Chapter 15Problems 4,10,23

Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in green

Chapter 15Question 4

Input Area:

Dividend per shareStock priceDividends:Year 1Year 2Year 3Year 4

Output Area:

Arithmetic average:

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!g #DIV/0!

#DIV/0!

Geometric average:Geometric growth 10.00%

#DIV/0!

g1

g2

g3

g4

RE

RE

Chapter 15Question 10

Input Area:

Debt-to-equity ratioCost of equityCost of debtTax rate

Output Area:

WACC 0.00%

Chapter 15Question 23

Input Area:

Land priceLand appraisalPlant cost

DebtBonds outstandingSettlement dateMaturity dateAnnual coupon rateCoupons per yearFace value (% of par)Bond price (% of par)

Common stock Shares outstandingBetaShare price

Preferred stock outstandingShares outstandingCoupon rateShare price

MarketMarket risk premiumRisk-free rate

Equity floatation costPreferred floatation costDebt floatation costTax rateNet working capitalDoes the NWC requirefloatation costs (Yes/No)

b. Adjustment factorc. Life of plant (years)

Life of project (years)Plant salvage value

d. Annual fixed costsVariable costs per RDS# RDS manufacturedSale price per RDS

Output Area:

Market value of debt $ - Market value of equity $ - Market value of preferred $ - Market value of firm $ -

D/V #DIV/0!E/V #DIV/0!P/V #DIV/0!

a. Floatation costs #DIV/0!The cost of the land 3 years ago is a sunk cost and is irrelevant.Land $ - Plant (including floatation) #DIV/0!Net working capital #DIV/0!

$ (27,614,329)

b. Pretax cost of debt Err:502Aftertax cost of debt Err:502Cost of equity 0.00%Cost of preferred #DIV/0!WACC #DIV/0!

Discount rate for project #DIV/0!

c. Book value in year 5 #DIV/0!Aftertax salvage value #DIV/0!

d. Sales $ - Variable costs $ - Fixed costs $ - Depreciation #DIV/0!EBIT #DIV/0!Taxes #DIV/0!Net income #DIV/0!Depreciation #DIV/0!Operating cash flow #DIV/0!

e. Accounting breakeven #DIV/0!

f. Year Cash Flow 0 $ (27,614,329)1 #DIV/0!2 #DIV/0!3 #DIV/0!4 #DIV/0!5 #DIV/0!

IRR #DIV/0!

NPV #DIV/0!