When using the free-cash flow model, cash flows are discounted at the weighted average cost of capital (WACC) and when using the dividend discount model, dividends are discounted at….
What Is the Required Rate of Return on an Investment?
You should now be ready to do Assignment 4. For information about preparing and submitting your assignments, see the “Assessments” section of the Course Guide. After you complete this assignment, submit it to your Open Learning Faculty Member and begin working on the next module. If you have any questions regarding your assignment, contact your Open Learning Faculty Member.
This assignment is marked out of 100 and is worth 7% of your course grade. Remember to show your work.
Complete Chapter 11, Problem 6. (10 marks)
Complete Chapter 11, Problem 7. (10 marks)
Complete Chapter 11, Problem 13. (10 marks)
Your answer should indicate:
The aftertax cost of debt, and:
The aftertax cost of preferred stock. Your formula needs to include flotation costs.
State if the treasurer is correct.
Complete Chapter 11, Problem 22. (20 marks)
Complete Chapter 11, Problem 28. (40 marks)
Complete Chapter 11 Appendix A, Problem 3. This problem uses the capital asset pricing model, and is on page 384. (10 marks)
The following textbook is required for this course:
Block, S. B., Hirt, G. A., Danielsen, B, R., Short, J. D., & Perretta, M. A. (2015). Foundations of financial management (10th Canadian ed.). Toronto, ON: McGraw-Hill Ryerson.