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

  • Field: Business & Finance
  • Posted5 years ago
  • Due
  • Budget:  $25
Report Issue

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.

  

 

 

    Answers 12
    Assignment Expert
    profile
    Rated 294 times
    This answer :

    Purchase the answer to view it

    blurred-text
    Smart Study
    profile
    Rated 412 times
    This answer :

    Purchase the answer to view it

    blurred-text
    Sleek Solutions
    profile
    Rated 345 times
    This answer :

    Purchase the answer to view it

    blurred-text
    Engineer Maxwell
    profile
    Rated 256 times
    This answer :

    Purchase the answer to view it

    blurred-text
    Smart Tutor
    profile
    Rated 56 times
    This answer :

    Purchase the answer to view it

    blurred-text
    Awesome Work
    profile
    Rated 3 times
    This answer :

    Purchase the answer to view it

    blurred-text
    xstria
    profile
    Rated 86 times
    This answer :

    Purchase the answer to view it

    blurred-text
    PROF Kay
    profile
    Rated 24 times
    This answer :

    Purchase the answer to view it

    blurred-text
    Kumail Raza
    profile
    Rated 8 times
    This answer :

    Purchase the answer to view it

    blurred-text