solved) I'm looking to have the answers to the following questions completed in less than 1 hour. If so I will give a $5.00 tip. Using the security market...


I need help answering the questions in the attached file. There are 9 questions, please use original content when answering. I will include a $5.00 tip if completed in 1 hour.

I’m looking to have the answers to the following questions completed in less than 1
hour. If so I will give a $5.00 tip.
1. Using the security market line formula rather than the dividend discount
formula, determine the expected return on a firm's common stock when:
(a) beta = 1.0;
(b) the risk-free rate is 4%; and
(c) marketplace interest rates have hovered around 9%.
2. Calculate the appropriate selling price of a 30-year 5% coupon, $1,000
corporate bond that was purchased five years ago. Marketplace interest rates
are averaging 8%. 3. Given the data below, calculate the expected return, variance, and standard
deviation of the following company.
In a recessionary economy, which is expected to occur with a 30% probability,
the expected returns would be -5%.
In an expanding economy with an expected probability of occurrence of 20%,
the expected return would be 10%.
In a normal economy expected to occur 50% of the time, the expected return
would be 5%. 4. As percentage of debt on the balance sheet increases, financial leverage
increases, which makes EPS increase. If this is the case, why don't all firms
try to end up with very high debt? 5. What would be the expected change to a 30-year bond's market price or value
if its YTM increases to 9.4%? Its YTM is now 8.5%, it has an 8% annual coupon,
$1,000 face value, it is currently priced at $897.26, and its duration is eight
years. 6. What are M&M Propositions with and without taxes all about? Please explain,
and you must use your own words to earn credit. 7. A $1,000 face value bond was issued at par 20 years ago with a 6% coupon
paid semiannually. The bond now has nine years remaining to maturity and
similar debt obligations are yielding 12%.
Compute the current price of the bond.
Assuming that the bond is sold at its current price, what is the
capital gain or loss from the original purchase?
Now assume that the price of the bond returns to par. What is the
percentage capital gain or loss for the new owner?
Please explain why the percentage gain is different from the
percentage loss. 8. What is the interest rate needed on a $1,000 face value, 6%
coupon corporate bond to make it equivalent in terms of return
to one whose interest rate is tax free? Assume the corporate tax
rate is 30%. 9. (TCO 6) Calculate the five ratios for the following company info. Income Statement
Revenue
10,000
EBIT
Interest $2,000
$500 Earnings B4 Tax $1,500
EAT (at 30%)
- $1,050 return on sales
- ROA
- ROE
- fixed asset turnover
- times interest earned Balance Sheet
Assets
cash $1,000 A/R $10,000 Liab. + OE
a/p
Bonds payable Equip $25,000 Bldg $100,000 Total $136,000 $2,000 equity $50,000
$84,000 $136,000

 


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