Carib and Heinekin have reported the returns on small company stocks and U.S. Treasury bills for the period 1986 - 1991 as follows Year small company stocks u.s treasury bills 1986 6.85% 6.1
Which of the following 3 bonds should I invest in assuming a 7% interst rate? Bond Face Value Annual Coupon rate Maturity Price A $1000 4% 1 year $990 B $1000 7.5% 17 years $990 C $1000
As a sweepstakes ( or lotto ) winner I have 5 choices to choose from. Which should I accept? $999,999 now $100,000 per yr forever $180,000 per yr for the next 10 yrs starting now $400,000 payable every 2 yrs for 20 yrs $70,000 per yr forever
America creates more garbage than any other nation. According to Denis Hayes, president of Seattle's nonprofit Bullitt Foundations and a founder of Earth Day, "We need to be an Heirloom Society instead of a Throw-Away Society." The EPA estimates that, on average, we each produce 4.4 pounds of garbage daily (Source: Take out th
5. Calculating Expected Return. Based on the following information, calculate the expected return. State of Probability of State Rate of Return Economy of Economy if State Occurs Recession .30
Only need help on 3, 4, 5, 6, 8, 9, 15 3. What factors affect the sale price of oceanside condomonium units? Please see attached for full question.
1. Common stock value-zero growth - The company's class A stock has paid a dividened of $5.00 per share for the last 15 years. Management expects to continue to pay at that rate for the forseeable future . Sally Talbout purchased 100 shares of common stock 10 years ago at a time when the required rate of return for the stock
The Happy Hound Haven Company estimates that the revenue (in dollars) from the sale of x doghouses is given by R(x)= 625+.03x+.0001x^2. Approximate the change in revenue from the sale of one more doghouse when 1000 doghouses are sold. (make sure to do this using derivatives)
0. _________ is a procedure for revising probabilities based upon additional information. a. Utility theory b. Bernoulli's theorem c. Beckman's theorem d. Bayes' theorem 1. A medical doctor is involved in a $1 million malpractice suit. He can either settle out of court for $250,000 or go to court. If he goes to court and
The following problems are reviews of levels of data: 1. You are asked to do an analysis of students currently attending Baker College classes online. One of the areas being assessed is the number of students in the military compared to civilians. In the survey you plan on sending out, one question asks the respondent to chec
The Minnetonka Corporation, which produces and sells to wholesalers a highly successful line of water skis, has decided to diversify to stabilize sales throughout the year. The company is considering the production of cross-country skis. After considerable research, a cross-country ski line has been developed. Because of the c
U = (all employees of the K.O. Brown Company) A = (employees in the accounting dept) B = (employees in the sales dept.) C = (female employees) D = (employees with an MBA degree) Describe the following set in words: B ∩ D
Your required a rate of return is 4%. What is the value of a contract that pays the buyer $100 a year forever (the first payment is made exactly one year after purchase) plus an additional $1000 a year for the first 10 years (but, the first payment is made immediately - in other words, the $100 payments are made at the end of ea
Suppose you are managing a portfolio, consists of 20 stocks. The beta of your portfolio is 1.65. You decide to sell five stocks from your portfolio: the beta of those five stocks was 2.00. You are also thinking to purchase 10 additional stocks, with a combined beta of 1.05, to replace the stocks you are selling. All stocks are o
Suppose you have a bond, with a par value of $1000, that pays interest twice a year at the rate of 12%. You paid $853.29 when you purchased this bond a) Calculate the interest rate yield of your bond. b) You are selling this bond today and will receive $ 936.33 for it. What is the capital gain/loss?
Today's closing price of a bond, with the par value of $1,000.00 and 8% coupon rate, was listed as 103.50. The information also indicates that today's price was 7.20 higher then yesterday. Based on this information a) Calculate this bond's closing price for today b) Calculate yesterday's price of this bond
Suppose a company paid $4.70 per share as a dividend on last Friday. The investors expect the dividend to grow at a constant rate of 6%(g) per year,and their required rate of return(Ks) is 14% a) Calculate the expected dividends for each of the next 5 years b) Calculate the intrinsic value (Po) of the stock c) Do the sa
Asset Exchanged at a Gain Asset originally purchased on 1/1/90 is exchanged for a similar asset on 1/1/93. Cash of $10,000 is also paid and the old asset has fair market value of $8,000 on the date of exchange.
Last year Quality's earnings per share were $2.34 and it paid a dividend of $1.10. What was Quality's dividend payout ratio?
The conversion price of CRX's convertible ($1,000 par) subordinated debentures is $40 and the present market price of CRX common stock is $48. Determine the present conversion value of the convertible issue. (First determine conversion ratio).
The following financial information is available on Rawls Manufacturing Company: Current per share market price $48.00 Current (t=0)per share dividend $ 3.50 Expected long-term growth rate 5.0% Rawls can issue new common stock to net the company $44 per share. Determine the cost of internal equity capital (Ke)using
The Allegheny Valley Power Company common stock has a beta of 0.80. If the current risk-free rate is 6.5%(Krf)and the expected return on the common stock as a whole is 16%(Km),determine the cost of equity capital (Ke)for the firm (using the CAPM). The answers to this problem are one of the following: a. 14.1% b. 7.6% c. 6.
Syntech is offered credit terms of 2/10, net 40, but decides to forego taking the cash discount and pays on the 45th day. What is Syntech's cost of foregoing the cash discount? [AFC=(Interest Paid/usable funds)(365/maturity(days)] The four answers that I have are one of the following: a. 24.83% b. 21.28% c. 18.62% d. n
Given the following probability distribution, what is the expected return and the standard deviation of returns for security J? state 1, probability 0.2, expected return 10% state 1, probability 0.6, expected return 15% state 3, probability 0.2, expected return 20% a. 15%; 6.50% b. 12%; 5.18% c. 15%; 3.16% d.
A large corporation with offices filling a 40 storey building is concerned to minimize the waiting and travel times of its employees when using the lifts, which are regularly perceived as too long at certain times of the day. It is powerless to alter the number of lifts in service; instead it seeks to model the pattern of the us
I am stuck on the problems that are attached. They are probability and decision theory based questions. Thank you.
Application Problem 1S (Sales Revenue Problem) The owner of an apartment complex knows he can rent all 50 apartments when the monthly rent is $400. He thinks that for any 25$ increase in the rent, he will loose 2 tenants. Write a linear polynomial for the rent price P and a linear polynomial for the number of apartments (Q).
A corporation may obtain a machine by leasing it for six years (the useful life), paying an annual fee of $3,000, or by purchasing it for $12,000. Which alternative is preferable if the corporation can invest money at 8% per annum (i.e., its cost of capital is 8%)?
The problem is attached. The profit P (in dollars) made by a fast food restaurant selling "x" hamburgers is: P(x) = 2.44x - x^2 / 20,000 - 5000 for 0 <= x <= 35,000 Find the open intervals on which P is increasing or decreasing.