Explore BrainMass


Capital Budgeting : Weighted Average Cost of Capital

Blanchford Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC = 10% Year: 0 1 2 3 4 Cash flows: -$1,000 $475 $475


Many corporate acquisitions result in losses to the acquiring firms' stockholders. Accordingly, why do firms purchase other corporations? Are they simply paying too much for the acquired corporation? A co-worker asks your opinion. Specifically state the reasons for your argument. PLEASE TO PROVIDE REFERENCE AND CITATION IN AP

Break-Even Point in Units of Output

You are a hard-working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost structure information for this company. All of it pertains to an output level of 10 million units. Using this information, find the break-even point in units of outpu

Cost of preferred stock including flotation costs

On the New York Stock Exchange, the preferred stock of Ward Butler Inc., which has a stated dividend of 8% and a par value of $50, is trading for $49.00. The company will sell 1 million new shares at the going market rate and will have to pay 5% in flotation costs. What is the cost of the preferred stock, including flotation?

Underwriting spread

A company is the managing investment banker for a major under writing.the price of the stock to the investment is $18 per share, other members may buy the stock for $18.25 the price to the selected dealer group is $18.80, price to a broker of $19.20, price to the public $19.50. a) if the company sells the shares to the group,

Lottery Wiinings : How do you get the most money?

You just won the lottery for 1 million payable in annual installments of 200,000.00 with the first payment made in 1 year. Alternative, you could accept 850,000.00 today. Regardless on whether you take the 200,000.00 annually or the 850,000 today, you are confident yoiu could earn 8% each year on the payout or the next 5 yrs.

Earnings per Share under Bad, Normal & Good Economy

I am having trouble figuring out the effects of recapitalizing on the EPS. All equity firm, on 11/2/09 stockholder decide they don't want to put up 10,000000 and not borrow any debt so they recapitalize 5,000,000 in bonds at 5% with 5000,000 shares at $10. How do you calculate the threes scenarios EPS now that they have DEBT?

Finance: Dividends on stock for BuyLo and Delta stock

1) On May 18th, you purchased 1,000 shares of BuyLo stock. On June 5th, you sold 200 shares of this stock for $21 a share. You sold an additional 400 shares on July 8th at a price of $22.50 a share. The company declared a $.50 per share dividend on June 25th to holders of record as of Thursday, July 10th. This dividend is payabl

Finding Standard Deviation of Portfolio: Example

Security F has an expected return of 12% and a standard deviation of 9% per year. Security G has an expected return of 18% and a standard deviation of 25% per year. A portfolio is composed of 30% of Security F and 70% of Security G? If the correlation coefficient between the returns of F and G is 0.2, what is the standard deviat

You have been given information that if a student is a resident and they enroll for more than 12 hours, then their tuition will equal $120 plus $10 per hour for every hour greater than 12.

Solve the following problems showing all your work every step of the way. 1. You have been given information that if a student is a resident and they enroll for more than 12 hours, then their tuition will equal $120 plus $10 per hour for every hour greater than 12. Create an equation that would allow a student to simply plug

Calculating Rate of Return on a Company's Reinvested Funds

Computer Corp. reinvests 60 percent of its earnings in the firm. The stock sells for $50, and the next dividend will be $2.50 per share. The discount rate is 15 percent. What is the rate of return on the company's reinvested funds (i.e. the ROE)?

Dropping or Retaining a Segment

Please see attached document. Boyle's Home Center, a retailing company, has two departments, Bath and Kitchen. The company's most recent monthly contribution format income statement follows: Department Total Bath Kitchen Sales $5,000,000 $1,000,000 $4,000,000 Variable expenses 1,900,000 300,000 1.600,000 Contributio

Identification of Relevant Costs

Please see attached document. Steve has just returned from salmon fishing. He was lucky on this trip and brought home two salmon. Steve's wife, Wendy disapproves of fishing, and to discourage Steve from further fishing trips, she has presented him with the following cost data. The cost per fishing trip is based on an average

Basic segmented income statement

Caltech, Inc. produces and sells recordable CD and DVD packs. Revenue and cost information relating to the products follow: Product CD DVD Selling price per pack $8.00 $25.00 Variable expense per pack $3.20

Simon Manufacturing: Compare cost of two-step buyout to a single step proposal

Simon Manufacturing Co. is planning to acquire Garfunkel Engineering in a two-step buyout. Garfunkel has 3,000,000 shares of common stock currently outstanding, and the market price is currently $25 per share. The first step of the buyout would offer to purchase 51% of Garfunkel Engineering common stock for $34 per share, The se

Williams Company: compute break even chart

Please see the attached files. They include the instruction sheet and excel file (there are 2 sheets in this file). COST-VOLUME-PROFIT (BREAK-EVEN) Instructions and data to calculate break-even, target profit stated as before taxes and after taxes, under-performance losses for The Williams Company as well as preparing a

Price of shares, NPV from merger, lease or buy decision

1-A firm has 100 shares of stock and 40 warrants outstanding. The warrants are about to expire, and all of them will be exercised. The market value of the firm's assets is $2,000, and the firm has no debt. Each warrant gives the owner the right to buy 2 shares at $15 per share. What is the price per share of the stock? a.$

Abel Athletics Financial Forecast

As a division manager at Abel Athletics, you are expected to work with the Finance Department to develop financial forecasts for your division. Prepare a document that explains why forecasting is important to an organization. Explain the forecasting process, compare, and contrast it to the budgeting process. Discuss the role of

Finance : Net Profit, Cash-Flow Statements, ROE, ROA and Profit Margin

For the 12months ended December 31, 2005, Quintero Corporation Posted the following financial results: Sales of $96.8 million, cost of goods sold of $72.0 million, overhead expenses of $5.5 million, depreciation of $2.3 million, and interest expense of $7.0 million. During the Fiscal year, capital spending totaled $97.8 millio

Calculating returns on stocks purchased with/without margin

You purchase 500 shares of 2nd Chance Co stock on margin at a price of $53. Your broker requires you to deposit $11,000. Suppose you sell the stock at a price of $62, what is your return? What would your return have been had you purchased the stock without margin? What if the stock price is $44 when you sell the stock?

How much external financing does Company ARI require next year?

ARI has current sales of $50 mil. Sales are expected to grow to $75 mil. next year. ARI currently has accounts receivable of $10 mil, inventories of $15 mil and net fixed assets of $20 mil. These assets are expected to grow at the same rate as sales over the next year. Accounts payable are expected to increase from their cur

Business accounting and finance

I need help to get started in preparing 1,000 to 1,200 not including title and references word in APA format with the references. Please see objective that I posted thank you. Task Name: Phase 1 Discussion Board Deliverable Length: 1,000-1,200 words, not including title page & reference Details: Operations deals with how

Hurd Company exchange property for stock; Bunyan par stock

31. Hurd Company acquired a building valued at $160,000 for property tax purposes in exchange for 10,000 shares of its $5 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Hurd Company? $50,000 $150,000 $160,000

Payback of Mutually Exclusive Projects with Depreciation

You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value. Reference: 06_02 Project A

Investment in Stock

On October 1, 2008, Chicago Corp. purchases 1,000 shares of the preferred stock of Denver Corp. for $40 per share. In addition, Chicago pays another $1,000 in commissions. On October 20, 2008, Denver delivers and pays a dividend of $1 per share. Chicago sells the stock on November 5, 2008, at a price of $45 per share. Require