ABC Corp. has 10 million shares of common stock outstanding. The common stock currently sells for $65 per share and has a beta of 0.75. The market risk premium is 8 percent and the risk-free rate is 3 percent. The company has 2 million shares of preferred stock outstanding. The preferred stock currently sells for $80 per share and pays 4 percent dividend for each $100 face value. The company also has 1 million semiannual bonds outstanding with a 6% coupon interest rate and par value $1,000 each. The bonds have 20 years to maturity and sell for 115 percent of the par. The company's average tax rate is 35 percent. Answer the following questions. (1) Compute the cost of common equity (RE), the preferred stock (RP), and the pre-tax cost of bond (RD)? (2)What are the capital structure weights (WE, WP, and WD)?

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?

With signals from no-claim bonuses and deductibles, a. the marginal cost curve for careful drivers lies to the left of the marginal cost curve for aggressive drivers b. auto insurance companies insure more aggressive drivers than careful drivers because aggressive drivers have a greater need for the insurance c. the market for car insurance has a separating equilibrium, and the market is efficient d. most drivers pay higher premiums than if the market had no signals

What are six resources for you decide which type of business to start and how to start it?