Finance Problems –WACC, Beta, cost of equity, etc

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Finance Problems –WACC, Beta, cost of equity, etc.6. P14-13 Calculating the WACC [LO3]Filer Manufacturing has 9.6 million shares of common stock outstanding. The current share price is $46,and the book value per share is $4. Filer Manufacturing also has two bond issues outstanding. The firstbond issue has a face value of $70 million, has a 6 percent coupon, and sells for 97 percent of par. Thesecond issue has a face value of $58.56 million, has a 6 percent coupon, and sells for 101.5 percent ofpar. The first issue matures in 11 years, the second in 7 years.The most recent dividend was $3.3 and the dividend growth rate is 4.3 percent. Assume that the overallcost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds makesemiannual payments. The tax rate is 34 percent.Required:What is the company’s WACC? (Do not round your intermediate calculations.)8847295427895889%13404993072569522%9024241336453808%8404930656501094%8493403610780053% 8. 15-3: MC Qu. 58You are a broker and have been instructed to place an order for a client to purchase 100 shares of every IPO thatcomes to market. The next two IPOs are each priced at$20 a share and will begin trading on the same day. The clientis allocated 10 shares of IPO A and 100 shares of IPO B. At the end of the first day of trading, IPO A was selling for$47 a share and IPO B was selling for $17 a share. What is the client’s total profit or loss on these two IPOs as of theend of the first day of trading?370170-301,950-250 16. P14-2 Calculating Cost of Equity [LO1]The Up and Coming Corporation’s common stock has a beta of 1.5. If the risk-free rate is 6 percent andthe expected return on the market is 13 percent, what is the company’s cost of equity capital? (Do notround your intermediate calculations.)17.16%16.5%17.32%25.5%15.68% 18. 13-4: C Qu. 80What is the beta of the following portfolio? StockABC Amount Invested$2,000$3,000$5,000 Security Beta1.201.460.84 1.0791.0981.0080.2581.112 19. 14-1: MC Qu. 45Southern Home Cookin’ just paid its annual dividend of $.75 a share. The stock has a market price of $32 and a betaof 1.1. The return on the U.S. Treasury bill is 5 percent and the market risk premium is 14 percent. What is the cost ofequity?16.44 percent 24.00 percent22.12 percent20.40 percent17.87 percent 20. 12-2: MC Qu. 63Four months ago, you purchased 1,200 shares of Lakeside Bank stock for $21.20 a share. You have receiveddividend payments equal to $.56 a share. Today, you sold all of your shares for $22.20 a share. What is your totaldollar return on this investment?$1,200$672$3,744$1,872$1,344