1. After four challenging yet fruitful years, you just grad
1. After four challenging yet fruitful years, you just graduated… 1. After four challenging yet fruitful years, you just graduated from college. Your parents gave you P150,000 cash as a graduation gift and advised you to put it in a savings account to earn a 10% rate of return for 4 years. However, being a pet lover, you went to the pet shop and bought a pair of pet dogs worth P150,000. What is the best estimate of the opportunity cost for this decision? (Use 4 decimals for future value factors). 2. The company has 10,000 ordinary shares with a market value of P25 each. It paid a P1.8 dividend per share last year. Dividends are expected to grow at a constant rate of 8%. If flotation costs are 5% of the selling price, what is the cost of new equity financing? a. 8.19%b. 15.78%c. 15.58%d. 16.19% 3. In a gaming room of a high-traffic video arcade wishes to determine the return on its video machine. The machine was purchased 1 year ago for P20,000 and currently has a market value of P21,500. During the year, it generated P800 of after-tax cash receipts. Calculate the annual rate of return, k, for the video machine. (Round off the final answer to one decimal place. Example of writing your answer 2.5%) 4. The Treasury bill rate at the time of estimation is 15% with a beta of 2.0 and the expected return on the market is 20%. What is the firm’s required rate of return ? note: please show the solution on how you get the answer. thank youAccounting Business Financial Accounting ACC 310
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