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Dynastatics Corporation: Building Financial Models

Building Financial Models. The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (that is, assets net of depreciation) by $200,000 per year for the next 5 years and forecasts that the ratio of revenue

Cost of Capital: Debt or Equity

Given the current state of the economy and our financial markets, is it more desirable for firms to raise money through debt or through equity at this time? Corporations almost always need more funds and capital in order to keep running, so not raising funds is not an option. So is debt or equity the best option at this time for

Intermediate Accounting -- Stockholders' Equity -- 5 Multiple Choice

41. In January 2007, Castro Corporation, a newly formed company, issued 10,000 shares of its $10 par common stock for $15 per share. On July 1, 2007, Castro Corporation reacquired 1,000 shares of its outstanding stock for $12 per share. The acquisition of these treasury shares a. decreased total stockholders' equity. b. increa

Purchase Budget for Lima

A manufacturing company manufactures a product called Formido. Each unit of Formido requires two pounds of Lima. The budget calls for production of 8,000 units of Formido during the third quarter. The ending inventory of Lima is forecasted at 3,000 pounds for the second quarter and 2,000 pounds for the third quarter. How many po

CAPM, Risk: For each of the scenarios below, explain whether or not it represents a diversifiable or an undiversifiable risk. Please consider the issues from the viewpoint of investors. Explain your reasoning.

1. For each of the scenarios below, explain whether or not it represents a diversifiable or an undiversifiable risk. Please consider the issues from the viewpoint of investors. Explain your reasoning. a. A large fire severely damages three major U.S. cities. b. A substantial unexpected rise in the price of oil. c. A ma

Current and Other Ratios

What financial information does the current ratio measure? How does the current ratio relate to the other liquidity ratios? Which financial ratios would you use - and how - to determine whether a company will be able to meet its commercial bank loan payments?

45 Multiple Choice Problems Regarding Accounting issues

1. Which of the following is not considered an asset? A. Equipment B. Dividends C. Accounts receivable D. Inventory Answer: _______________ 2. These are selected account balances on December 31, 2010. Land (location of the corporation's office building) $100,000 Land (held for future use) 150,000 C

Calculating the Impact of a Stock Split

Please help with the following problem. Provide step by step calculations for each. You own 8% of the Standlee Corporation's common stock, which most recently sold for $98 before a planned two-for-one stock split announcement. Before the split there are 30,000 shares of common stock outstanding. a. Relative to now, what wil

Maximizing Profitability

Please see attached document. Toxemia Salsa Company manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's income statement segmented by flavor (brackets indiciate a negative amount): Wimpy Mild Medium Hot Atomic Contribution

Contribution margin ratio

Devlin Company has two divisions, C and D. The overall company contribution margin ration is 30% with sales in the two divisions totaling $500,000. If variable expenses are $300,000 in Division C, and if Division C's contribution margin ratio is 25%, then sales in Division D must be?

A Mutual Fund Manager: Average Beta

A mutual fund manager has a $20.0 million portfolio with a beta of 1.50. The risk-free rate is 4.50%, and the market risk premium is 5.50%. The manager expects to receive an additional $5.0 million which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 1

Using the AFN Equation to Calculate the AFN for the Coming Year

Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Last year's sales = S0 $200,000 Last year's accounts payable $50,000 Sale

Determine increase in cost of education

At Takoma Park University, they offer a multitude of courses each quarter. The students pay $1,200 per course. However, Dean Dong realizes that the tuition needs to be increased because of rising costs. After some analysis, Dean Dong determined that tuition needs to increase by $300 per course. At dinner one evening, Patsy P


I need some help to start in writing a 700-word paper in APA format with references evaluating the financial aspects of the American Red Cross. Answering these questions o How do they fund their programs? o How reliable are their funding sources? o Do they implement financial accountability measures to ensure that funds are

Redford Investment Company: Comparing returns on warrants and stocks

The Redford Investment Company bought 100 Cinema Corp warrants one year ago and would like to exercise them today. The warrants were purchased at $24 each, and they expire when trading ends today (assume there is no speculative premium left). Cinema Corp common stock is selling today for $50 per share. The exercise price is $

Value of stock warrants

The Preston Toy Co has warrants outstanding that allow the holder to purchase a share of stock for $22. (exercise price) The common stock is currently selling for $28, while the warrant is selling for $9.25 per share. a. What is the intrinsic (minimum) value of this warrant? b. What is the speculative premium on this warr

Portfolio Managers and Commission on Products

Do you care if the portfolio manager 'stays''? What effect can/should you expect with regard to the tenure (or lack thereof) of a particular portfolio manager? Are load (commission loaded) or no-load (commission free) products better? Why?

Capital Structure and Dividend Policy : Recapitalization

Jones Co. currently is 100% equity financed. The company is considering changing its capital structure. More specifically, Jones' CFO is considering a recapitalization plan in which the firm would issue long-term debt with a yield of 9% and use the proceeds to repurchase common stock. The recapitalization would not change the


1. What is the meaning of the following sentence: Amortization affects the amount of interest expense? How does amortization of premium affect the amount of interest expense? How does amortization of discount affect the amount of interest expense? 2. Why might some stockholders be included to buy preferred stock rather th

Coefficient of varitaion

Five investments alternatives have the following returns and standard deviations of return. Alternative Returns-Expected Value Standard Deviation A $5,000 $1,200 B 4,000 600 C 4,000 800 D 8,000 3,200 E 10,000 900 Using

Values of Investments

Which would you prefer? a. An investment paying interest of 12 percent compounded annually. b. An investment paying interest of 11.7 percent compounded semiannually. c. An investment paying 11.5 percent compounded continuously. Work out the value of each of these investments after 1, 5, and 20 years.

What is the PV of $100 received in

What is the PV of $100 received in: a. Year 10 (at a discount rate of 1 percent). b. Year 10 (at a discount rate of 13 percent). c. Year 15 (at a discount rate of 25 percent). d. Each of years 1 through 3 (at a discount rate of 12 percent).

Executive Summary of Honda Motor Company

Headquartered in Japan, Honda Motor Company is one of the major producers of quality motor vehicles around the world. Honda's quality, innovation and reliability has made it one of the most sought after car brands in the world.

Finance problem solving

Please show the work on how each problem is done 3) You are trying to save for $140,000 Ferrari. You have $30,000 to invest and your bank pays 4.2% annual interest. How long before you have enough to buy the car? 8) In a typical month, Curfman Company receives 100 checks totaling $75,000. These are delayed 4 days on a

Business Finance: calculate cash and current assets

Cash Equation. A Company has a book net worth of $38,000. Long-term debt is $6,500. Net working capital, other than cash, is $4,300. Fixed assets are $32,500. How much cash does the company have? If current liabilities are $7,200, what are current assets?

Calculating the Total Percentage Gain on Shares

An investor buys shares in the no-load Go-Go Mutual Fund on January 1 at a NAV of $ 21.20. At the end of the year the price is $ 25.40. Also the investor receives .50 cents in dividends and a capital gains distribution of .35 cents. What is the total percentage gain on the beginning NAV (round off to two places to the right of t