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Question Description

I am currently in a graduate corporate finance master's course program and since finance is not a strong mathematics concept for me, was needing help for an upcoming project assignment consisting of both a word document summary explanation of how companies make financial decisions based on answers that are calculated out on an Excel spreadsheet, to which I would greatly appreciate based on the following information posted below, detailing and showing step-by-step excel calculations steps on how you obtain the following financial information. Also, No Plagiarism since document will be checked and has to include proper APA citations for any financial and statistical data talked about and if not documented, will be considered plagiarism and will get points deducted off if not citing all "financial and statistical data information used" per instructor request. Here are the details for the following assignment:

Purpose of Assignment

The purpose of this assignment is to allow the student an opportunity to calculate the rate of return of equity and debt instruments. It allows the student to understand the effects of dividends; capital gains; inflation rates; and how the nominal rate of return affects valuation and pricing. The assignment also allows the student to apply concepts related to CAPM, WACC, and Flotation Costs to understand the influence of debt and equity on the company's capital structure.

Assignment Steps

Resources: Corporate Finance

Calculate the following problems and provide an overall summary of how companies make financial decisions of 700 words or more, based on your answers (from Excel spreadsheet calculations; please show step-by-step calculations for each financial problem to help with better understanding of the material when explained on word document summary report):

  1. Introduction
  2. Stock Valuation: A stock has an initial price of $100 per share, paid a dividend of $2.00 per share during the year, and had an ending share price of $125. Compute the percentage total return, capital gains yield, and dividend yield (Compute on Excel and explain on Word Document).
  3. Total Return: You bought a share of 4% preferred stock for $100 last year. The market price for your stock is now $120. What was your total return for last year? (Compute on Excel and explain on Word Document).
  4. CAPM: A stock has a beta of 1.20, the expected market rate of return is 12%, and a risk-free rate of 5 percent. What is the expected rate of return of the stock? (Compute on Excel and explain on Word Document).
  5. WACC: The Corporation has a targeted capital structure of 80% common stock and 20% debt. The cost of equity is 12% and the cost of debt is 7%. The tax rate is 30%. What is the company's weighted average cost of capital (WACC)? (Compute on Excel and explain on Word Document).
  6. Flotation Costs: Medina Corp. has a debt-equity ratio of .75. The company is considering a new plant that will cost $125 million to build. When the company issues new equity, it incurs a flotation cost of 10%. The flotation cost on new debt is 4%. What is the initial cost of the plant if the company raises all equity externally? (Compute on Excel and explain on Word Document).
  7. Conclusion
  8. References-APA format and include "direct web links used" to cite information.

Submit your summary and all calculations. (Excel Calculations & Word Document Summary).

No Plagiarism and will be checked.

Use APA format for references and citations. Include “direct web links” for references and citations used.

Most importantly per instructor request, use proper APA citations for any “financial and statistical data” discussed within the word document summary since it would be considered plagiarism and will get points deducted off if not cited for all financial and statistical data information used.

Click the Assignment Files tab to submit your assignment.

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