corporate finance assigmnet needs to be done on excel

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corporate finance assigmnet needs to be done on excel


Instructions Please complete the following: · Problem P8-18 · Problem P8-28 · Problem P9-5 · Problem P9-15 · Integrative Case 4 - Enviro Plastics Company General Instructions for Assignments Please only submit one Excel file with all problems included. Carry all calculations to TWO decimal places to reduce rounding error, especially in multi-step problems. There are several assigned problems where the solution will require graphing. This will require using the graphing function in Excel. If you submit your answer without an Excel graph points will be deducted. If you submit your answer by drawing a graph even if it is correct, points will be deducted. Remember to show all calculations. You must show your calculation and solution. please see the example below. If you do not show how you arrived at your answers, you will not receive credit. Merely showing the formula without the calculations is not sufficient. The problems should be set up in columns or using other appropriate formats—do not hide all steps in formulas behind one answer. I must still be able to see how you arrived at the answer. · Problem P8-18 Portfolio analysis: You have been given the historical return data shown in the first table on three assets F, G and H, over the period 2019-2022 Using these assets, you have isolated the three investment alternatives shown in the following table. a. Calculate the average return over the four-year period for each of the three alternatives. b. Calculate the standard deviation of returns over the four-year period for each of the three alternatives. c. Use your findings in parts a and b to calculate the coefficient of variation of each of the three alternatives. d. On the basis of your findings, which of the three investment alternatives do you think performed better over the period? Why? · Problem P8-28 Betas and risk ranking: You are considering three stocks A,B, and C, for possible inclusion in your investment portfolio. Stock A has a beta of 0.80, stock B has a beta of 1.40, and stock C has a beta of -0.30 a. Rank these stocks from the most risky to the least risky. b. If the return on the market portfolio increased by 12%, what change would you expect in the return for each stock? c. If the return on the market portfolio decreased by 5%, what change would you expect in the return for each stock? d. If you believe that the stock market was getting ready to experience a significant decline, which stock would you probably add to your portfolio? Why? e. If you anticipated a major stock market rally, which stock would you add to your portfolio? why? · Problem P9-5 After-tax cost of debt: For each of the following $1,000 -par-value bonds, assuming annual interest payment and a 21% tax rate, calculate the after-tax cost of debt. · Problem P9-15 WACC: Market value weights: The market values and after-tax costs of various sources of capital used by Ridge Tool are shown in the following table. a. Calculate the firms WACC b. Explain how the firm can use this cost in the investment decision-making process. · Integrative Case 4 - Enviro Plastics Company See case details below, please a. Calculate Enviro’s current after-tax cost of long-term debt. b. Calculate Enviro’s current cost of preferred stock c. Calculate Enviro’s current cost of common stock. d. Calculate Enviro’s current weighted average cost capital (WACC). e. (1) Assuming that the cost of debt financing does not change, what effect would a shift to a more highly leveraged capital structure consisting of 50% long-term debt, 0% preferred stock, and 50% common stock have on the risk premium for Enviro’s common stock? (2) What would be Enviro’s new cost of common equity? (3) What would be Enviro’s new weighted average cost of capital (WACC) ? (4) Which capital structure—the original one or this one—seems better? Why?
Answered 2 days AfterFeb 05, 2024

Answer To: corporate finance assigmnet needs to be done on excel

Prince answered on Feb 07 2024
23 Votes
P8-18
    Return
    Year    Asset F    Asset G    Asset H
    2019    16%    17%    14%
    2020    17%    16%    15%
    2021    18%    15%    16%
    2022    19%    14%    17%
    Alternative 1: 100% Asset F
    a. Re
turn    17.5%
    b. Stanadard Deviation    1.12%
    c. Coefficient of variation     6.39%
    Alternative 2: 50% Asset F and 50% Asset G
    a. Return    16.5%
    b. Stanadard Deviation    1.50%
    c. Coefficient of variation     9.09%
    Alternative 3: 50% Asset F and 50% Asset H
    a. Return    16.50%
    b. Stanadard Deviation    1.50%
    c. Coefficient of variation     9.09%
    D. Alternative 1, comprising 100% Asset F, outperformed the other investment alternatives over the period. With a return of 17.5%, it demonstrated the highest yield, coupled with the lowest standard deviation (1.12%) and coefficient of variation (6.39%). These metrics collectively indicate a superior risk-adjusted return compared to Alternatives 2 and 3. While Alternatives 2 and 3 diversified by combining Asset F with other assets, the pure allocation to Asset F in Alternative 1 proved to be the most favorable choice, showcasing higher returns and lower volatility. Investors seeking a balance between risk and return would find Alternative 1 more appealing based on these performance metrics.
P8-28
    Part A.
    Stock    Beta    Rank
    A    0.8    Second Most Risky
    B    1.4    Most Risky
    C    -0.3    Least Risky
    Part B.
    Stock    Beta    % Change in Market Return    % Change in Stock Return    Remarks
    A    0.8    12%    9.60%    Increase in Stock Return
    B    1.4    12%    16.80%    Increase in Stock Return
    C    -0.3    12%    -3.60%    Decrease in Stock Return
    Part C.
    Stock    Beta    % Change in Market Return    % Change in Stock...
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