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    Cats and Dogs Company

    The following cash transactions took place during March, the first month of business for Cats and Dogs Company 1.D.C. Dawg started a business, Cats and Dogs Company, by contributing $6,000. 2.The Cats and Dogs Company borrowed $2,000 from the bank on March 1. The note is a 1-year, 12% note, with both principal and interest

    Effective Annual Rates

    The 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. What is the effective annual rates (EFF%) charged by the bank?

    Finance - For markets to be in equilibrium:

    For markets to be in equilibrium (that is, for there to be no strong pressure for prices to depart from their current levels), a. The expected rate of return must be equal to the required rate of return; that is, . b. The past realized rate of return must be equal to the expected rate of return; that is, . c. The required r

    Calculating a Project's NPV

    A new, more efficient machine will last four years and allow inventory levels to decrease by $100,000 during its life. At a cost of capital of 13%, how does the net working capital change affect the project's NPV?

    Northwestern Savings and Loan

    P11-10 Degree of financial leverage Northwestern Savings and Loan has a current capital structure consisting of $250,000 of 16% (annual interest) debt and 2,000 shares of common stock. The firm pays taxes at the rate of 40%. a. Using EBIT values of $80,000 and $120,000, determine the associated earnings per share (EPS). b.

    Calculating Break-Even for Grey Products

    P11-7 Degree of operating leverage Grey Products has fixed operating costs of $380,000, variable operating costs of $16 per unit, and a selling price of $63.50 per unit. a. Calculate the operating breakeven point in units. b. Calculate the firm's EBIT at 9,000, 10,000, and 11,000 units, respectively. c. With 10,000 units as a

    Managerial Finance and EBIT Sales

    P11-6 EBIT sensitivity Stewart Industries sells its finished product for $9 per unit. Its fixed operating costs are $20,000, and the variable operating cost per unit is $5. a. Calculate the firm's earnings before interest and taxes (EBIT) for sales of 10,000 units. b. Calculate the firm's EBIT for sales of 8,000 and 12,000 u

    P4-43 Managerial Finance Gittman

    P4-43 Loan amortization schedule Joan Messineo borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year payments. a. Calculate the annual, end-of-year loan payment. b. Prepare a loan amortization schedule showing the interest and principal break

    Finance : Depreciation and Amortization

    Value of the vehicle V depreciates T Months later V=10,000(.95)^t [for 0<T<36] How much is the depreciation? (those are less than or equal to signs) I already did the amort. portion. I need help with the depreciation. *The value should be 10,000 not 1000 as indicated in the problem. I have a Finance problem. It is time t

    Stock Values and Growth Opportunities - Brennan Co

    I need to see intermediate steps and formulas. Stock Values The Brennan Co. just paid a dividend of $1.40 per share on its stock. The dividends are expected to grow at a constant rate of 6% per year indefinitely. If investors require a 12% return on the Brennan Co. stock, what is the current price? What will the price be i

    Types of Payment Lag

    If the lag between purchase date and the date at which payment is due is known as the terms lag and the lag between the due date and the date on which the buyer actually pays is termed the due lag, and the lag between the purchase and actual payment dates is the pay lag. Then Pay lag = terms lag + due lag How would you

    Stock Values and Growth Opportunities

    I need to have the formulas and intermediate steps provided along with the answers. 1. Stock Values The Brennan Co. just paid a dividend of $1.40 per share on its stock. The dividends are expected to grow at a constant rate of 6% per year indefinitely. If investors require a 12% return on the Brennan Co. stock, what is the c

    Investment Questions

    1. Sam's Company expects to pay a dividend of $6 per share at the end of year one, $9 per share at the end of year two, and then be sold for $136 per share at the end of year two. If the required rate on the stock is 20%, what is the current value of the stock? 2. FastGrow is a no growth firm and has 2 million

    Orginal Issue Price and What is the Current Value

    Stock was issued several years agao and carried a fixed dividend of $6 per share. Over time, the yields have gone from 6 % to 14% (RRR). What was the orginal issue price and what is the current value of this preferred stock?

    Managerial Finance - Sam Jones

    Sam Jones is a pharmacist earning $90,000 per year and he is deciding whether to purchase a pharmacy and become the owner/manager of a business that generates revenue of $500,000 per year. The pharmacy has expenses of $200,000/yr. for supplies, $75,000/yr. for hired help, $50,000/yr. for rent, and $10,000 for utilities. You m

    Break even Point for Andre's Hair Stylling

    Andre has asked you to evaluate his business, Andre's Hair Stylling. Andre has five barbers working for him. (Andre is not one of them.) Each barber is paid $9.90 per hour and works a 40-hour week and a 50-week year, regardless of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Hair shampoo used on al

    Working with Portfolio Betas

    Suppose you hold a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio beta is equal to 1.12. Now, suppose you have decided to sell one of the stocks in your portfolio with a beta equal to 1.0 for $7,500 and to use these proceeds to buy another stock for your portfolio.

    Expected Return

    The market and Stock J have the following probability distributions: Probability rm rj 0.3 15% 20% 0.4 9 5 0.3 18 12 A. Calculate the expected rates of return for the market and Stock J. B. Calculate the standard deviations for the market and Stock J. C. Calculate the coefficient of variat

    Expected return, standard deviation and coeff of variation

    A sot's return has the following distribution: Demand for the Probability of this Rate of Return Company's Products Demand Occurring if This Demand Occurs Weak 0.1 (50%) Below average 0.2 (5) Average 0.4 16 Above average 0.2 25 Strong 0.1 60 1.0 Calculate the stock's expected retur

    Common Stock

    JF Company issued 10,000 shares of $15 par common stock on Feb 1, 2007 for $20 per share. The company bought back 2000 shares when the share price fell to $16 per share on Aug 31, 2007 and then resold 1000 shares when the price rebounded to $22 per share on Dec 15, 2007. JF accounts for its treasury stock transactions using th

    Stock Projections

    Garrett Corp. has been going through a difficult financial period. Over the past three year, its stock price has dropped from $50 to $18 per share. Throughout this downturn, Garrett has managed to pay a $1 dividend each year. Management feels the worst is over but intends to maintain the $1 dividend for three more years, after w

    Common Stock

    A corporation issues 2,000 shares of common stock for $ 32,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for My answer is $32,000 Am I correct? When the market rate of interest was 12%, Newman Corporation issued $1,000,000, 11

    Retained Earnings: Mary Brown Inc.

    Assume that Mary Brown Inc. hired you as a consultant to help it estimate the cost of capital. You have been provided with the following data: Do = $1.20 Po = $40.00 and g = 7%(constant) Based on the DCF approach, what is Brown's cost of equity from retained earnings.

    Break-even

    Why would a project that reaches the break-even point in terms of net income potentially be bad for shareholders

    Margin Buying

    Discuss margin buying of common stocks. Include in your discussion the advantages and disadvantages, the types of margin requirements, how these requirements are met, and who determines these requirements.

    Connors Company - Current stock price

    The Connors Company last dividend was $1.00. Its divident growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 10% forever. Connors required return(rs) is 12%. What is Connors' current stock price?

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