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Financial Management - Assignment Sample

   

Added on  2020-05-28

12 Pages1340 Words159 Views
Running Head: Financial Management: Theory and PracticeFinancial Management: Theoryand Practice
Financial Management - Assignment Sample_1
Financial Management: Theory and Practice2Table of ContentsChapter 9...............................................................................................................................................3Chapter 10.............................................................................................................................................4Chapter 11.............................................................................................................................................9Chapter 12...........................................................................................................................................12
Financial Management - Assignment Sample_2
Financial Management: Theory and Practice3Chapter 9QUESTION 9-2Calculation of Cost of DebtYield to Maturity®8%Tax rate35%Cost of Debt [r(1- Tax)]5.20%QUESTION 9-5Calculation of Cost of EquityPrice(P0) $ 36.00 Dividend(D1) $ 3.00 Growth Rate(G)5%Ke [(D1/Po)+G]13.33%QUESTION 9-6Calculation of Cost of EquityBeta(β)0.8Risk Free Rate(Rf)6%Market Risk Premium(Rm-Rf)0.055Ke [Rf+(Rm-Rf)*β]10.40%QUESTION 9-8Capital structureDebt (Wd)0.4Equity (We)0.6Kd0.054WACC[(Ke*We+Kd*Wd)/We+Wd]0.0996Ke [{WACC(We+Wd)- Kd*Wd}/We]13.00%
Financial Management - Assignment Sample_3
Financial Management: Theory and Practice4Chapter 10QUESTION 10-1 Initial Investment($) 40,000.00 Net cash Inflows(Year 1-7)($) 9000/Year Cost of Capital 11% Calculation of NPV Year Cash Flows PVF @ 11% PV of Cash Inflows 0 -40,000.00 1.00 -40,000.00 1 9,000.00 0.90 8,108.11 2 9,000.00 0.81 7,304.60 3 9,000.00 0.73 6,580.72 4 9,000.00 0.66 5,928.58 5 9,000.00 0.59 5,341.06 6 9,000.00 0.53 4,811.77 7 9,000.00 0.48 4,334.93 NPV 2,409.77 QUESTION 10-2 Calculation of IRR (Amount in $) Year Cash Flows 0 -40,000.00 1 9,000.00 2 9,000.00 3 9,000.00 4 9,000.00 5 9,000.00 6 9,000.00 7 9,000.00 IRR 0.13
Financial Management - Assignment Sample_4

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