You have been asked to review the cost of capital computation for Lemur Inc., a small retail company. The company currently has 100 million shares trading at $10 a share, no conventional debt. However, the firm has two lease commitments: (1) a lease commitment of $25 million a year for the next 10 years and (2) another lease commitment of $20 million a year for the following 6 years. If the cost of equity of the firm is 10%, the pre-tax cost of debt for the firm is 6% and the marginal tax rate is 40%, estimate the cost of capital. What is the reason for trying to estimate the capitalised value of the lease commitment when estimating the leverage ratio

Dan wants to start a supermarket in his hometown, and wants to get into the business only after finding out about the market and how successful his business might be. the best way for dan to gain knowledge is to:

Data for hermann corporation are shown below: per unit percent of sales selling price $ 125 100 % variable expenses 80 64 contribution margin $ 45 36 % fixed expenses are $85,000 per month and the company is selling 2,700 units per month. required: 1-a. how much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000 and monthly sales increase by $20,000? 1-b. should the advertising budget be increased?

Suppose the government decides to issue a new savings bond that is guaranteed to double in value if you hold it for 20 years. assume you purchase a bond that costs $25. a. what is the exact rate of return you would earn if you held the bond for 20 years until it doubled in value? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. if you purchased the bond for $25 in 2017 at the then current interest rate of .27 percent year, how much would the bond be worth in 2027? (do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. in 2027, instead of cashing in the bond for its then current value, you decide to hold the bond until it doubles in face value in 2037. what annual rate of return will you earn over the last 10 years? (do not