You have been hired into a new company to oversee the accounting department. Explain what type of financial reports would you expect to see in your department? How will you use the financial reports available to you to make business decisions?
What is the Delphi technique in risk management? How would you use the results of the Delphi technique?
Complete problems 1, 2, 4, 6, 9, & 11 on text pp. 296-297 of Ch. 9. 1. General Cereal common stock dividends have been growing at an annual rate of 7 percent per year over the past 10 years. Current dividend (D0) is $1.70 per share. What is the current value of a share of this stock to an investor who requires a 12 percent
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 15 years, because the firm needs to plow back its earnings to fuel growth. The company will pay a $6 per share dividend in 16 years and will increase the dividend by 6 percent per year thereafter. If the required return on
1.What is a limited liability corporation? 2.What is a limited liability partnership? 3.What are the differences? 4.What are the advantages and disadvantages of each?
A. Finance b. Efficient Market c. Primary Market d. Secondary Market e. Risk f. Security g. Stock h. Bond i. Capital j. Debt k. Yield l. Rate of Return m. Return on Investment n. Cash Flow Please p
1. Determine the future values if $5,000 is invested in each of the following situations: A. 5 percent for ten years. Future value=$5,000 x (+ 5 2. Determine the annual payment in a 415,000, 12 percent business loan from a commercial bank is to be amortized over a five-year period. PVA= PMT(PVIFA 10%4) $415,
From Mayes' Financial Analysis with Microsoft Excel (4th ed.), p. 266. 1. Using the Yahoo! Finance website (http://finance.yahoo.com), get the current price and five-year dividend history for Eli Lily & Co. To gather this data, enter the ticker symbol (LLY) in the Get Quotes box at the top of the page and then click the GO
Stormy Weather has no attractive investment opportunities. Its return on investment (ROE) is equal to the discount rate which is 10 percent. Its expected earnings this year are $3 per share. Find the stock price and growth rate of dividends for plowback ratios (retention ratios) of: a. Zero b. 5% c. 10% d. 15%
You have borrowed $14,300 at an interest rate of 15 percent. You feel that you will be able to make annual payments of $3,000 per year on your loan. (Payments include both principal and interest.) a. How long will it be before the loan is entirely paid off (to the nearest year)?
The Jones Company has decided to undertake a large project. Consequently, there is a need for additional funds. The financial manager plans to issue preferred stock with a perpetual annual dividend of $5 per share and a par value of $30. If the required return on this stock is currently 20 percent, what should be the stock's m
Steaks Galore needs to arrange financing for its expansion program. One bank offers to lend the required $1,000,000 on a loan which requires interest to be paid at the end of each quarter. The quoted rate is 10 percent, and the principal must be repaid at the end of the year. A second lender offers 9 percent, daily compoundin
Joe's preferred stock currently has a market price equal to $80 per share. If the dividend paid on this stock is $6 per share, what is the required rate of return investors are demanding from Joe's preferred stock?
Provide a short justification the following: The current price of Digital stock is $44 a share. You are offered a forward price for Digital stock to be delivered in one year of $42. The forward price is lower than the spot price because the market anticipates a sharp decline in the price of Digital stock, and the contract of
1. The price of the stock of Clarkson Corporation went from $50 to $56 last year. The firm also paid $2 in dividend. Compute the rate of return. 2. In the following year, the dividend was raised to $2.25. However, a bear market developed toward the end of the year, and the stock price declined from $56 at the beginning of the
As the cost of capital is increased, the: a. IRR remains constant. b. Payback period remains the same. c. Discounted payback period increases. d. Both "b" and c. e. All of the above In the event that Zoldt Corporation, which has a low P/E ratio, were to acquire Sky Corporation, whi
1. Zelo, Inc. stock has a beta of 1.23. The risk-free rate of return is 4.5% and the market rate of return is 10%. What is the amount of the risk premium on Zelo stock? (Points: 3) 4.47% 5.50% 5.54% 6.77% 12.30% 2. You are comparing stock A to stock B. Given the following in
Corporate Bonds 13-1 The initial proceeds per bond, the size of the issue, the initial maturity of the bond, and the years remaining to maturity are shown in the following table for a number of bonds. In each case, the firm is in the 40 percent tax bracket, and the bond has a $1,000 par value. Bond Proceeds per Size of
1. Define the following: term loan, balloon payment, collateral, and stock purchase warrants. 2. What fraction of U.S. public companies pays regular cash dividends today? How has this changed over the past 50 years?
Use the following industry average ratios to construct a pro forma balance sheet for Carlos Menza, Inc. Total asset turnover 2 times Average collection period (assume a 365-day year) 9 days Fixed asset turnover 5 times Inventory turnover (based on cost of goods sold) 3 times Current ratio 2 times S
Growing Pains - External Financing Case 4 Growing Pains "We must plan for the future," said Vicky. "I think we've been playing it by ear for too long." Mason immediately called the treasurer, Jim Moroney. "Jim, I need to know how much additional funding we are going to need for the next year," said Mason. "The growth
What are financial markets? What function do they perform? How would an economy be worse off without them? Define in a technical sense what we mean by financial intermediary. Give an example of your definition. Distinguish between the money and capital markets. What major benefits do corporations and investors enjoy bec
Joy Medical Company is a little-known producer of heart pacemakers. The earnings and dividend growth prospects of the company are disputed by analysts. Jimmy is forecasting 5% growth in dividends indefinitely. However, Susan is predicting a 20% growth in dividends, but only for the next three years, after which the growth rat
4. Brinker, Inc. has been investing $136,000 a year for the past 4 years into a business venture. Today, Brinker sold that venture for $685,000. What is its rate of return on this venture? 9.43% 11.06% 15.59% 16.67% 18.71%
Peter borrows a loan of $328,337.1919 from George. The loan will be repaid over the coming 24 years, starting from the end of the next years. The real interest expense for the first year is $15,785.44189. Expected inflation rate is assumed at 4% per annum. After receiving the annual installment, George will reinvest it immedi
10. If a country's government imposes a tariff on imported goods, that country's current account balance will likely __________ (assuming no retaliation by other governments). a. decrease b. increase c. remain unaffected d. either A or C are possible 12. The U.S. typically has a balance-of-trade surplus in its trade with
Question 7: (15 points) Calculating Financial Ratios Just Dew It Corporation reports the following balance sheet information for 2004 and 2005. JUST DEW IT CORPORATION 2006 and 2007 Balance Sheets Assets Liabilities and Owners' Equity 2006 2007 2006 2007 Current assets Current liabilities Cash $
Bunyan Lumber, LLC, harvests timber and delivers logs to timber mills for sale. The company was founded 70 years ago by Pete Bunyan. The current CEO is Paula Bunyan, the granddaughter of the founder. The company is currently evaluating a 5,000 acre forest it owns in Oregon. Paula has asked Steve Boles, the company's finance offi
Problem: Total Revenue (TR) =$30Q Total Cost (TC) =$1,500 + $2Q(fixed + Variable/unit) What is the break-even level of output? What are the profit or losses if the firm sells 1,300 units?
Question 1: A company makes a single product that it sells for $18 per unit. Fixed costs are $76,000 per month and the product has a contribution margin ratio of 40%. If the company's actual sales are $238,000, its margin of safety is: (Round your intermediate calculation to the nearest dollar amount.) $52,000