Solutions to Chapter 12 The Cost of Capital 1. The yield to maturity for the bonds (since maturity is now 19 years) is the interest rate (r) that is the solution to the following equation: [$80 annuity factor(r‚ 19 years)] + [$1‚000/(1 + r)19] = $1‚050 Using a financial calculator‚ enter: n = 19‚ FV = 1000‚ PV = (-)1050‚ PMT = 90‚ and then compute i = 7.50% Therefore‚ the after-tax cost of debt is: 7.50% (1 – 0.35) = 4.88% 2. r = DIV/P0 = $4/$40 = 0.10 = 10% 3. = [0.3 7.50% (1
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Dingwei Wang Dec 15‚ 2012 Abolish Capital Punishment Capital punishment is the legally authorized killing of someone as punishment for a crime. In my country‚ China‚ the government could use of capital punishment to murderers‚ robbers‚ arsonists‚ and people who make felonies. Every year‚ many people have been killed by capital punishment policy ("Resource 1).They lost their life‚ rights‚ and relatives. they have no chance to amend their mistakes and thoroughly reform themselves. Although
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identification. He was almost given capital punishment. The death penalty is a very serious consequence‚ and we have to try to stop it. The death penalty was first established in the eighteenth century B.C to give a more serious consequence to criminals. It has evolved since then. In the 1930s‚ executions reached the highest levels in American history‚ averaging 167 deaths per year. I think the death penalty should be banned. There are so many reasons why capital punishment is unfair and dangerous
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Cost of Capital Firms need to make capital investment i.e.‚ purchasing fixed assets such as factories‚ machineries‚ equipment‚ etc. After deciding what capital investments to make‚ they need to decide on the financing – sources of capital. The sources: Long-Term Debt‚ Common Stock‚ Preferred Stock and Retained Earnings. Then they need to find the cost of obtaining each source of financing today (not historical). Cost of Capital - The rate of return that a firm must earn on its investment
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What is cost of capital? The cost of capital is the cost of obtaining funds‚ through debt or equity‚ in order to finance an investment. It is used to evaluate new projects of a company‚ as it is the minimum return that investors expect for providing capital to the company‚ thus setting a benchmark that a new project has to meet. Importance The concept of cost of capital is a major standard for comparison used in finance decisions. Acceptance or rejection of an investment project depends on the
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River County Capital Project Budget Proposal Funding of capital projects in the current year is guided by the projects potential impact on the well being of the community at large. Capital projects are intended to create the greatest good for number of River County citizens. Therefore‚ with this in mind projects are guided by the council priorities listed below. Many of the projects may relate to multiple priorities for instance‚ a project that creates good health and environment may also spur
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Capital Punishment is Wrong “ For hundreds of years people have considered capital punishment a deterrence of crime. Seven hundred and five individuals have died since 1976‚ by means of capital punishment; twenty-two of these executions have already occurred this year at Death Penalty Information Center”‚ exclaims Tara Volpe in her article‚ Capital Punishment: Does Death Equal Justice? In another article written by Coretta King‚ the author states that‚ “In recent years‚ an increase of violence
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Capital Structure Theories Capital Structure Capital Structure is the proportion of debt‚ preference and equity capitals in the total financing of the firm’s assets. The main objective of financial management is to maximize the value of the equity shares of the firm. Given this objective‚ the firm has to choose that financing mix/capital structure that results in maximizing the wealth of the equity shareholders. Such a capital structure is called as the optimum capital structure. At the optimum
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Case Summary Human Capital Consultants (HCC) is a consulting firm provides consultancy services regarding HR issues and specializes in strategic alignment and corporate change. The firm has a fairly friendly culture. As a result the employee turnover rate is considerably low. John Yeoung‚ the lead senior partner of HCC recruited Kay Johnson to join the firm. Though initially Kay was skeptical but after a lot of consideration along with pressure from Jhon and a lucrative compensation package Kay
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Capital Punishment is the use of death as punishment. In the 18th century Parliament was continuously enlarging the list of capital crimes‚ which were punishable by death‚ these included stealing in a shop to the value of five shillings‚ stealing anything at all privily from a person‚ sending threatening letters‚ sacrilege‚ and cutting down a tree. Starting in the 180s‚ the number of capital crimes slowly decreased. In 1861‚ murder became the only offence for which the death penalty was used in peacetime
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