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    Stock question

    Which of the following statements is most correct? a. The before-tax cost of preferred stock may be lower than the before-tax cost of debt, even though preferred stock is riskier than debt. b. If a company's stock price increases, this increases its cost of common stock. c. If the cost of equity capital increases, it must b

    Calculating Maximum Growth Rate

    Please show calculations. The Tapley Company is trying to determine an acceptable growth rate in sales. While the firm wants to expand, it does not want to use any external funds to support such expansion due to the particularly high interest rates in the market now. Having gathered the following data for the firm, what is

    Lone Star's Plastics EBIT

    Please show calculations. Lone Star Plastics has the following data: Assets: $100,000; Profit margin: 6.0%; Tax rate: 40%; Debt ratio: 40.0%; Interest rate: 8.0%: Total assets turnover: 3.0. What is Lone Star's EBIT? a. $ 3,200 b. $12,000 c. $18,000 d. $30,000 e. $33,200

    Company's cost of debt

    A company has just been taken over by new management which believes that it can raise earnings before taxes (EBT) from $600 to $1,000, merely by cutting overtime pay and thus reducing the cost of goods sold. Prior to the change, the following data applied: Total assets: $8,000 Debt ratio: 45% Tax rate:

    Charitable contribution problem

    Kelly has AGI of $100,000 in 2006. She contributes stock in Tulip Corp. (a publicly traded corp.) to a State University (a qualified charitable org.) The stock is worth $59000 & she acquired it as an investment 2 years ago at a cost of $44,000. 1. What is the total amount that kelly can deduct as a charitable contribution, as

    Economic benefit

    Investors may receive an economic benefit from the ownership of stock by: Receiving interest. Receiving dividends. Receiving capital gains. Both b and c, but not a

    Mr Blochirt investment

    Mr. Blochirt is creating a college investment fund for his daughter. He will put in $850 per year for the next 15 years and expects to earn a 8% annual rate of return. How much money will his daughter have when she starts college? A) $11,250 B) $12,263 C) $24,003 D) $23,079

    Finance Problems: HR Pickett, Liability, and AFN

    Problem #1 The HR Pickett corporation has $500,000 of debt outstanding, and pays an interest rate of 10% annually, Pickett's annual sales are $2 millions, it's average tax rate is 30% , and it's net profit margin on sales 5%. If the company does not maintain a TIE ratio of at least 5 times, it's Bank's will refuse to renew the

    Ratios and Organizations

    How can you compare an organization to its competitors? How can organizations with increasing sales run into financial difficulties? Which ratios might help find this situation?

    Fixed Costs

    How do fixed costs create operating leverage? Why is this significant? How does operating leverage impact the overall risk level of the company?

    Various Finance Questions

    1- What should you consider when comparing fixed assets turnover of one firm to others? In other words, can you simply compare the ratios and explore the differences or should we strive to learn more before conducting such an analysis? 2 - Class, do you think it is easier to manipulate ratios that come from the balance sheet

    Balance Sheets and Income Statements

    I need some assistance in trying to analyze and answer the balance sheet and income statements for the attachment. The following are balance sheets for Scott Company as of the end of the Years 1 and 2: Balance Sheet Year 2 Year 1 Cash 189 50 Accounts Receivable 950 750 Inventory 500

    Economic Unit Concept

    When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land with a book value of $70,000 and a fair market value of $100,000. 11. What amount should have been reported for the land on a consolidated balance sheet, assuming the economic unit concept was used? A) $ 70,000 B) $ 75,000 C) $ 85,000

    Predatory Home Lending

    As a homeowner, you often receive solicitations to open a home equity line of credit. They are enticing, but you know that a growing number of Americans have lost their homes in recent years due to becoming victim to predatory lenders. Some of these victims are consumers who try to free themselves from credit card debt through a

    Bank Loan - Analysis of Small Businesses

    SCENARIO 1 Mrs. Kumal Mubarek is the CEO of a small business in Bangladesh that produces mattresses. To keep up with increasing demand, she needed a bank loan to help build her company's capacity. But the bank she approached denied her loan application for whatever reason and she does not know where to turn. What would you do?

    Finance net income and receivables turnover

    If a company can expect an extra $2 million in sales if it enters a new market and it knows that 15% of its sales will be uncollectible, collection costs will be 2% on all new sales, and the company's production and selling costs are 80% of sales and it also has a tax rate of 30%, what will the company's net income be. Also

    Additional Funds Needed with Excess Capacity

    Sales for the year just ended were $400, and fixed assets were used at 80 percent of capacity, but its current assets were at optimal levels. Sales are expected to grow by 5 percent next year, and the dividend payout ratio is 60 percent. How much additional funds (APN) will be needed? A firm has the following balance sheet (s

    Amortization of long lived assets -Straight line method.

    Comprehensive problem on amortization: 1st January 2006, Maple Leaf Corporation reported the following property, plant, equipments. Assets Cost Estimated life Salvage value Accumulated amortization Land 4500000 N.A. Nil Building 6000000 40 years Nil 3300000 Equipment 2000000 10 years Nil 1250000 During 2006 followi

    Management of a Firm

    The factors that are listed below raise some interesting thoughts. If you were calling the shots for any organization where would you focus your attention? Management Attitudes: There is room for managerial judgment (i.e., tastes and preferences) in determining a firm's optimal capital structure. Where do you stand on this is

    Question about functions of financial markets

    What are the functions of the major financial markets? What is the difference between the primary and secondary markets? What is the difference between the capital markets and the money markets?

    Corporate finance

    Every company has capital projects. IBM must need something! Be it a new wing to the building, a new product line to be funded, a new piece of equipment, find one new acquisition your company needs. Identify a capital project for IBM and Once you have identified the new budgeted item, what problems are you going to have getti

    Calculating Financial Ratios in Excel

    Use the information contained in your selected organization's balance sheet and income statement to calculate the following ratios: 1) Liquidity ratios a) Current ratio b) Acid-test (quick) ratio c) Receivables turnover d) Inventory turnover 2) Profitability ratios a) Asset t

    Begining Finance - Financial Statements

    See attached file for full problem description. Study Guide- ch 2 Practice 2-7 Income Statement Preparation Precision Corporation has been a leading supplier of magnetic storage disks for three years. Followingare the results of Precision's operations for 2006. Sales revenue . . . . . . . . . . . . $68,000 Advertising

    Upstream/Downstream Transfers

    What is the impact on consolidated financial statements of upstream and downstream transfers? a. No difference exists in consolidated financial statements between upstream and downstream transfers. b. Downstream transfers affect the computation of the noncontrolling interest's share of the subsidiary's income but upst