BUSI 620 MENTOR It's Your Life/busi620mentor.com BUSI 620 MENTOR It's Your Life/busi620mentor.com | Page 47
Problem 10: The MacBurger Company, a chain of fast-food restaurants, expects to earn $ 200 million after taxes for the current year. The company has a policy of paying out half of its net after-tax income to the holders of the company’ s 100 million shares of common stock. A share of common stock of the company current sells for eight times current earnings. Management and outside analysts expect the growth rate of earnings and dividends for the company to be 7.5 percent per year. Calculate the cost of equity capital to this firm.
Spreadsheet Problem 1: The benefits and costs of an investment project( the purchase of a piece of machinery) are those given in the following table. In excel, calculate the net revenue, or the revenue from the investment minus the costs; the present value coefficient for every year, and the present value of the net revenue. Add together column F to get the net present value of the project. Should the firm purchase the machine?
============================================= BUSI 620 Week 8 Test 2( 100 % Score)
100 % Score
Problem 10: The MacBurger Company, a chain of fast-food restaurants, expects to earn $ 200 million after taxes for the current year. The company has a policy of paying out half of its net after-tax income to the holders of the company’ s 100 million shares of common stock. A share of common stock of the company current sells for eight times current earnings. Management and outside analysts expect the growth rate of earnings and dividends for the company to be 7.5 percent per year. Calculate the cost of equity capital to this firm.
Spreadsheet Problem 1: The benefits and costs of an investment project( the purchase of a piece of machinery) are those given in the following table. In excel, calculate the net revenue, or the revenue from the investment minus the costs; the present value coefficient for every year, and the present value of the net revenue. Add together column F to get the net present value of the project. Should the firm purchase the machine?
============================================= BUSI 620 Week 8 Test 2( 100 % Score)