1. The Saltinero Company is considering two investments (data attached). The firm's cost of capital Is 12% and the risk-free rate is 7%.
A. Compute the NPV of the 2 investments using the firm's cost of capital. Identify the preferred investment.
B. Compute the NPV of the 2 investments using the certainty-equivalent approach. Identify the preferred investment.

4. Use the data for Saltinero Company (above). The beta of Investment A is 1.0, and the beta of B is 1.5. The market risk premium is 6 percent. Compute the NPV of the two investments using the risk-adjusted discount rate approach. Identify the preferred investment.

5. Suppose Firm A's levered beta is 0.75, its D/E ratio is 0.62, and its tax rate is 34 percent. Calculate its unlevered beta.

6. Suppose the 10-year Treasury rate is current 3.54 percent. You analyze your firm's financial ratios and determine that it is most similar to BB-rated firms, which currently have a spread over the 10-year Treasury of 400 basis points. Calculate your firm's cost of debt.

7. Firm B expects to pay a dividend next year of $4 per share and that its dividend will grow at a constant rate of 5 percent indefinitely into the future. Firm B's stock price is currently $25 per share. Use the dividend discount model to calculate the cost of equity.

I need to see intermediate steps and formulas.
Teddy Bear Planet, Inc., is considering the acquisition of Sesame Street Co. The professionals from Goldman Sachs hired by Teddy Bear figured out that under the proposed plan, the IRR for this acquisition project is 15%. Moreover, assume the basic IRR rule applies here. The T-bi

A company currently has a capital structure consisting of 30% debt, and 70% equity. However the company CFO has suggested that the firm increase its debt ratio to 50%. The current risk free rate is 6% and the market risk premium is 5% while the beta is 1.30.
If the firm tax rate is 40%, what would the beta of an all-equity f

Estimate the cost of equity, WACC, and unleveredcost of equity for Wal-Mart, Incorporated (NYSE: WMT).
Find the beta for Wal-Mart and:
1. Estimate Wal-Mart's cost of equity.
2. Estimate Wal-Mart's weighted-average cost of capital (WACC).
3. Estimate Wal-Mart's unleveredcost of equity.

Using 5 years of monthly returns, I have estimated the historical equity beta of a company to be 1. During this span of time, the company's debt structure was stable, with the total debt-to-total asset ratio averaging .40 & the company's tax rate was 46%.
Estimate the historical unlevered beta.

I need to see intermediate steps and formulas.
California Real Estate, Inc. currently is an all-equity firm, the current expected rate of return on the firm's equity is 20%, risk free rate is 5% and the market risk premium is 10%. The firm is considering a capital structure change from zero debt to a debt-to-equity ratio .5,

A firm has a debt-to-equity ration of 1. Its (levered) cost of equity is 16% and its cost of debt is 8%. If there were no taxes, What would be its cost of equity if the debt-to-equity ratio were zero?
A company has a debt to total value ratio of 0.5 . The cost of debt is 8% and that of unleveredequity is 12%. Calculate the

14-4 UNLEVERED BETA
Harley Motors has $ 10 million in assets, which were financed with $ 2 million of debt and $ 8 million in equity. Harley's beta is currently 1.2, and its tax rate is 40%. Use the Hamada equation to find Harley's unleveredbeta, bU.

Currently, Bloom Flowers Inc. has a capital structure consisting of 20 percent debt and 80 percent equity. Bloom's debt currently has 8 percent yield to maturity. The risk free rate is 5 percent and the market risk premium is 6 percent. Using CAPM, Bloom estimates that its cost of equity is currently 12.5 percent. The company ha

The Green Paddle has a cost of equity of 13.73 percent and a pre-tax cost of debt of 7.6 percent. the debt-equity ratio is 0.65 and the tax rate is 32 percent. What is green paddle's unleveredcost of capital?

The Super Muench Cookie Company has a capital structure consisting of 30% debt and 70% equity based on market values. Company's equity beta based on its current level o debt financing is 1.8 and its debt beta is 0.6. Also, the risk free rate of interest is currently 3% on long-term government bonds. The company's pre-tax cost of