Gibson Co. has a current period cash flow of $1.2 million and pays no dividends, and the present value of forecasted future cash flows is $15 million. It is an all-equity-financed company with 1 million shares outstanding. Assume the effective personal tax rate is zero. 1. What is the share price of the Gibson stock? 2. Su
Where would I find a comprehensive list of the following public corporate information: 1. Recently announced stock splits that will be paid to shareholders on a future date 2. Upcoming corporate earnings reports
1. A household with very bad credit wants a credit card. Describe two possible options that might be available to them. 2a. If a corporation wants to lend to another corporation in the direct money market and wants to assume no default risk, describe an appropriate investment. 2b. If a SSU wants to lend in the direct money
During its first year of operations Klump Corporation had the following transactions pertaining to its common stock. Jan 10 Issued 70,000 shares for cash at $5 per share July 1 Issued 40,000 shares for cash at $8 per share (a) Journalize the transactions assuming that the common stock has a par value of $5 per sh
Consider the use of probability analysis in estimating returns and determining the standard deviation. You may use a hypothetical situation and do the calculations or just describe the steps in the process.
X Inc. has just paid a dividend of $3.00, and is now selling for $50 per share. Similar stocks generally earn a 13% return. Assuming that X Inc. is a constant growth stock, what is its expected rate of growth?
Cass inc. stock today for $75.00. You forecast no dividend payment this year but two years from today, you expect a $10 dividend. You plan to sell the stock immediately after receiving the dividend. If you want a return of 15% on the investment, how much must your forecast of the stock price be two years from today?
An explanation of the need for full disclosure in financial reporting, and identify possible consequences of failing to properly disclose certain items in financial statements
A mutual fund manager has a $200,000,000 portfolio with a beta = 1.2. Assume that the risk-free rate is 6 percent and that the market risk premium is also 6 percent. The manager expects to receive an additional $50,000,000 in funds soon. He wants to invest these funds in a variety of stocks. After making these additional inve
Project A Project B Initial Investment 100,000 100,000 Year 1 40,000 10,000 Year 2 40,000 10,000 Year 3 40,000 75,000 Year 4 40,000 85,000 1. If the discount rate is 7%, which of the following is true: a. The firm should accept only project A b. The firm should accept only project B c. The firm should accept both p
A proposed project can generate savings of $1000 per year for 10 years. The initial cost of the project is $2500 and the project has a salvage value of $500 in the 10th year. What is the Net Present Value of the project to the nearest dollar if the discount rate is 10%? keywords: NPV
After watching "Who Wants to be a Millionaire" you have decided you want to join the millionaire's club. Your goal is to have $1,000,000 in 35 years. If you can invest in a mutual fund that will project a 10% return, how much must you invest each year to meet your goal?
You take out a 20-year $150,000 mortgage loan with an APR of 5 percent and monthly payments. In 10 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?
Both Rhonda and Andy have joined your small business owners group and are recounting their troubles with acquiring their finances. This leads to a discussion on the following: Why is it so difficult for most small business owners to raise the capital needed to start, operate, or expand their ventures? How can a firm empl
#1. Ace purchases 40 percent of Baskett Company on January 1 for $500,000. Although not used, this acquisition gave Ace the ability to apply significant influence to the operating and financing policies of Baskett. Baskett reports assets on that date of $1,400,000 with liabilities of $500,000. One building with a seven-year
How did the campaign reform legislation (McCain/Feingold) along with the recent legislation capping private donations impact the way interests organizations and institutional elites transact influence in Washington? How does campaign finance reform correlate to Madison's cure for his concerns regarding factionalism?
Lauren has a margin account and deposits of $50,000. Assuming the initial margin requirements is 40%, and The Gentry shoe corporation is selling at $25.00 per share: How many shares can Lauren purchase using the maximum allowable Margin? What are Lauren's profit (loss) and the return on investment if the price of Gentry's st
John Smith, an associate in your firm, has asked you to help him establish a financial plan for his family's future. John is 38 years old and has been with your firm for two years. Anne, his 42 -year-old-wife, is employed as a psychologist for the local school district. They are childless now but plan on adopting a child in two
Please help with the following problem. What are the cash flows associated with calculating the present value of preferred stock? What are the cash flows associated with calculating the present value of common stock? Why is it more difficult to calculate the present value of common stock than it is to calculate the value of
The Optimal Scam Company would like to see its sales grow at 20 percent for the foreseeable future. Its financial statements for the current year are presented below. Income Statement ($ millions) Balance Sheet ($ millions) Sales 32.00 Current assets 16 Costs 28.97 Fixed assets 16 Gross profit 3.03 Total assets 32 Taxes 1
1. Cheryl Colby, the CFO of Charming Florist Ltd., has created the firm's pro forma balance sheet for the next fiscal year. Sales are projected to grow at 10 percent to the level of $330 million. Current assets, fixed assets, short-term debt, and long-term debt are 25 percent, 150 percent, 40 percent, and 45 percent of the tota
1. If a firm pays its bills with a 30 day delay, what fraction of its purchases will be paid for in the current quarter? in the following quarter? what if its payment delay is 60 days? I get the if it was 60 days it would double. What I don't understand is how to figure out the fraction.
Please discuss all of the following as one complete response: What role(s) do financial institutions play in financial intermediation, why are these roles necessary, and how does the company need to respond to the increased intermediation scrutiny due to the company IPO? Explain financial intermediation and the role of finan
"Who can figure bankers?" Pehr Weisengraf mumbled as he returned to the office of his small candy manufacturing business, Professional Confectioners. "They're willing to lend money only to those business owners who don't really need it. If you can prove you don't need it, they'll throw it at your feet. Unfortunately, we need it,
Adopting a strategy that includes preserving current assets including developing future growth. Looking at: Property and liability insurance for current lifestyle Healthcare and disability insurance Life insurance and estate planning for dependents Retirement planning
Below are summary cash flow statements for three roughly equal-size companies. ($ millions) A B C Net cash flows from operations
The following accounts appear on the Income Statement and Balance Sheet for a Phoenix-based electronics firm. All figures are in thousands. Arrange these accounts into proper statement format, and supply missing values for the accounts indicated. · Cash $13,637 · Total Curre
Martha currently performs for a ballet company that pays her a salary of $30,000 a year. She is considering quitting this job and opening her own dance company. She estimates the annual revenues from the company will be $95,000 and the total annual expenses for operating the company, ignoring payments to Martha, will be $75,00
The correlation between the returns on Ceramics Craftsman, Inc., and the returns on the S&P 500 is 0.675. The variance of the returns on Ceramics Craftsman, Inc., is 0.004225, and the variance of the returns on the S&P 500 is 0.001467. What is the beta of Ceramics Craftsman stock?
North Pole Cruise Lines issued preferred stock many years ago. It carries a fixed dividend of $6 per share. With the passage of time, yields have soared from the original 6 percent to 14 percent (yield is the same as required rate of return). a. What was the original issue price? b. What is the current value of th