Sources of Capital Assignment | Homework For You

Mannheim’s common stock is currently selling for $45 per share. Its last dividend payment was $3.25, and dividend is expected to grow at a constant rate of 3% in the foreseeable future. Mannheim’s beta is 1.2, the risk free rate is 6%, and the market risk premium is estimated to be 4%. For the bond-yield-plus-risk-premium approach, the firm uses a risk premium of 4% with the yield on the Treasury bond of 6.5%.Homework For You

Don't use plagiarized sources. Get Your Assignment on
Sources of Capital Assignment | Homework For You
Just from $13/Page
Order Now

Sharron, a finance manager of Mannheim, has $400 million capital available consisting of $160 million debt, $140 preferred stock, and $100 million common stock.

Albert asked Stevenson to prepare a report answering the following questions:

  1. What are the sources of capital to be included when estimating the Mannheim’s WACC? In calculating the WACC, if he had to use book values for either debt or equity, which would he choose? Why?
  2. What is the cost of debt after tax?
  3. What is the firm’s cost of preferred stock?
  4. Explain why there is a cost of retained earnings?
  5. What is Mannheim’s estimated cost of common equity using the CAPM approach
  6. What is the estimated cost of common equity using the DCF approach?
  7. What is the bond-yield-plus-risk-premium estimate for Mannheim’s cost of common equity?
  8. What is your final estimate for rs or the average required rate of return?
  9. Explain in words why new common stock has a higher cost than retained earnings
  10. Mannheim estimates that if it issues new common stock, the flotation cost will be 20%. Mannheim incorporates the flotation costs into the DCF approach. What is the estimated cost of newly issued common stock, considering the flotation cost?
  11. What is Mannheim’s overall, or weighted average, cost of capital (WACC)? Ignore flotation costs.
  12. What are the factors affecting Mannheim’s composite WACC?
  13. Calculate the Net Present Value (NPV), Discounted Payback Period (DPP) and Modified Internal Rate of Return (MIRR) for Project A, B, and C.
  14. Mannheim Biotechnology Limited has $400 million capital available. Since the projects above are independent, which project should the company invest?
  15. If Mannheim had 14% cost of equity, 6% preferred shares and 8% debt, Stevenson proposed a target capital structure of 60% equity, 5% preferred shares, and 35% debt. Explain why he doesn’t use more preferred shares since it costs less than debt.Get Finance homework help today

Calculate your paper price
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

At Myhomeworkwriters.com, we always aim at 100% customer satisfaction. As such, we never compromise o the quality of our homework services. Our homework helpers ensure that they craft each paper carefully to match the requirements of the instruction form.

Professional Academic Writers

With Myhomeworkwriters.com, every student is guaranteed high-quality, professionally written papers. We ensure that we hire individuals with high academic qualifications who can maintain our quality policy. These writers undergo further training to sharpen their writing skills, making them more competent in writing academic papers.

Affordable Prices

Our company maintains a fair pricing system for all academic writing services to ensure affordability. Our pricing system generates quotations based on the properties of individual papers.

On-Time delivery

My Homework Writers guarantees all students of swift delivery of papers. We understand that time is an essential factor in the academic world. Therefore, we ensure that we deliver the paper on or before the agreed date to give students ample time for reviewing.

100% Originality

Myhomeworkwriters.com maintains a zero-plagiarism policy in all papers. As such, My Homework Writers professional academic writers ensure that they use the students’ instructions to deliver plagiarism-free papers. We are very keen on avoiding any chance of similarities with previous papers.

Customer Support 24/7

Our customer support works around the clock to provide students with assistance or guidance at any time of the day. Students can always communicate with us through our live chat system or our email and receive instant responses. Feel free to contact us via the Chat window or support email: support@myhomeworkwriters.com.

Try it now!

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Samples

Our writers complete papers strictly according to your instructions and needs, no matter what university, college, or high school you study in.

Categories
All samples
Analysis (any type)
Argumentative essays
Dissertation/Dissertation chapter
Analysis (any type)
Advantages and disadvantages of lowering the voting age to thirteen
Undergrad. (yrs 1-2)
Political science
4
View this sample
Argumentative essays
Is euthanasia ethical or not?
Undergrad. (yrs 3-4)
Nursing
3
View this sample
Dissertation/Dissertation chapter
Videoconferencing as a teaching tool
Undergrad. (yrs 3-4)
Education
10
View this sample

Our Homework Writing Services

My Homework Writers holds a reputation for being a platform that provides high-quality homework writing services. All you need to do is provide us with all the necessary requirements of the paper and wait for quality results.

Essays

Essay Writing Services

At My Homework Writers, we have highly qualified academic gurus who will offer great assistance towards completing your essays. Our homework writing service providers are well-versed with all the aspects of developing high-quality and relevant essays.

Admissions

Admission and Business Papers

With Myhomeworkwriters.com, we will help you secure a position at your desired institution. Our essay writing services include the crafting of admissions papers. We will still help you climb your career ladder by helping you write the official papers that will help you secure a job. We will guide you on how to write an outstanding portfolio or resume.

Editing

Editing and Proofreading

Myhomeworkwriters.com has a professional editorial team that will help you organize your paper, paraphrase it, and eliminate any possible mistakes. Also, we will help you check on plagiarism to ensure that your final paper posses quality and originality.

Coursework

Technical papers

My Homework Writers harbors professional academic writers from diverse academic disciplines. As such, we can develop homework writing services in all academic areas. The simplicity or complexity of the paper does not affect the quality of homework writing services.

Sitemap: https://myhomeworkwriters.com/sitemaps/sitemap.xml User-agent: * Allow: / User-agent: AhrefsBot Crawl-Delay: 1 User-agent: SemrushBot Crawl-Delay: 1