McGonnigal, InMcGonnigal, Inc. has expected sales of $40 million. Fixed operating costs are $5 million and the variable cost ratio is 65 percent. McGonnigal has outstanding a $10 million , 10 percent bank loan amd $3 million in 12 percent coupon-rate bonds. McGonnigal has outstanding 250,000 shares of $10 (dividend) p
13-3 Risk analysis a. Given the following information, calculate the expected value for Firm C's EPS. Data for Firms A and B are as follows: E(EPSA) = $5.10, and Standard Deviation of Firm A = $3.61; E(EPSB) = $4.20, and Standard Deviation of Firm B = $2.96.
Your company's weighted average cost of capital is 11%. You believe the company should make a particular investment, but the IRR of this investment is only 9%. What arguments might exist in support of your position? Is it really possible that making an investment with a return below your firm's cost of capital can ever c
A $100,000 dollars is available to invest in portfolio containing stock X. stock Y, and a risk-free asset. All of the money must be invested. The goal is to create a portfolio that has an expected return of 12.5 and that has only 60 % of the risk of the overall market. If X has an expected return of 31 % and a beta of 1.8, Y has
You are an analyst following two companies, Company X and Company Y. You have collected the following information: -The two companies have the same total assets. -Company X has a higher total assets turnover than Company Y. -Company X has a higher profit margin than Company Y. -Company Y has a higher inventory turnover rat
I. Question Details: Spreadsheet Exercise: Jane is considering investing in three different stocks or creating three distinct two-stock portfolios. Jane considers herself to be a rather conservative investor. She is able to obtain forecasted returns for the three securities for the years 2007 through 2013. The data are a
Winners Inc., a home appliances manufacturer, expects sales of 20,000 units at $5 per unit in the coming year and must meet the following obligations: Variable operating costs of $2 per unit, fixed operating costs of $10,000, interest of $20,000, and preferred stock dividends of $12,000. The firm is in the 40% tax bracket
Using historical daily returns, you estimated the following Index model for ET incorporated: rET = .01% + 1.75 r S&P500 On February 15, 2007, ET announced its intention to buy back 1,000,000 of its 5,000,000 outstanding shares in the open market. ET stock price closed 3% higher than the close on February 14. How much of the
Your company is expected to earn $4.0 million in net income next year of which it will pay out 40% in dividends. If equity represents 50% of your capital, what is the breakpoint on the MCC where new stock will have to be issued? a. $2.4 million b. $3.2 million c. $4.0 million d. $4.8 million e. $8.0 million
Kermit's Hardware's (KH) fixed operating costs are $20.8 million and its variable cost ratio is 0.30. The firm has $10 million in bonds outstanding with a coupon interest rate of 9%. KH has 200,000 shares of common stock outstanding. The firm has revenues of $32.2 million and its marginal tax rate is 40%. Compute KH's degree of
Omega Sports has the following equity accounts on its balance sheet: Common stock ($.50 par, 900,000 shares) $ 450,000 Paid in excess 5,580,000 Retained earnings 21,204,000 Total common stockholders' equity $27,234,000 The current market price of the firm's shares is $20. If the firm declares
Sue and Tom Wright are assistant professors at the local university. They each take home about $40,000 per year after taxes. Sue is 37 years of age, and Tom is 35. Their two children, Mike and Karen, are 13 and 11. Were either one to die, they estimate that the remaining family members would need about 75% of the present comb
Nancy Tai has recently opened a revolving charge account with MasterCard. Her credit limit is $1000, but she has not charged that much since opening the account. Nancy hasn't had the time to review her monthly statements as promptly as she should, but over the upcoming weekend, she plans to catch up on her work. In reviewing
Problem 1: A loan was made 10 years ago with an original balance of $1,000,000.00 at a fixed interest rate of 8.00% with equal monthly payments for 30 years. A. How much is the monthly payment? B. What is the balance today? C. What will the balance be at the end of 5 more years? D. When will the balance be paid down to 50
1) A year ago, a friend of yours made a loan to a reliable local business you have both known for many years. The business is doing well, and looks very likely to pay back the loan. Your friend now needs to raise some cash urgently for other business investments, and wishes to sell her loan on to someone. Interest rates are 5% a
Jay Linoleum Company has fixed costs of $70,000. Its product currently sells for $4 per unit and has variable costs per unit of $2.60. Mr. Thomas, the head of manufacturing, proposes to buy new equipment that will cost $300,000 and drive up fixed costs to $105,000. Although the price will remain at $4 per unit, the increased aut
Discuss the limitations of financial leverage?
