Houston Technology’s beta is estimated to be 1.4. The firm’s…

Houston Technology’s beta is estimated to be 1.4. The firm’s stock is expected to pay a dividend of $5 at the end of this year and is currently selling for $65. The S&P 500 is currently returning 14%. If the firm expects constant growth in the future of 8%, what is the firm’s after-tax cost of equity? Assume a tax rate of 40%. (6)

Project A has a NPV of $50,000 and an IRR of 12% while Proje…

Project A has a NPV of $50,000 and an IRR of 12% while Project B has a NPV of $40,000 and IRR of 16%. Assume the firm has enough funds to pursue both projects, the firm has a WACC of 10%, and that the projects are mutually exclusive. Which project(s) should be pursued? (2)

A farmer with 10,000 meters of fencing wants to enclose a re…

A farmer with 10,000 meters of fencing wants to enclose a rectangular field and then divide it into two plots with a fence parallel to one of the sides. See the figure. What is the largest area that can be enclosed? Please put your number and show your work on your paper.