Assume a world without taxes. Two firms, Mix Corp. and Dial Co. are identical in every way except for their capital structures. Mix, an all-equity firm, has 200000 shares of common stock outstanding; each share sells for $30. In addition to equity financing, Dial uses leverage; the market value of Dial's debt is $3,000,000, and
An investor bought 100 shares of Venus Corporation stock 1 year for 40 share. She just sold the shares for 44 each and during the year she received four quarterly dividend checks for $40 each. She expects the price of the Venus shares to fall to about $38 over the next year. Calculate the investor realized percentage holding
Task: Compare Supplemental Executive Retirement Plans with 401 K Plans. Make sure to cite any references used.
Elaborate in your own words with detailed responses to the questions. Why do options sell at prices higher than their exercise values? Describe between beta (or market) risk, within-company (or corporate) risk, and stand-alone risk for a potential project. Of these three measures, which is theoretically the most releva
An oil company is drilling a series of new wells on the perimeter of a producing oil field. About 20 percent of the new wells will be dry holes. Even if a new well strikes oil, there is still uncertainty about the amount of oil produced: 40 percent of new wells that strike oil produce only 1,000 barrels a day; 60 percent produc
Please Explain in Your Own words (200 words) a detailed explanation without references please. There are Two investors are evaluating General Motors (GM) stock for a possible stock purchase. They agree on the expected value of D(1) and also on the expected future dividend growth rate. Also, they agree on the risk of th
Brian Hotel is interesting a new hotel in Korea. The company estimates that would require an initial investment of $20 million. Brian Hotel expects that the hotel will produce positive cash flows of $3 million a year at the end of each of the next 20 years. The project's cost of capital is 13%. What is the net present value?
See the attached spreadsheet to be used in solving the problem. Donna and Sherman Terrel are preparing a budget for 2003. Donna is a systems analyst with an airplane manufacturer, and Sherman is working on a master's degree in educational psychology. The Terrels do not have any children or other dependents. Donna estimates he
Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about $50,000 next year and will have accumulated about $40,000 to invest. They now rent an apartment but are considering purchasing a condominium for $100,000. If they do, a down payment of $10,000 will be requi
I have to prepare a paper in which I explain the roles of limited liability partnerships and corporations. If you were establishing your own business, under what circumstances would you choose one from the other? Be sure to properly cite your references. If you used an electronic source, include the URL. If you used a printe
25. The par value of a stock a. is legally significant. b. reflects the most recent market price. c. is selected by the SEC. d. is indicative of the worth of the stock. 26. The authorized stock of a corporation a. only reflects the initial capital needs of the company. b. is indicated in its by-laws.
Since Congress passed Medicare in 1965, the program has been subject of countless debates on topics ranging from reimbursement rates to the potential bankruptcy of Medicare. Using the literature that you find yourself, discuss Medicare and its financial state/health. Limit your responses to a maximum of three pages. Be sure t
Using the information available, prepare a 3-4 page paper assessing your organization's financial condition by applying the ratios. If unable to locate financial information necessary for this project, use the hypothetical information found at the following site: Benchmarks (HTTP://WWW.DATA-ADVANTAGE.COM/DASAMPLES/BMK_FINANCI
Choose a healthcare organization with which you are familiar and that you will be following closely this session. This should be an organization about which you can obtain financial information. In the case you are unable to access the financial information of your organization you may use the financial information from the Adv
The strategic planning process, taken as a whole, has been positively associated with financial performance. Once comfortable with the materials in the assigned readings please conduct additional research and prepare and submit a 4-5 page paper responding to the following questions: 1. Discuss the steps involved in formulating
Which category of financial ratio (liquidity, profitability, or solvency) is the most important when conducting financial analysis?
What items should be considered in a financial statement analysis? Which category of financial ratio (liquidity, profitability, or solvency) is the most important when conducting financial analysis? Why?
Ratios: Which category of ratios is considered most important to a bondholder? Which category of ratios is considered most important to a stockholder?
What are the different categories of ratios? Which category of ratios is considered most important to a bondholder? Why? Which category of ratios is considered most important to a stockholder? Why?
What are liquidity ratios and who are the primary users of the ratios? Why they are important from a relative comparison approach (explain)? How might an investor use liquidity ratios when making investment decisions for stocks and bonds only?
Why is risk magnified when we use something called margin and leverage?
Your eccentric Aunt Claudia has left you $50,000 in Alcan shares plus $50,000 cash. Unfortunately her will requires that the Alcan stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown in Table 7.8. What is the safest attainable portfolio under these restrictions? Correlat
A) The president of ABC made this statement in the firm's annual report: "ABC's primary goal is to increase the value of our common stockholders' equity." Later in the report, the following announcements were made: 1. The firm contributed $1.4 million to the symphony orchestra. 2. The firm is spending $600 millio
Discuss a real world decision that you made before taking this class for which you could have analyzed (like a capital budgeting decision or security investment) but didn't. Explain (you do not have to include numbers) how you might now go about setting up your "investment decision."
The Treasury bill rate is 4 percent and the expected return on the market portfolio is 12 percent. Using the capital asset pricing model: What is the required return on an investment with a beta of 1.5?
There are few, if any, real companies with negative betas. But suppose you found one With beta = - .25. a. How would you expect this stock's rate of return to change if the overall market rose by an extra 5 percent? What if the market fell by an extra 5 percent? b. You have $1 million invested in a well-diversified portf
You purchase 100 shares of Sadia Fund at the offering price of $40.00. There is no front- or back-end load, but the operating expense ratio is 2.0%. If the fund appreciates by 15%, what is your percentage return one year later?
You bought 200 shares of a stock at $12 per share and use 50% margin. The stock rises to $16 per share. What is your margin in percent after the price increase? If the maintenance margin is 35%, what is the critical price (i.e. at what price will you receive a margin call)?
What is the basic purpose of a financial market? How do money and capital markets differ? How do primary and secondary financial markets differ? Describe the concept of market efficiency. What are the three different levels of market efficiency?
The Marketing department likes to know patterns about the consumers who call the 1-800 phone bank with questions/problems. You meet with them to discuss the matter. Suggest at least 3 quantitative objects that you should keep track about each caller and/or their behavior with respect to the snack food category and indicate i
An open end mutual fund has the following stocks: STOCK SHARES STOCK PRICE A 9,000 $68 B 13,000 39 C 8,600 49 D 12,500 82 If there are 50,000 shares of the market fund what is the NAV? Suppose the fund has liabilities of $110,000. What
Eastman Kodak Company produces and sells cameras, film, and other imaging products. A condensed 2000 income statement follows (in millions): Sales $13,994 Cost of goods sold 8,019 Gross Margin 5,975 Other operating expenses 3,761 Operating income $2,214 Assume that $1,800 million of the cost of goods sold