Percy Motors has a target capital structure of 40 percent debt and 60 percent common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 9 percent, and its tax rate is 40 percent. Percy's CFO estimates that the company's WACC is 9.96 percent. What is Percy's cost of common equity?
The Nunnally Company has equal amounts of low-risk, and high-risk projects. Nunnally estimates that is overall WACC is 12%. The CFO believes that this is the correct WACC for the company's average-risk projects, but that a lower rate should be used for lower risk projects and higher rate for higher risk projects. However, the
Tapley Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) Tapley's bonds mature in 25 years, have a 7.5% annual coupon, a par value of $1,000, and a market price of $936.49. (2) The company's tax rate is 40%. (3) The risk-free rate is 6.0%, the market risk
Please see attached document. Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $100,000 per year. The company allocates these costs to the joint products on the basis of their total sales value of the split-off point. These sa
Zwick Company bought 28,000 shares of the voting common stock of Handy Corporation in January 2006. In December, Hardy announced $200,000 net income for 2006 and declared and paid a cash dividend of $2 per share on the 200,000 shares of outstanding common stock. Zwick Company's dividend revenue from Handy Corporation in December
Hobson Company bought the securities listed below during 2005. These securities were classified as trading securities. On its December 31, 2005, income statement Hobson reported a net unrealized loss of $13,000 on these securities. Pertinent data at the end of December 2006 are as follows: Security Cost Fair Va
Boulter, Inc. began business on January 1, 2006. At the end of December 2006, Boulter had the following investments in equity securities: Trading Available for Sale Cost 60,000 110,000 Market Value 54,000 107,500 All declines
Please see attached file. Mosbach Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Variable overhead cost per direct labor-hour $3.50 Total fixed overhead
Please see attached document. Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor-Hours Annual Per Unit Production Rims...... 0.40 20,000 units Posts...... 0.20 80,000 units Additional information about the company follows: a) R
Please see attached document for problem. The operations vice president of First Bank of Eagle, Kristin Wu, has been interested in investigating the efficiency of the bank's operations. She has been especially concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the
The budgeted unit sales of Hearve Company for the upcoming fiscal year are provided below: 1st QTR 2nd QTR 3rd QTR 4th QTR Budgeted unit sales: 12,000 14,000 11,000 10,000 The company's variable selling and administrative expenses per unit are $2.75. Fixed selling and admi
The direct labor budget of Krispin Corporation for the upcoming fiscal year contains the following details concerning budgeted direct labor-hours. 1st QTR 2nd QTR 3rd QTR 4th QTR Budgeted direct labor-hours: 5,000 4,800 5,200 5.400 The company's variable manufa
The Production Department of the Riverside Plant of Junnen Corporation has submitted the following forecast of units to be produced at the plant for each quarter of the upcoming fiscal year. The plant produces high-end outdoor barbecue grills. 1st QTR 2nd QTR 3rd QTR 4th QTR Units to be produced
Micro Products, Inc., has developed a very powerful electronic calculator. Each calculator requires three small "chips" that cost $2 each and are purchased from an overseas supplier. Micro Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3. as shown below:
Nungesser Corporation's outstanding bonds have a $1000 par value, a 9 percent semiannual coupon, 8 years to maturity, and a 8.5 percent YTM. What is the bond's price?
Andrew can paint the neighbor's house 2 times as fast as Bailey. The year Andrew and Bailey worked together, it took them 7 days. How long would it take each to paint the house? the solution is It would take Andrew __ days. It would take Bailey __ days. simplify the answer
Lisa, an experienced shipping clerk can fill a certain order in 4 hours. Felipe a new clerk needs 7 hours to do the same job. Working together, how long will it take them to fill the order? The solution is __ hours Simplify the answer.
5. The production manager for the Whoppy soft drink company is considering the production of 2 kinds of soft drinks: regular and diet. The company operates one "8 hour" shift per day. Therefore, the production time is 480 minutes per day. During the production process, one of the main ingredients, syrup is limited to maximum pr
The staff for each unit, the additional firefighters to cover daily absents, the probability of overtime work and with 3 a unit organization, how many firefighters for each unit and the total number of full time firefighters for the department. This is a case problem from my Applied Decision Methods course taken from Chapter 10
Please complete the following and note that methods of computation could include the usage of Excel. 1. A random sample of 10 miniature Tootsie Rolls was taken from a bag. Each piece was weighed on a very accurate scale. The results in grams were 3.087 3.131 3.241 3.241 3.270 3.353 3.400 3.411
The Phoenix Corporation has the following financial statistics: · expected EBIT next year without new financing $10 million · expected interest payment next year $ 1.0 million · company tax rate
Prepare answers to the following assignments from the e-text, Applied Statistics in Business and Economics, by Doane and Seward: Chapter 5 - Chapter Exercises 5.62 and 5.70 Note: Methods of computation could include the usage of Excel® or by hand computation. Your work should include your calculation steps, calculat
1. An auditor who uses statistical sampling for attributes in testing internal controls should reduce the planned reliance on a prescribed control when the: a. Tolerable rate plus the allowance for sampling risk equals the sample rate of deviation b - Sample rate of deviation plus the allowance for sampling risk equals t
9.) A school board issues bonds in the amount of $15,000,000 to be retired in 20 years. How much must be paid into a sinking fund each year at 4% compounded annually to pay off the total amount due?
Rollincoast Incorporated issued BBB bonds two years ago that provided a yield to maturity of 11.5%. Long-term risk-free government bonds were yielding 8.7% at that time. The current-risk premium on BBB bonds versus government bonds is half of what it was two years ago. If the risk-free long-term government bonds are currently yi
You wish to purchase a 20-year, $1,000 face balue bond that makes semiannual interest payments of $40. If you require a 10% nominal yield to maturity, what price should you be willing to pay for the bond?
Which of the following bonds have the greatest percentage increase in value if all interest rates decrease by 1%? 20-year, zero coupon bond, 10-year, zero coupon bond, 20-year, 10% coupon bond, 20-year, 5% coupon bond, or 1-year, 10% coupon bond.
Question: Leggio Corporation issued 20-year, 7% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds has dropped to 6%. What is the new price of the bonds, given that they now have 19 years to maturity?
Please see the attached file for the fully formatted problems. Problem #1- This is a production type EOQ problem, where the units produced each day go directly to inventory. Most production problems are treated as gradual delivery problems. Note that the carrying cost is 30% of the cost of making an individual DVD (.30 x 2.
A company has two major businesses that it operates. One business manufactures and sells unicycles for commercial use in circuses, etc. (total sales of $150M), and the other sells bicycles to the public (total sales of $20M). The unicycle business occupies 75,000 square feet of the manufacturing warehouse and the bicycle busines