The manager of Sensible Essentials conducted an excellent seminar explaining debt and equity financing and how firms should analyze their cost of capital.

profilePokes1587

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: 

  1. 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)?
  2. 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.

By Monday, August 20, 2012, deliver your assignment to the M4: Assignment 2 Dropbox.

  

 

 

    • 8 years ago
    • 25
    Answer(16)

    Purchase the answer to view it

    • attachment
      cost_of_equity.docx
    • attachment
      sensible_essential.xls
    • attachment
      cost_of_equity.pptx

    Purchase the answer to view it

    • attachment
      cost_of_capital.pptx

    Purchase the answer to view it

    NOT RATED
    • attachment
      cost_of_equity.docx
    • attachment
      sensible_essential.xls
    • attachment
      cost_of_equity.pptx

    Purchase the answer to view it

    NOT RATED
    • attachment
      cost_of_equity.docx
    • attachment
      cost_of_equity.rar
    • attachment
      sensible_essential.xls

    Purchase the answer to view it

    NOT RATED
    • attachment
      lastnamefirstinitial_m4_a2_0.pptx

    Purchase the answer to view it

    NOT RATED
    • attachment
      cost_of_debt_and_equity.xlsx

    Purchase the answer to view it

    NOT RATED
    • attachment
      cost_of_debt_and_equity.xlsx

    Purchase the answer to view it

    NOT RATED
    • attachment
      cost_of_equity_0.pptx
    • attachment
      _sensible_essential_0.xls
    • attachment
      2013-01-13_113144_cost_of_equity_0.docx

    Purchase the answer to view it

    NOT RATED

      Purchase the answer to view it

      NOT RATED
      • attachment
        cost_of_equity.pptx
      • attachment
        cost_of_equity.xls

      Purchase the answer to view it

      NOT RATED
      • attachment
        b6022_module_4_assignment_2_cost_of_debt_and_equity.pptx

      Purchase the answer to view it

      NOT RATED
      • attachment
        cost_and_debt_equity_sensible_essential.xls
      • attachment
        cost_and_debt_equity.docx
      • attachment
        cost_and_debt_equity.pptx

      Purchase the answer to view it

      NOT RATED
      • attachment
        expected_rate_of_interest.ppt

      Purchase the answer to view it

      NOT RATED
      • attachment
        cost_of_capital_excel_calculation.zip

      Purchase the answer to view it

      NOT RATED
      • attachment
        the_manager_of_sensible_essentials_conducted_an_excellent_seminar_explaining_debt_and_equity_financing_and_how_firms_should_analyze_their_cost_of_capital.pptx

      Purchase the answer to view it

      NOT RATED
      • attachment
        cost_of_debt_and_equity.zip
      Bids(0)
      other Questions(10)