Chapter 10 The Cost of Capital LEARNING OBJECTIVES After reading this chapter‚ students should be able to: • Explain what is meant by a firm’s weighted average cost of capital. • Define and calculate the component costs of debt and preferred stock. • Explain why retained earnings are not free and use three approaches to estimate the component cost of retained earnings. • Briefly explain why the cost of new equity is higher than the cost of retained earnings‚ calculate the
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CASE STUDY ON CASH BUDGETING Party Favours Limited (PFL) distributes party supplies and novelties through a network of independent‚ dedicated sales people across Canada. PFL plans to expand its network of sales distribution network into western Canada and consequently forecasts sales to total $5.6 million and $5.8 million in calendar years 2011 and 2012 respectively. PFL has been in operation for over ten years‚ and therefore has a strong understanding of the seasonal sales cycle that party
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ChAPTER 8 DISCUSSION QUESTIONS 5. Service location decisions tend to focus on the revenue function‚ whereas manufacturing/industrial location decisions tend to focus on costs. The service sector uses techniques such as: Correlation analysis Traffic counts Demographic analysis Purchasing power analysis The industrial decision uses: Transportation method Factor-weighting approach Break-even analysis Crossover charts 8. Factors to consider when choosing a country:
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Project management-Chapter 8 review questions 1. How does resource scheduling tie to project priority? -resource scheduling is directly tied to the project priority‚ because of the amount of available resources. The resources available will automatically go towards the project with the highest priority assigned by the organization’s objectives. 2. How does resource scheduling reduce flexibility in managing projects? -Resource scheduling will reduce the flexibility because the scheduling
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TECA 1303 Answer 12 out of the 15 questions covering chapters 8-15. Each answer is worth 5 points. Only complete sentences‚ which include the question in the answer‚ will be awarded points. Yes or no answers will be awarded zero points. 1. *Which of the three parenting approaches mentioned in the chapter do you prefer and why? How were you raised? How do you think the way you were raised affects you now? Out of the three parenting approach mention in chapter 9 I prefer The Authoritative Approach
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Krystle Johnson 2/17/2013 Chap 8- Segmentation and Targeting Market 1. Describe the specific type of consumer that the Coca-Cola Company is targeting with each of the following products: Diet Coke‚ Coke Zero‚ Diet Coke Plus‚ Coca-Cola Blak‚ and Full Throttle Blue Demon. What types of demographic segmentation is each product’s marketing most likely to include? Diet Coke (Women who want to lose weight)‚ Coke Zero (Men)‚ Diet Coke Plus (young male)‚ Coca-Cola Blak (Older men)‚ Full Throttle
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understanding of Finance function of a corporation and build capacity to apply theory in real world situations. The course will present the ‘Big Picture’ of Corporate Finance so that students understand how things fit together. After successfully completing the course‚ students should be able to take optimal decisions in a corporate setting‚ when working as professionals in the field. COURSE OUTLINE Introduction to Corporate Finance: Financial Management; Corporate Finance; Corporate Finance vs. Financial
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Problem 10.7 Which controls would best mitigate the following threats? a) The hours- worked field in a payroll transaction record contained the value 400 instead of 40. As a result‚ the employee received a paycheck for $6‚257.24 instead of $654.32. Answer: Data entry controls should be implemented of this threat. It can conduct a field check by separating the salaried and hours and minutes of fields. Limit check to ensure that each of the employees should not excess the limit of work
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In search of political and social order Confucius (551-479 B.C.E.) and his school Confucius Educator and political advisor Sayings were compiled in the Analects by his disciples Confucian ideas Fundamentally moral and ethical in character Thoroughly practical: how to restore political and social order Concentrated on formation of junzi--"superior individuals" Edited and compiled the Zhou classics for his disciples to study Key Confucian values Ren--a sense of humanity‚ kindness‚ benevolence
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1. Calculate TRUST’s company after-tax WACC. The risk-free rate was 4.21%‚ the market risk premium was 6% and the company tax rate was 30%. The WACC should be rounded to four decimal places. After-tax WACC = rD (1-Tc) D/V + rE E/V rE = rf + βequity(rm – rf) rE = 0.0421 + 0.81(0.06) rE = 0.0907 E = number of outstanding shares x current share price E = 60 million x $3.43 E = $205.8 million D = $44 million bank loans + $1.2 million short-term hire purchase commitments D = $45.2 million
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