Comprehensive Corporate Finance Homework Solution - University Name
VerifiedAdded on  2022/12/19
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Homework Assignment
AI Summary
This document presents a detailed solution to a corporate finance assignment, addressing various key concepts and problems within the field. The assignment covers a wide range of topics, including capital budgeting, cost of capital calculations, investment decisions, and financing strategies. The solution analyzes different scenarios, providing explanations and calculations to support the answers. The assignment also delves into topics like weighted average cost of capital, after-tax cost of debt, and the impact of debt-to-equity ratios on financing costs. The solution includes a table of contents for easy navigation and a bibliography of relevant sources used in the analysis, offering a comprehensive understanding of corporate finance principles and their practical application. This resource is designed to help students understand and solve complex finance problems.

Running head: CORPORATE FINANCE
Corporate Finance
Name of the Student:
Name of the University:
Author’s Note:
Course ID:
Corporate Finance
Name of the Student:
Name of the University:
Author’s Note:
Course ID:
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1CORPORATE FINANCE
Table of Contents
Question 1:.......................................................................................................................................5
Question 3:.......................................................................................................................................5
Question 4:.......................................................................................................................................5
Part a:...........................................................................................................................................5
Part b:...........................................................................................................................................6
Question 5:.......................................................................................................................................6
Part a:...........................................................................................................................................6
Part b:...........................................................................................................................................6
Question 6:.......................................................................................................................................7
Part a:...........................................................................................................................................7
Part b:...........................................................................................................................................7
Question 7:.......................................................................................................................................7
Question 8:.......................................................................................................................................8
Part a:...........................................................................................................................................8
Part b:...........................................................................................................................................8
Part c:...........................................................................................................................................8
Part d:...........................................................................................................................................8
Question 9:.......................................................................................................................................9
Table of Contents
Question 1:.......................................................................................................................................5
Question 3:.......................................................................................................................................5
Question 4:.......................................................................................................................................5
Part a:...........................................................................................................................................5
Part b:...........................................................................................................................................6
Question 5:.......................................................................................................................................6
Part a:...........................................................................................................................................6
Part b:...........................................................................................................................................6
Question 6:.......................................................................................................................................7
Part a:...........................................................................................................................................7
Part b:...........................................................................................................................................7
Question 7:.......................................................................................................................................7
Question 8:.......................................................................................................................................8
Part a:...........................................................................................................................................8
Part b:...........................................................................................................................................8
Part c:...........................................................................................................................................8
Part d:...........................................................................................................................................8
Question 9:.......................................................................................................................................9

