Assignment 2: Cost of Debt and Equity

Assignment 2: Cost of Debt and Equity The manager of Sensible Essentials conducted an excellent seminar explaining debt and equity financing and how firms should analyze their cost of capital. Nevertheless, the guidelines failed to fully demonstrate the essence of the cost of debt and equity, which is the required rate of return expected by suppliers of funds. You are the Genesis accountant and have taken a class recently in financing. You agree to prepare a PowerPoint presentation of approximately 6–8 minutes using the examples and information below: Debt: Jones Industries borrows $600,000 for 10 years with an annual payment of $100,000. What is the expected interest rate (cost of debt)? Internal common stock: Jones Industries has a beta of 1.39. The risk-free rate as measured by the rate on short-term US Treasury bill is 3 percent, and the expected return on the overall market is 12 percent. Determine the expected rate of return on Jones’s stock (cost of equity). Here are the details: Jones Total Assets $2,000,000 Long- & short-term debt $600,000 Common internal stock equity $400,000 New common stock equity $1,000,000 Total liabilities & equity $2,000,000 Develop a 10–12-slide presentation in PowerPoint format. Perform your calculations in an Excel spreadsheet. Cut and paste the calculation into your presentation. Include speaker’s notes to explain each point in detail. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M4_A2.ppt.

Answers

Related Questions

Perceptual Bias and Judgmental Bias: America in Ir...

Perceptual Bias and Judgmental Bias: America in Iraq How did perceptual bias and judgmental bias influence President Bush’s decision to lead America...

Employment Discrimination Laws...

Employment Discrimination Laws Employment Discrimination LawsDevelop a hypothetical/write a STORY that involves an employer breaking an anti-discrimin...

Employment Discriminatin – Article Review...

Employment Discriminatin – Article Review For this discussion, go onto the web (Google News works for this). Find an article about employment discr...

Basic Legal Steps...

Basic Legal Steps You purchase an electronic item and it does not fulfill the promises that the company advertised. In addition, this electronic item...

Freedom of Speech...

Freedom of Speech Freedom of the speech means I have the right to speak my mind anywhere any time. Discuss.Please be specific and cite any reference...

Accounts Payable...

Accounts Payable Tyler Co. has a contract with its president to pay her a 5% bonus for 2004 and 2005. The federal income tax rate is 30% during thes...

Three Legal Questions...

Three Legal Questions I need help to answer these questions.Q#1 Pete’s Pizza employs Quincy as a delivery driver. Pete’s guarantees that an order...

What do check and balances mean, and how do they f...

What do check and balances mean, and how do they function? 1)What do check and balances mean, and how do they function?2)What areas of the Constitutio...

Life insurance contract from terminally ill client...

Life insurance contract from terminally ill client P3-46. The viatical industry offers a rather grim example of present value concepts. A firm in this...

Legal Interview Questions...

Legal Interview Questions Legal Interview QuestionsState each question in column below as Legal Question / Illegal Quest...

Life insurance contract from a terminally ill clie...

Life insurance contract from a terminally ill client P3-46. The viatical industry offers a rather grim example of present value concepts. A firm in th...

At Will Employment...

At Will Employment You work for me in my law office in Kitsap County, Washington which is in an “employment at will state.” Your work has been e...

The Securities Act of 1933...

The Securities Act of 1933 1.What are the features of the securities act of 1933? 2.What lead to its passage? 3. Why is it referred to as the “truth...

Title VII and Affirmative Action...

Title VII and Affirmative Action Describe the elements of Affirmative Action as it applies to public sector and private sector employers, and how it i...

Impact of Deinstitutionalization...

Impact of Deinstitutionalization Find at least one article from the internet that demonstrates the impact of deinstitutionalization on local communiti...

Collect Sports...

Collect Sports Can you please help me with the attached case study? This was due last week and I got almost all of the questions wrong or marked as in...

Help! This is confusing....

Help! This is confusing. The concept of intellectual property rights has become big business in our informational or computer age. With regard to pat...

Law and Ethics as a source of personal ground rule...

Law and Ethics as a source of personal ground rules Ground rules have been discussed in relation to ethics and morals and the lives we lead. From the...

Affirmative Action programs...

Affirmative Action programs Please be very cognizant of an open minded and fair tone in this question, and demonstrate the sensitivity to diversity th...

Affirmative Action – Employers Who Are Subject...

Affirmative Action – Employers Who Are Subject Which employers are subject to affirmative action plans,what are the requirements of the employers an...

Orlow Co. pays $12,000 to Pizner Insurance Co....

Orlow Co. pays $12,000 to Pizner Insurance Co. BE3-5 On July 1, 2006, Orlow Co. pays $12,000 to Pizner Insurance Co. for a 3-year insurance contract....

Bid price for the contract...

Bid price for the contract Your company has been approached to bid on a contract to sell 15,000 voice recognition (VR) computer keyboards a year for f...

Hiring Attorney for In-House Legal Department...

Hiring Attorney for In-House Legal Department As the President of your corporation you now need to hire an attorney to serve as General Counsel and he...

Human Rights and Mission Statements...

Human Rights and Mission Statements Written Assignment: 1. Write a 250 word explication (Essay 1) of how you believe places of employment might...

If you didn't find the right answer

Ask Your Questions, We'll notify you once someone answers it