Feeling stuck?

Ask us to find you a qualified specialist in your field

hybrid equity financing

hybrid equity financing. 1. Sometimes preferred stock is referred to as “hybrid equity financing.” Identify and explain the features of preferred stock that give it the designation of “hybrid equity financing.”  (4 marks)

2.  What are the advantages and disadvantages of using the DCF model for determining the cost equity capital.

3.  Define the term ‘investment risk’. And give an example of a risk-free investment and a risky investment. Explain why an investment might be risk free and another is very risky.  (2 marks)

4.  What is meant by the diversification? And what benefits can be derived from diversification?

5.  The Metrics electronic Company is considering a three-year project to market a device that measure the number of calories used up by athletes based on a new technology. A market study indicates a 60% probability that demand will be good and a 40% chance that it will be poor. It will cost $5M to bring the new device to market. Cash flow estimates indicate inflows of $3M per year for three years at full manufacturing capacity if demand is good, but just $1.5M per year if it’s poor. The firm’s cost of capital is 10%.

(I)   Analyze the project by developing a decision tree for the project then calculate the projects expected NPV.

(ii)  Should the project be accepted or abandoned?

(iii)  What are real options in capital budgeting? Give two examples of the type of options available in capital budgeting.

(iv)  Why is the application of real options in capital budgeting is considered to be more effective than just only applying NPV to capital projects?

6.  You are an Investment Manager at Pegasus Securities and you are preparing for the next meeting of the investment committee. The committee requested you to assess the capital structure of Industrial Production Ltd a manufacturer of industrial products. The following information is available about the company in assisting you in making your assessment.

(A)  Cost of Equity – Suppose stock in Industrial Production Ltd has a beta of .80. The return on the market 12% percent, and the risk-free rate is 6 percent the firm’s last dividend was $1.20 per share, and the dividend is expected to grow at 8 percent indefinitely. The stock currently sells for $45 per share.

Determine the firm’s cost of equity capital using the:

i. SML approach

ii. Dividend growth model

(B)   Calculating the WACC

In addition to the information given in (b) above, suppose Industrial Production ltd has a target debt-equity ratio of 50 percent. Its cost of debt is 9 percent, before taxes. If the tax rate is 35 percent.

Determine the company weighted average cost of capital (WACC)

(C)  Flotation Costs

Suppose Industrial Production Ltd is seeking $30 million for a new project. The necessary funds will have to be raised externally. The firm’s flotation costs for selling debt and equity are 2 percent and 16 percent, respectively.

i. If flotation costs are considered, what is the true cost of the new project?

ii. If Industrial Production Ltd stock currently sells for $50 per share, and the dividend per share will probably be about $5. A shareholder argues, “It will cost the firm $5 per share to use the stockholders’ money this year, so the cost of equity is equal to 10 percent ($5/50).”

What is wrong with this conclusion?

hybrid equity financing

Get a Quick Quote

Approximately 250 words
Total price (USD) $: 10.99

Not yet sure about it?

See How it Works

Testimonials

WRITING HELP

Discover what people say about our previously completed projects.

James Wells

I’ve been using this website for over a year now. Quality work and on time. Thank you

Jack Ribas

I got an A on my finals. I will use again. Thank you

Samson Phil

Writer 132 did a pretty good job, finished the assignment on time. Average sized paragraphs.

Irvin Madison

Very communicative and understand your position

Kevion Fischer

Answered quickly, professional, and very communicative

Stacey Kent

I ordered my first paper and from the review, writer covered and discussed all the required elements well. Thank you

Jane Clarke

Perfect essay, all questions answered. Fast delivery of paper.

Frequently Asked Questions

Who writes my Essay?
We have qualified writers who are not only talented in writing papers but also have requisite knowledge in specific area of study. Further, our writers are mentored in writing & their work scrutinized for syntax error and plagiarism by our editing team
How long should I wait to get my paper?
We deliver your order within the deadline given. You will have an opportunity to evaluate the paper and request for revision
What if I am not satisfied with my paper?
Many reasons can result to this from writers missing some key points or information not provided in great detail. However, we always try to make revisions for any orders that have issues. Thus, if unsatisfied, you may request for a refund or credit for a free assignment to cover up
Is your payment secure?
Our payment is secure and you d not need to worry about your data when using our website.
Can I chat with writer?
Yes, our system allows you to message writer directly for clarification. However, we discourage sharing contact with writers since we are able to supervise every step they do on your order and make sure everything is fine

Benefits of Working with Our Writers

Z

Highly Qualified Writers

Our writers have knowledge even on complex disciplines

l

Specialization

Every writer writes a maximum of 3 special subjects such as, statistics, finance & economics

k

Top-Notch writing skills

Our writers are constantly mentored and reviewed for their skills. We hire the best writers who posses requisite knowledge and writing skills

Quality Control

Our writers have access to databases with recent research and publications for use. Further, we grad our writers access to grammar & plagiarism checks. Additionally, our editing team proofreads every paper before submission

Orders Completed

%

Client Payback

Active Writers

Editing Team

Advantages of our custom writing services

l

Custom papers written from scratch

All custom papers are prepared by qualified writers according to your instructions and, therefore, exclude any chance of plagiarism. We have a large staff of academic writers, including native speakers from the USA, the UK, Canada, and Australia. Thus, Homeoftutors.com can quickly find the most suitable one for your specific order.

}

EXTRA FAST DELIVERY FOR URGENT ORDERS

The deadline is close and you still have no idea how to write your essay, research, or article review? With us, you can get a well-researched and professionally prepared paper overnight or even within 8 hours if you are pressed for time

i

No pre-written essays

We complete all assignments from scratch, which are not connected to any essay databases. This means we do not resell any paper. In addition, before sending your paper to you, we check it for plagiarism to make sure it has no copy-pasted parts.

b

QUALITY WRITING HELP IN ANY FORMAT

Have difficulties with citing sources? Our writers are an old hand at proper referencing and can easily cope with MLA / APA / Harvard / Chicago / Turabian or any other formatting style.

How it Works

1. Making an Order Tip and Tricks

  • Choose the type of assignment, topic, subject, length, and deadline for your paper.
  • Indicate the following order parameters: service, chosen writer level, number of cited sources, and citation style.
  • Add your document or provide instructions for paper in a specific form.
Image showing step 1 of making an order
Image showing how to make payment for your order

2. Tips and Tricks for Choosing the Right Writer

  • Log in using your email address or your Facebook account.
  • A list of suitable writers will be offered to you. Before making a selection, you can read testimonials or engage in a Live Chat with authors.
  • Check your balance and, if necessary, add funds to your account. Here you will also find exclusive bargains.
  • Put money into the account of the chosen writer.

3. Tips and Tricks for Supervising the Writing Process

  • Get the chance to keep track of the process and connect with your writer.
  • If required, include updated instructions.
  • Have a conversation with your author.
Image showing how to supervise writing process
Image showing how to download your completed results

4. Tips and Tricks to Enjoy the Results

  • You will receive the paper. You have the option of requesting modifications if they are required. Before giving it back to the writer, make a list of the adjustments that need to be made.
  • Accept the paper and send the money to the author.
  • Rate your writer, submit your request, then sit back and enjoy the results.

Feeling stuck?

Ask us to find you a qualified specialist in your field.