2CORPORATE FINANCE
Part a:...........................................................................................................................................9
Part b:...........................................................................................................................................9
Question 11:.....................................................................................................................................9
Part a:...........................................................................................................................................9
Part b:...........................................................................................................................................9
Question 12:...................................................................................................................................10
Question 13:...................................................................................................................................10
Part a:.........................................................................................................................................10
Part b:.........................................................................................................................................10
Question 14:...................................................................................................................................10
Part a:.........................................................................................................................................10
Part b:.........................................................................................................................................11
Question 15:...................................................................................................................................11
Part a:.........................................................................................................................................11
Part b:.........................................................................................................................................11
Part c:.........................................................................................................................................11
Question 17:...................................................................................................................................11
Question 18:...................................................................................................................................12
Part a:.........................................................................................................................................12
Part b:.........................................................................................................................................12
Part a:...........................................................................................................................................9
Part b:...........................................................................................................................................9
Question 11:.....................................................................................................................................9
Part a:...........................................................................................................................................9
Part b:...........................................................................................................................................9
Question 12:...................................................................................................................................10
Question 13:...................................................................................................................................10
Part a:.........................................................................................................................................10
Part b:.........................................................................................................................................10
Question 14:...................................................................................................................................10
Part a:.........................................................................................................................................10
Part b:.........................................................................................................................................11
Question 15:...................................................................................................................................11
Part a:.........................................................................................................................................11
Part b:.........................................................................................................................................11
Part c:.........................................................................................................................................11
Question 17:...................................................................................................................................11
Question 18:...................................................................................................................................12
Part a:.........................................................................................................................................12
Part b:.........................................................................................................................................12
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3CORPORATE FINANCE
Part c:.........................................................................................................................................12
Question 19:...................................................................................................................................12
Part a:.........................................................................................................................................12
Part b:.........................................................................................................................................13
Part c:.........................................................................................................................................13
Part d:.........................................................................................................................................13
Question 20:...................................................................................................................................14
Question 21:...................................................................................................................................14
Part a-1:......................................................................................................................................14
Part a-2:......................................................................................................................................14
Part b:.........................................................................................................................................15
Question 22:...................................................................................................................................15
Part a:.........................................................................................................................................15
Part b:.........................................................................................................................................15
Part c:.........................................................................................................................................15
Question 23:...................................................................................................................................16
Part a:.........................................................................................................................................16
Part b:.........................................................................................................................................16
Part c:.........................................................................................................................................16
Part d:.........................................................................................................................................16
Part c:.........................................................................................................................................12
Question 19:...................................................................................................................................12
Part a:.........................................................................................................................................12
Part b:.........................................................................................................................................13
Part c:.........................................................................................................................................13
Part d:.........................................................................................................................................13
Question 20:...................................................................................................................................14
Question 21:...................................................................................................................................14
Part a-1:......................................................................................................................................14
Part a-2:......................................................................................................................................14
Part b:.........................................................................................................................................15
Question 22:...................................................................................................................................15
Part a:.........................................................................................................................................15
Part b:.........................................................................................................................................15
Part c:.........................................................................................................................................15
Question 23:...................................................................................................................................16
Part a:.........................................................................................................................................16
Part b:.........................................................................................................................................16
Part c:.........................................................................................................................................16
Part d:.........................................................................................................................................16
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4CORPORATE FINANCE
Question 24:...................................................................................................................................17
Part a:.........................................................................................................................................17
Part b:.........................................................................................................................................17
Question 25:...................................................................................................................................17
Part a:.........................................................................................................................................17
Part b:.........................................................................................................................................17
Part c:.........................................................................................................................................18
Part d:.........................................................................................................................................18
Part e:.........................................................................................................................................18
Question 26:...................................................................................................................................18
Part a:.........................................................................................................................................18
Part b:.........................................................................................................................................19
Bibliographies:...............................................................................................................................20
Question 24:...................................................................................................................................17
Part a:.........................................................................................................................................17
Part b:.........................................................................................................................................17
Question 25:...................................................................................................................................17
Part a:.........................................................................................................................................17
Part b:.........................................................................................................................................17
Part c:.........................................................................................................................................18
Part d:.........................................................................................................................................18
Part e:.........................................................................................................................................18
Question 26:...................................................................................................................................18
Part a:.........................................................................................................................................18
Part b:.........................................................................................................................................19
Bibliographies:...............................................................................................................................20

5CORPORATE FINANCE
Question 1:
Question 3:
Question 4:
Part a:
Question 1:
Question 3:
Question 4:
Part a:
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6CORPORATE FINANCE
Part b:
Question 5:
Part a:
Part b:
Part b:
Question 5:
Part a:
Part b:
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7CORPORATE FINANCE
Question 6:
Part a:
Part b:
Question 7:
Question 6:
Part a:
Part b:
Question 7:

8CORPORATE FINANCE
Question 8:
Part a:
Part b:
Part c:
Part d:
Question 8:
Part a:
Part b:
Part c:
Part d:
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9CORPORATE FINANCE
Question 9:
Part a:
Part b:
Question 11:
Part a:
Part b:
New machine project should be accepted, as its return is more than weighted average cpst
of capital, while this is not the case with the piece of equipment.
Question 9:
Part a:
Part b:
Question 11:
Part a:
Part b:
New machine project should be accepted, as its return is more than weighted average cpst
of capital, while this is not the case with the piece of equipment.
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10CORPORATE FINANCE
Question 12:
Question 13:
Part a:
Part b:
Question 14:
Part a:
Question 12:
Question 13:
Part a:
Part b:
Question 14:
Part a:

11CORPORATE FINANCE
Part b:
Question 15:
Part a:
Part b:
Part c:
After-tax cost of debt has gone up from part a to part b.
Question 17:
Part b:
Question 15:
Part a:
Part b:
Part c:
After-tax cost of debt has gone up from part a to part b.
Question 17:
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