B6022 Week 4 Assignment Help 2 | Discussion Homework Help | Argosy University
- argosy-university / B6022
- 26 Oct 2018
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B6022 Week 4 Assignment Help 2 | Discussion Homework Help | Argosy University
Assignment 2: Cost of Debt
and Equity
The manager of Sensible Essential
Consulting 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 Energy 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
calculations 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.
USA 
India