Purchase Solution

Worldwide Scientific Equipment, Beasley Corporation , Cox Media Corporation: Finance Problems

Not what you're looking for?

Ask Custom Question

(See attached file for full problem descriptions)

Cox Media Corporation pay an 11 percent coupon rate on debentures that are due in 20 years. The
current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at
$1,060. The theoretical value of the bonds will be equal to the present value of the expected cash
flow from the bonds.

a) Find the theroretical market value of the bonds using semiannual analysis.

b) Do you think the bonds will sell for the price you arrived at in part a?

--------------------

The Beasley Corporation has been experiencing declining earnings, but has just announced a 50
percent salary increase for its top executives. A dissadent group of stockholders wants to oust the
existing board of directors. There are currently 11 directors and 30,000 shares of stock outstanding.
MR. Wright, the president of the company, has the full support of the existing board. The dissadent
stockholders control proxies for 10,001 shares. Mr. wright is worried about losing his job.

a) Under cumulative voting procedures, how many directors can the dissadent stockholders elect
with proxies they now hold?

How many directors could they elect under majority rule with these proxies?

b) How many shares (or proxies) are needed to elect six directors under cumulative voting?
-----------------------

Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $1.5 million.
Medical Labs will provide the following pattern of cash inflows and synergistic benefits for the next 25
years. There is no tax loss carry-forward.

YEARS
1 to 5 6 to 15 16 to 25
Cash Inflow (aftertax) $100,000 $120,000 $160,000
Synergistic benefits (aftertax) 15,000 25,000 45,000

The cost of capital for acquiring firm is 9 percent. Should the merger be undertaken?

Attachments
Purchase this Solution

Solution Summary

Computations and response are in Excel for you to follow and study.

Purchase this Solution


Free BrainMass Quizzes
Introduction to Finance

This quiz test introductory finance topics.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.