(1) What role does a finance department play in valuing business opportunities (both internal such as projects and external such as acquisitions)? (2) How might a division manager form a good working relationship with and utilize the talents of the CFO, treasurer and controller for this assignment to include in-text citations an
Research an equation/formula that you use, rely on, or hear about in your everyday world (i.e., weather forecast, stock market predictions). Describe common uses of the formula or equation that you are exposed to. Are these always right? Why or why not?
You invest $100 (at time 0) and expect to receive $115 in cash in one year. Your required return is 9 percent. a) Calculate the value of your investment at time 0 using discounted cash flow techniques. b) Calculate the value of your investment using residual earnings techniques c) Suppose that your accountant demanded that
Justify the current market price of the organization's equity, if any, using various capital valuation models. Show calculations that support your findings, including those involving rates of return Organization is Toyota and here is the link. http://www.toyota.co.jp/en/ir/library/annual/pdf/2009/index.html.
1) You expect your newly born child to attend college in 18 years. You have $12,000 to set aside for that purpose. You also expect that the total cost of college education to be $100,000 by that time. Calculate the interest rate at which you have to invest today to achieve your goal. SHOW CALCULATIONS AND WHAT NUMBERS GO IN
The pricing objective of maximizing profits: 1 has not been affected by other, more socially focused concerns. 2 is to be implemented under any and all circumstances. 3 has not always been considered the underlying objective of any pricing policy. 4 must be considered when determining the price
The New York Times potential acquisition target for Google, new possible investment item, what problems are you going to have in estimating the cash flow that might be emanating from the initial investment and problems in getting it funded? Issues might be: ? Risk ? Cost ? Politics (getting it through committees) ? Publ
Your company will generate $65,000 in cash flow each year for the next 10 years from a new information database. The computer system needed to set up the database costs $307,000. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) 1) If you can borrow the money to buy the computer system at 8.25 perce
Which one of the following statements about the discounted payback method is true? A) The discounted payback technique tends to favor longer term projects over shorter term projects B) The discounted payback period method completely ignores cash flows that occur after the initial investment has been recouped C) The discount
Recalculate the forecasts in Table 8-4 assuming that the NOPAT profit margin is held steady for the first five years of the forecast and then declines by 0.1 percentage points per year thereafter (keeping all the other assumptions unchanged). Show all calculations and provide an interpretation. (See attached Excel file for Ta
PREFERRED STOCK VALUATION Fee Founders has perpetual preferred stock outstanding that sells for $60 a share and pays a dividend of $5 at the end of each year. What is the required rate of return? PREFERRED STOCK VALUATION Ezzell Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently y
Problem #1 TCM Petroleum is an integrated oil company headquartered in Fort Worth, Texas. The following are the information on its income statements for 2007 and 2008 (all dollar figures are in millions): 2007 Sales: $12,200.00, cost of goods sold: 72% of sales, depreciation: $850.00, additional CAPEX: $900.00, addition
1) A firm offers terms of 2/15, net 48. What effective annual interest rate does the firm earn when a customer does not take the discount? 2) What is the Current Price and Yield to Maturity of a 8% semi-annual coupon bond if it has a current yield of 9.3% and matures in 10 years? 3) Use the following list of accounts and
What are three key inputs to the valuation model? How would you determine the valuation of an asset? How would the intrinsic value differ from the market value? Explain your answer.
Project K costs $52,125, its expected net cash inflows are $12,000 per year for 8 years, and its WACC is 12%. a) What's the project's NPV? b) What's the project's IRR? c) What's the project's MIRR? d) What's the project's payback? e) What's the project's discounted payback?
Please help answer the following problems. A. Find the present values of the following cash flow streams at 8% compounded annually. 0 1 2 3 4 5 ------------------------------------------------ Stream A $0 $100 $400 $400 $400 $300 Stream B $0 $300 $400 $400
The three typical accounting events associated with borrowing money through a bond issue are: 1. Exchanging the bonds for cash on the day of issue. 2. Making cash payments for interest expense and recording amortization when applicable. 3. Repaying the principal at maturity. Required A. Assuming the bonds are issued a
Anderson & Company plans to make a $50 million investment, initially funded completely with debt. The free cash flows of the investment and Anderson & Company's incremental debt from the project are shown below (see the attachment).
NOTE: Please follow the instructions; I must use the specific instructions that I attached as well as "current market data." MS Word document has actual assignment. MS PowerPoint has specific instructions: note the updated figure I placed on slide #1 for 10 year treasury is current (9 sep 09) PDF has IBM's stock data you are
When performing discounted cash flow analysis, what costs are disregarded? Why? What error(s) occur if these costs are included in the analysis? Please properly cite your references. Thanks.
1. Brooke Bennett Marina has 300 available slips that rent for $900 per season. Payments must be made in full at the start of the boating season, April 1, 2008. Slips for the next season may be reserved if paid for by December 31, 2008. Under a new policy, if payment is made by December 31, 2008, a 5% discount is allowed. The bo
Provide a buy or sell recommendation and an estimated price target. Should include the following 5 sections: 1) Background of the company with a life cycle analysis 2) Analysis of Return on Equity 3) The company's future growth rate of earnings 4) Analysis of its required rate of return using the CAPM 5) Intrinsic v
Estimate the cost of equity, WACC, and unlevered cost of equity for Wal-Mart, Incorporated (NYSE: WMT). Find the beta for Wal-Mart and: 1. Estimate Wal-Mart's cost of equity. 2. Estimate Wal-Mart's weighted-average cost of capital (WACC). 3. Estimate Wal-Mart's unlevered cost of equity.
The last dividend paid by Klien Company was $1.00. Klein's growth rate is expected to be a constant 4%. Klein's required rate of return on equity( Ks) is 12%. What is the current price of Klein's common stock?.
The last dividend paid by XYZ Company was $1.00. XYZs growth rate is expected to be a constant 5%. XYZ's required rate of return on equity (ks) is 10%. What is the current price of XYZ's common stock?
There is a 2 year swap contract (fix to float) signed on the swap rate of 5%; Interest will be exchanged every half year. Now suppose the swap contract start from now on and the current zero rates are in the table below. Calculate how much the swap value right now for the fixed payment side. Maturity(Yrs) Zero Rate(Continuo
1. Compute the expected return and volatility of return for a portfolio that has a portfolio share of 0.9 in the S&P 500 and 0.1 in an emerging market index. The S&P 500 has a volatility of return of 15 percent and an expected return of 12 percent. The emerging market has a return volatility of 30 percent and an expected return
At the end of 2005, Uma Corporation was considering undertaking a major long-term project in an effort to remain competitive in its industry. The production and sales departments determined the potential annual cash flow savings that could accrue to he firm if it acts soon. Specifically, they estimate that a mixed stream of fu
1. Michaely Inc. is an all-equity firm with 200,000 shares outstanding. It has $2,000,000 of EBIT, which is expected to remain constant in the future. The company pays out all of its earnings, so earnings per share (EPS) equal dividends per shares (DPS). Its tax rate is 40%. The company is considering issuing $5,000,000 o