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    Finance:Cost of capital, Capital budgeting and Bonds.

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    I need step by step calculations using EXCEL functions showing how these 7 problems would be solved. The answers to each problem is at the end of the attachment.

    Please use EXCEL functions/formulas to show how each problem can be solved and a brief explanation of what the answers mean. That will help me to greatly understand.

    Thanks!

    © BrainMass Inc. brainmass.com June 4, 2020, 12:41 am ad1c9bdddf
    https://brainmass.com/business/bond-valuation/finance-cost-capital-capital-budgeting-bonds-353797

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    9 - 13
    Market price 39
    Growth rate 4%
    Dividend 1.5
    Cost of retained earnings 7.85% =(1.5 + (4% * 39))/39

    9 - 16
    Risk-free rate 3%
    Market return 11%
    Beta 1.6
    Cost of equity 15.8% =3% + (1.6 * (11% - 3%))

    9 - 19
    Weight Flotation cost Selling price Dividend Growth rate After-tax Cost
    Debt 50% 6.60% 3.3%
    Preferred stock 17% 0.75 26 2 13% 7.9% 1.3%
    Common equity 33% 4.00 143 7 13% 18.0% 6.0%
    Total 1.00 WACC 10.632%

    10 - 11
    a.
    Cal Aron
    Cash flows Cash flows
    Year Outflow Inflow Outstanding balance Year Outflow Inflow Outstanding balance
    0 -2,000 -2,000 0 -2,500 -2,500
    1 900 -1,100 1 1,500 -1,000
    2 1100 0 2 1,300 300
    3 1300 1,300 3 800 1,100
    Payback period 2 Years. Payback period 1 Year, 9 months

    b.
    Cash ...

    Solution Summary

    The problem set deals with determining share value, cost of equity, internal rate of return, net present value etc with provided information.

    $2.19

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