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Financial Management II_FIN-3AB_20251
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To purchase a share in a rights offering, an existing shareholder generally just needs to:
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A company is an all-equity firm that has projected perpetual EBIT of $324,000. The current cost of equity is 12.4 percent and the tax rate is 21 percent. The company is in the process of issuing $940,000 worth of perpetual bonds with an annual coupon rate of 6.6 percent at par. What is the value of the levered firm?
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A company has an outstanding bond that matures in 11 years. The bond has a coupon rate of 2.67 percent and is paid semiannually. If the bond’s yield to maturity is 3.49 percent, and the bond’s par value is $5,000, the fair price of the bond is:
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A preferred stock currently sells for $99.33 per share. The stock pays an annual dividend of $3.99 every year in perpetuity. The stock’s required return is:
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Suppose a stock has a beta of 0.88. If the market’s expected return is 12.1 percent and the risk-free rate is 2.4 percent, the stock’s expected return is around:
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The correct relationship in a par value bond is:
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If the financial markets are assumed to be______________________, then the inside information would have the least value.
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Please calculate the beta of the portfolio if 21 percent of the fund is invested in Stock A, 34 percent in Stock B, and 45 percent in Stock C. The betas of the stocks are .66, 1.21, and 1.50, respectively.
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A company has a cost of equity of 11.02 percent, a pretax cost of debt of 5.42 percent, and a tax rate of 21 percent. The company's capital structure consists of 70 percent debt on a book value basis, but debt is 36 percent of the company's value on a market value basis. The company’s WACC is:
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How many years until this bond matures if the company offers a 5.2 percent semiannual bond with a current market price of $865.50. The yield to maturity is 6.24 percent. Assume the $1,000 principal value.
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