I need your help with the definition on Debt Equity Mix and I also need your help answering this questions: Why is debt a comparatively cheaper form of finance than equity? If debt is cheaper than equity, why do companies approach the equity markets? Can one minimize WACC when ther is a constraint on raising debt? If so
I need your help with this question its on Risk and Return and it is a True or False and I need your help explaining or qualifying the answer. a. The expected rate of return on an investment with a beta of 2 is twice as high as the expected rate of return of the market portfolio. If there are abreviations or formulas used
What are the primary weaknesses of sensitivity analysis? What are its primary advantages?
State your position on this issue: Pharmaceutical companies are unfair in charging prices that so far exceed the costs of the chemicals in their products, especially in lifesaving drugs. What are your thoughts on this?
Identify the main factors that led to the collapse of the Thai baht in 1997?
Question 4: Financial Measurements in manufacturing. The PQ Piston Plant makes two sizes of pistons for reciprocating engines. Their plant has four machines. Currently, the demand for their products is 100 'p" pistons per week:, and 50 "Q" pistons per week. The financial information for these products is as follows: Product P
Finance Example - Break Even Analysis. The break even point for a business is given by the formula: B = F/P-V where: B = units sold to breakeven point F = fixed costs P = price per unit V = variable costs Suppose EducateComp knows its fixed costs are $100,000, its variable costs are $500 per copy of AlgeComp, and
Basically for this assignment you need to have knowledge of the following topics: •Capital budgeting techniques •Use of discounting tables •Types of risk – Business risk, break even and financial risk •Sources of finance •Portfolio theory •Portfolio standard deviation The actu
Can you help me with this problem: Cain Auto Supplies and Able Auto Parts are competitors in the aftermarket for auto supplies. The seperate capital structures for Cain and Able are presented below: Cain Debt @10%...............$50,000 Common Stock, $10 par.....100,000 Total................................$150,000 C
Can you help me with the following problem: The Harding company manufactures skates. The company's income statement for 2001 is as follows: HARDING COMPANY Income statement For the Year Ended December 31, 2001 Sales (10,000 skates @$50 each).....................
I have been struggling to find various topics to do research on in terms of Finance. Could you please give me some ideas or topics that i can start with?
I need your help finding the answer to the folloing problems: Shock Electronics sells portable heaters for $25 per unit, and the variable cost to produce them is $17. Mr. Amps estimates that the fixed costs are $96,000. a.) How do I compute the break-even point in units? b.) How do I fill in the table below (in
Which of the following is not a direct result of a stock dividend? a. the number of shares outstanding is increased b. the market share of each outstanding share is increased c. the amounts shown in the firm's capital accounts are redistributed d. a and b
Illinois Tool Company's (ITC) fixed operating costs are $1,260,000 and its variable cost ratio (ie. variable costs are as a fraction of sales) is 0.70. The firm has $3,000,000 in bonds outstanding at an interest rate of 8%. ITC has 30,000 shares of $5 preferred stock and 150,000 shares of common stock outstanding. ITC is in the
I need help finding the answers to the follwing: How do I describe the importance of internal control programs, and how do I identify effective internal control techniques? How can I Illustrate the relationship between ethics and internal control techniques, and how do I describe the importance of the Sarbanes-Oxley Act? I do
I need your help finding the answers to the following problems: LOCK BOXES: Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. she forecasts that 400 payments a day will be made to lock boxes with an average payment size of $2,000. The bank's charge for operating the lock
The last dividend paid by Klein Company was $2.00 (that is Dο=$2.00). Klein's growth rate is expected to be a constant 5% for next three years, after which dividends are expected to grow at a rate of 10% forever. Klein's required rate of return on equity is 16%. What will be the price of Klein's common stock two years from toda
The stock of Robotic Atlanta Inc. is trading at $40 per share. In the past, the firm has paid a constant dividend of $5 per share and it has just paid an annual dividend. However, the company will announce today new investments that the market does not know about. It is expected that with these new investments, the dividends wil
Your younger sister will start college in five years. She has just informed your parents that she wants to go to Harvard University, which will cost $18,000 per year for four years (cost assumed to come at the end of each year). Your parents will start saving an equal amount every year for next four years to pay for her tuition.
You bought a new Lan Rover for $67,000 on October 31, 1999. The down payment was $15,000. A bank financed the remaining balance at 12 percent interest rate for 60 months with monthly payments. The first payment was made one month from the purchase date. If the interest on the loan is tax-deductible, you will need to figure out t
You will need to pay for your son's private school tuition (first grade through 12th grade) a sum of $8,000 per year for Years 1 through 6, $10,000 per year for years 7 through 12. Assume that all payments are made at the beginning of the year, that is, tuition for Year 1 is paid now. (i.e., at t=0), tuition for Year 2 is paid o
This questions must be answered by someone expert in accounting and finances. Thanks Please answer the questios and enter the correct formulas in each question asked for those formulas. Thanks
A decrease in the debt ratio will normally have no effect on a. Financial risk b. Total risk c. Business risk d. Systematic risk e. Firm-unique risk.
Strategic Systems Inc. expects to have net income of $800,000 during the next year. Its target, the current, capital structure is 40 percent debt and 60 percent common equity. The Director of Capital Budgeting has determined that the optimal capital budget for next year is $1.2 million. If Strategic uses the residual dividend mo
The Altman Company has a debt ratio of 33.33 percent, and it needs to raise $100,000 to expand. Management feels that an optimal debt ratio would be 16.67 percent. Sales are currently $750,000, and the total assets turnover is 7.5. How should the expansion be financed so as to produce the desired debt ratio? a. 100% equity
In theory the decision maker should view market risk as being of primary importance. However, within-firm, or corporate, risk is relevant to a firm's a. Well diversified stockholders, because it may affect debt capacity and operating income. b. Management, because it affects job stability. c. Creditors, because it a
You are considering the purchase of an investment that would pay you $5,000 per year for years 1-5, $3,000 per year for years 6-8, and $2,000 per year for years 9 and 10. If you require a 14 percent rate of return, and the cash flows occur at the end of each year, then how much should you be willing to pay for this investment?
Michigan Mattress Company is considering the purchase of land and the construction of a new plant. The land, which would be bought immediately (at t = 0), has a cost of $100,000 and the building, which would be erected at the end of the first year (t = 1), would cost $500,000. It is estimated that the firm's after-tax cash flow
Your company's stock sells for $50 per share, its last dividend (Do) was $2.00, its growth rate is a constant 5 percent, and the company will incur a floating rate cost of 15 percent if it sells new stock. What is the firm's cost of new equity, ke? a. 9.20% b. 9.94% c. 10.50% d. 11.75% e. 12.30%
Allegheny Publishing's stock is expected to pay a year-end dividend, D1, of $4.00. The dividend is expected to grow at a constant rate of 8 percent per year, and the stock's required rate of return is 12 percent. Given this information, what is the expected price of the stock, eight years from now? a. $200.00 b. $185.09