Calculatethe following problems andprovidean overall summary of how companies make financial decisions in no more than 700 words, based on your answers

how businesses make financial decisions

Give an overview of how businesses make financial decisions in no more than 700 words based on your calculations of the following issues:

Stock valuation: A stock started the year at $100 per share, paid a dividend of $2 per share during the course of the year, and ended the year at $125 per share. Calculate the dividend yield, capital gains yield, and overall return percentage.
Total Return: Last year, you paid $100 for a share of 4% preferred stock. Your stock currently trades for $120 on the market. What was your overall profit the previous year?
According to the CAPM model, a stock has a beta of 1.20, a projected market return of 12%, and a risk-free rate of 5%. What is the anticipated stock return rate?
80% common stock and 20% debt make up the corporation’s intended capital structure, according to WACC. Equity costs 12%, while debt costs only 7%. 30% is the tax rate. What is the weighted average cost of capital (WACC) for the company?
Costs of Flotation: Medina Corp.’s debt-to-equity ratio is 0.75. The corporation is thinking about investing $125 million in a new factory. The cost of flotation for the company’s fresh equity offerings is 10%. On new debt, the flotation cost is 4%. If the business raises all of its stock from outside sources, what is the plant’s startup cost?

 

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