FIN 571 NERD Education Specialist /fin571nerd.com FIN 571 NERD Education Specialist /fin571nerd.com | Page 47

current price? (Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.) What will the price be in
three years? (Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.) What will the price be in 7
years? (Do not round intermediate calculations and round your answer
to 2 decimal places, e.g., 32.16.) 7. Zoom stock has a beta of 1.46.
The risk-free rate of return is 3.07 percent and the market rate of
return is 11.81 percent. What is the amount of the risk premium on
Zoom stock? 8. The risk premium for an individual security is
computed by: 9. The risk-free rate of return is 3.68 percent and the
market risk premium is 7.84 percent. What is the expected rate of
return on a stock with a beta of 1.32? 10. Mullineaux Corporation has
a target capital structure of 70 percent common stock and 30 percent
debt. Its cost of equity is 18 percent, and the cost of debt is 6 percent.
The relevant tax rate is 30 percent. What is the company’s WACC?
(Do not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.) Question 10 Set 2
Central Systems, Inc. desires a weighted average cost of capital of 9
percent. The firm has an after-tax cost of debt of 5 percent and a cost
of equity of 12 percent. What debt-equity ratio is needed for the firm
to achieve its targeted weighted average cost of capital? 11.Miller
Manufacturing has a target debt–equity ratio of .55. Its cost of equity
is 14 percent, and its cost of debt is 9 percent. If the tax rate is 40
percent, what is the company’s WACC? (Do not round intermediate
calculations and enter your answer as a percent rounded to 2 decimal
places, 12.Filer Manufacturing has 4 million shares of common stock
outstanding. The current share price is $76, and the book value per
share is $5. The company also has two bond issues outstanding. The
first bond issue has a face value $90 million, a coupon of 5 percent,
and sells for 94 percent of par. The second issue has a face value of
$70 million, a coupon of 6 percent, and sells for 104 percent of par.
The first issue matures in 20 years, the second in 3 years. a. What
are the company's capital structure weights on a book value basis?
(Do not round intermediate calculations and round your answers to 4
decimal places, e.g., 32.1616.) b. What are the company's capital
structure weights on a market value basis? (Do not round intermediate
calculations and round your answers to 4 decimal places, e.g.,