Purpose of AssignmentThe 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 StepsResources: Corporate FinanceCalculate the following problems and provide an overall summary of how companies make financial decisions in no more than 700 words, based on your answers: 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.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?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?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)?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?Submit your summary and all calcluations.

ScenarioYou work as the accountant of a sole proprietorship, Jamie’s Consulting. Jamie’s Consulting has decided to expand and would like to obtain a line of credit with the bank. To apply for a line of credit, the bank requires the most recent set of financial statements. To help the owner, Jamie, accurately convey the business’s performance and overall financial health to the bank, she has asked you to review the business’s recent transactions and write a brief that will prepare her for her meeting with the bank.DirectionsFinancial Review: Jamie emails you the quarterly business transactions to review. Jamie is currently traveling for business and would like the information from the review in a clear and concise manner. Use the Financial Review Template to review the transactions and provide sufficient reasoning for Jamie to understand your rationale for deciding to share the financial information with the bank. To ensure the financial information is accurate, reliable, and relevant, include the following in your review:Apply the most relevant accounting principle from GAAP to each business transaction.Explain your rationale for applying each accounting principle.Use the accounting principles to decide to include or omit each business transaction.Determine the appropriate account types for each business transaction. Note that each transaction will correspond to more than one type of account.Refer to the accounting equation to determine whether each account type results in an increase or decrease of the account.Brief to the Owner: After you send the financial review information, Jamie follows up with you via email. She is unfamiliar with financial accounting practices and asks you to write a brief that will prepare her for communicating the reliability of the financial information to the bank. As an accountant, you are responsible for effectively conveying the importance of accurate financial information. Specifically, Jamie asks you to address the following in your brief:Explain the importance of applying GAAP to justify the accuracy, reliability, and relevance of financial information.Describe the limitations or risks of applying GAAP. Address Jamie’s concerns by discussing the following:What are the methods used to identify, record, and communicate financial information?What are the implications for omitting one or more of the generally accepted accounting principles?What uncertainties and risk factors are associated with reporting financial information?What to SubmitEvery project has a deliverable or deliverables, which are the files that must be submitted before your project can be assessed. For this project, you must submit the following:Financial ReviewThe financial information must be submitted using the Financial Review Template. Include references in the footnotes section of your review.Brief to the OwnerYour brief to the owner should not exceed 250 words in length. Cite all references appropriately.Jamie's Consulting Quarterly Business Transactions- uploadThis document contains the business transactions for Jamie’s Consulting. You will need the transactions to prepare the financial information for Jamie’s meeting with the bank.Financial Review Template- uploadComplete this template using the business transactions provided to prepare the financial information for Jamie’s meeting with the bank.Reference List For each source that you cite, you need to include the author’s name, the publication year, the title of the source, and the location of the source in a References section at the end of your work.