When does insider trading occur? What government agency is responsible for protecting against the unethical practice of insider trading?
The Seneca Maintenance Company currently (as of year 0) pays a common stock dividend of $1.50 per share. Dividends are expected to grow at a rate of 11% per year for the next four years and then to continue growing thereafter at a rate of 5% per year. What is the current value of a share of Seneca common stock to an investor w
Solving Financial Accounting Problems Using Microsoft Excel for Windows by Rex A Schildhouse. See attached file for full problem description. Problem P2-3A, Chambers Brokerage Services, Inc. was formed on May 1, 2006. The following transactions took place during the first month. 1. Stockholders in
Help identify debits, credits, and normal balances. E2-1 H. Burns, Inc. Account Debited Account Credited Date Basic Type Specific Amount Effect Normal Balance Basic Type Specific Amount Effect Normal Balance Jan. 2 Asset Cash Increase Debit Stockholders Equity Common Stock Increase C
See attached file for full problem description. Managerial Finance Week 4 Dropbox Chapter 6 Stock X a) b) Stock Y a) b) Probability Return Rate/Return Stand Dev Probability Return Rate/Return Stand Dev 0.1 -0.1 0.2 0.02 0.4 0.2 10 0.2 7 1.4 0.4 15 0.3
LISP Inc. is planning to purchase a new mixer/dubber for $50,000. The new equipment will replace an older mixer that has been fully depreciated but has a salvage value of $5,000. Compute the net investment required for this project. Assume a marginal tax rate of 40 percent. a. $47,000 b. $45,000 c. $48,000 d. none of the abo
A. Calculate R & E Supplies' sustainable growth rate in each year from 2003 - 2006. Table 3.1 presents R&E Supplies' financial statements for the period 2002 - 2005, and Table 3.5 presents a pro formula forecast for 2006. See attached file for full problem description.
Elston Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2002, its first year of operation the company has the following stock transactions: Jan 15 Issued 500,000 shares of stock at $5 per share Jan 30 Attorneys for the company accepted 500 shares of common stock as payment of legal ser
I have three stocks to compare and must create a table to do so. Can anyone help me? I have to include the following information: Company name and symbol Current share price (last close of the preceding day) 52 week highs and lows Market Capitalization (large, mid, or small cap) Industry Current P/E Dividend Rate
1) The following table provides month end prices and cash dividends from Exxon Mobil (XOM) for a recent two year period. Use these data to complete the following analyses. Date Price Dividend Dec-06 76.63 Nov-06 76.81 0.32 Oct-06 71.42 Sep-06 67.1 Aug-06 67.67 0.32
5. In an effort to track the local economy Finance 327 has decided to create a San Diego stock market index. The index will be made up of four local stocks Sempra Energy (Ticker Symbol: SRE), Jack in the Box (JBX), Qualcomm (QCOM) and Diversa (DVSA). Download the historical prices from January 1, 2006 through December 31, 2006 f
Ratings: Course Professor Statistics Management Finance Economics Anderson 90 65 95 40 Sweeney 70 60 80 75 Williams 85 40 80 60 McKinney 55 80 65 55
Based on Ford Motor CompanyS a. Determine the five-year average. b. Identify the industry. c. Determine the average five-year average return. d. Identify three additional stocks in each industry and determine the five-year average return. e. Compare performance to those in the same indu