Questions from General Finance


Q: a. Rework Problem 9-12 as follows: Assume an

a. Rework Problem 9-12 as follows: Assume an 8 percent coupon rate. What effect does changing the coupon rate have on the firm’s after-tax cost of capital? b. Why is there a change? Data from Problem...

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Q: Wingate Metal Products, Inc. sells materials to contractors who construct

Wingate Metal Products, Inc. sells materials to contractors who construct metal warehouses, storage buildings, and other structures. The firm has estimated its weighted average cost of capital to be 9...

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Q: Crawford Enterprises is a publicly held company located in Arnold, Kansas

Crawford Enterprises is a publicly held company located in Arnold, Kansas. The firm began as a small tool and die shop but grew over its 35-year life to become a leading supplier of metal fabrication...

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Q: The capital structure for the Carion Corporation is provided here. The

The capital structure for the Carion Corporation is provided here. The company plans to maintain its debt structure in the future. If the firm has a 5.5 percent after-tax cost of debt, a 13.5 percent...

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Q: ABBC, Inc. operates a very successful chain of yogurt and

ABBC, Inc. operates a very successful chain of yogurt and coffee shops spread across the southwestern part of the United States and needs to raise funds for its planned expansion into the Northwest. T...

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Q: Newcomb Vending Company manages soft drink dispensing machines in western Tennessee for

Newcomb Vending Company manages soft drink dispensing machines in western Tennessee for several of the major bottling companies in the area. When a machine malfunctions, the company sends out a repair...

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Q: LPT Inc. is an integrated oil company headquartered in Dallas,

LPT Inc. is an integrated oil company headquartered in Dallas, Texas. The company has three operating divisions: oil exploration and production (commonly referred to as E&P), pipelines, and refining....

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Q: Compute the cost of the following: a. A bond

Compute the cost of the following: a. A bond that has $1,000 par value (face value) and a contract or coupon interest rate of 9 percent. A new issue would have a flotation cost of 5 percent of the $1,...

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Q: In May of this year Newcastle Mfg. Company’s capital investment review

In May of this year Newcastle Mfg. Company’s capital investment review committee received two major investment proposals. One of the proposals was issued by the firm’s domestic manufacturing division,...

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Q: Saddle River Operating Company (SROC) is a Dallas-based

Saddle River Operating Company (SROC) is a Dallas-based independent oil and gas firm. In the past, the firm’s managers have used a single firm-wide cost of capital of 11 percent to evaluate new invest...

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