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
Please see attached files. Complete the financial information for Capstan Auto using the attached excel spreadsheet.
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
4. CheckPoint: Financial Ratios · Resource: The General Motors Web site This CheckPoint is based on financials of the 2004 annual report for General Motors, which was just discussed in this weekʼs discussion questions. · Due Date: Day 5 [Individual forum] · Compute the following four ratios for General Mot
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
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
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?
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
The Nunnally Company has equal amounts of low-risk, average-risk, and high-risk projects. Nunnally estimates that its overall WACC is 12%. The CFO believes that this is the correct WACC for the company's average-risk projects, but that a lower rate should be used for lower risk projects and a higher rate for higher risk projec
McMaster Inc, has a times interest earned ratio of 4.0. Based on this ratio, a creditor knows that McMasters EBIT must decline by more than____ before McMaster will be unable to cover its interest expense. A 33% B 40% C 67% D 75% E 80% A firm has sales of $500, total assets of $300 and a debt-equity ratio of 2. If its
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
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
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?
Corp. considering two potential projects, X and Y. In assessing the projects' risks, the company estimated the beta of each project versus both the company's other assets and the stock market, and it also conducted thorough scenario and simulation analyses. This research produced the following numbers: Expected NPV Standa
The Lashgari Company is expected to pay a dividend of $1 per share at the end of the year, and that dividend is expected to grow at a constant rate of 5% per year in the future. The company's beta is 1.2, the market risk premium is 5%, and the risk-free rate is 3%. What is the company's current stock price?
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
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
Clayton Industries is planning its operations for next year, and Ronnie Clayton, 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? Dollars are in millions. Last year's sales = S0 $350 Last yea
1. Which of the following actions are likely to reduce the length of a company's cash conversion cycle? a. Adopting a just-in-time inventory system which reduces the inventory conversion period. b. Reducing the average days sales outstanding (DSO) on its accounts receivable. c. Reducing the amount of time the company takes
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
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 $
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
23. Winslow Enterprises has total assets of $11,700, net working capital of $1,400, owner's equity of $5,000 and long-term debt of $3,500. What is the value of the current assets? 24. Gladstone, Inc., has net working capital of $4,300, long-term debt of $8,200, total debt of $10,100, and owners' equity of $12,000. What is the
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?
What is financial leverage? Why might a company that has a high degree of operating leverage not want to have a high degree of financial leverage.
Fletcher Corp. has a capital budget of $1,000,000, but it wants to maintain a target capital structure of 60% debt and 40% equity. The company forecasts this year's net income to be $600,000. If the company follows a residual dividend policy, what will be its dividend paid?
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
The Hughes Company is involved in a competitive bidding situation. Variable costs related to the project total $290,000. and allocated fixed overhead is $95,000. What cost figure should be used in setting a minimum bid price if Hughes has excess capacity?
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