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Please I need the answer for both of them as they are related

A bank can purchase an additional ATM (automated teller machine) for $110,000 that has an estimated life of 6 years. Maintenance over that period will begin at $2,500 annually and increase by 8% per year. The ATM can be depreciated to no value during its useful life and has no resale value at that time. …

bank can purchase an additional ATM (automated t…Read More »

You just bought a house and have taken out a 20-year $150,000 mortgage to be paid monthly over the life of the loan. You negotiated for a 9% APR on the mortgage.What is the APY that is equivalent to this 9% APR?What is your monthly mortgage payment?To bring down your monthly payments, the lender has …

just bought a house and have taken out a 20-ye…Read More »

Edna Recording​ Studios, Inc., reported earnings available to common stock of ​$4,400,000 last year. From those​ earnings, the company paid a dividend of ​$1.18 on each of its1,000,000 common shares outstanding. The capital structure of the company includes 40​% ​debt, 10​% preferred​ stock, and 50​% common stock. It is taxed at a rate of40​%.a.  If the …

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A company has issued a 7% coupon bond payable in 10 years that is currently valued in the market at 95. a. What is the yield earned by anyone who buys this bond today and holds it until maturity? b. What is this bond’s yield?

A company has just completed a year which resulted in $10 earning per share and has just paid 30% of this amount to its shareholders as a dividend. Assume the common stock of similar companies returns 15% to their investors.If the company expects similar results in the foreseeable future, how much should a share of …

company has just completed a year which resulted…Read More »

Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following​ weights: 35​% ​long-term debt, 20​% preferred​ stock, and 45​% common stock equity​ (retained earnings, new common​ stock, …

Labs has asked its financial manager to mea…Read More »

Edna Recording​ Studios, Inc., reported earnings available to common stock of ​$4,400,000 last year. From those​ earnings, the company paid a dividend of ​$1.18 on each of its1,000,000 common shares outstanding. The capital structure of the company includes 40​% ​debt, 10​% preferred​ stock, and 50​% common stock. It is taxed at a rate of40​%.a.  If the …

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Sussman Industries purchased a drilling machine for $100,000 and paid cash. Sussman expects to use the machine for ten years after which it will have no value. It will be depreciated straight-line over the ten years. Assume a marginal tax rate of 43%. What are the cash flows associated with the machine. Round the answers …

Industries purchased a drilling machine fo…Read More »

 After careful​ analysis, Dexter Brothers has determined that its optimal capital structure is composed of the sources and target market value weights shown in the following​ table:Source of capitalTarget marketvalue weight​Long-term debt22​%Preferred stock13Common stock equity65Total100​%The cost of debt is estimated to be 7.2​%;the cost of preferred stock is estimated to be 12.3​%;the cost of retained …

careful​ analysis, Dexter Brothers has …Read More »