capella MBA6016 Unit 4 Assignment 1

Unit 4 Textbook Problems

Apply the theories, models, and practices of finance to the financial management of the firm.This assignment helps you develop the skills to master the following course competency:

To review how all your activities help you achieve the competencies in the course, and ultimately, your overall program outcomes, revisit the MBA6016 Course Alignment Map.

Activity Instruction

To enhance your understanding of financial concepts, please complete the following problems in your Corporate Finance textbook.

Chapter 10, problem 1 (page 310).

Chapter 10, problem 12 (page 311).

Chapter 10, problem 14 (page 311).

Chapter 10, problem 15 (page 311).

Chapter 11, problem 2 (page 348).

Chapter 11, problem 12 (page 350).

Chapter 12, problem 1 (page 384).

Chapter 12, problem 5 (page 384).

Assignment Submission

You are required to use the textbook problems template in the Resources to complete the problems. This Excel document contains unique details and cells specific to the problems that you must use to derive your solutions. Where numeric solutions are expected, provide full detail of the process used to reach the solution using Excel. Where analysis is expected, use information from the textbook to inform your analysis, not replace it, incorporating creativity, critical thinking, and real-life perspectives. Cite all resource materials used in your analysis, using proper APA format.

A thorough, professional presentation of your analysis and results is an important consideration. Enhance your presentation skills by using applicable tools such as tables, graphs, diagrams, and commentary as appropriate in all assignments in this course.

UNIT 4: TEXTBOOK PROBLEMS

CHAPTER 10: PROBLEM 1

Beginning Stock Price $73

Ending Stock Price $82

Dividend $1.20

Percentage Total Return =

CHAPTER 10: PROBLEM 12

Stock Return the past 5 years -18.35%

Holding Period Return for the Stock =

CHAPTER 10: PROBLEM 14

Price of Preferred Stock Last Year $94.83

Current Price of Preferred Stock $96.20

Preferred Stock Dividend 4.20%

Face Value of Preferred Stock $100

Total Return =

CHAPTER 10: PROBLEM 15

Stock Price 3 Months Ago $41.75

Current Stock Price $44.07

First calculate the total return for the 3 months

Then calculate the APR by multiplying the answer in cell B50 by 4

EAR (Effective Annual Rate) =

CHAPTER 11: PROBLEM 2

Stock A $3,900

Stock B $5,700

Total Value of the Portfolio $9,600

Expected Return on Stock A 9.50%

Expected Return on Stock B 15.20%

Expected Return on the Portfolio =

CHAPTER 11: PROBLEM 12

Beta 0.85

Expected Return on the Market 11.50%

Risk-Free Rate 3.40%

Expected Return on the Stock =

CHAPTER 12: PROBLEM 1

Beta 1.21

Risk-Free Rate 3.50%

Expected Return on the Market 11%

Cost of Equity =

CHAPTER 12: PROBLEM 5

Common Stock weight 70%

Debt weight 30%

Cost of Equity 13%

Cost of Debt 6%

Tax Rate 35%