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    Estimating the current and expected stock price

    The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Investors require a return of 10 percent on the company's stock. What is the current stock price? What will the stock price be in three years?

    Trading Sites, DRIPs and Bonds

    Research Online Trading Sites and DRIPs you will evaluate the choices in purchasing stock via online brokerage accounts (where you can buy and sell stock via the Internet) and the use of dividend reinvestment plans (known as DIPs and DRIPs) or mutual funds or index funds. For online brokers, you will be looking for the requir

    Beginner Stocks and Bonds Knowledge

    1. Contrast the differences/similarities of common stocks and bonds. Explain how they would be used in the corporate environment. 2. With all investments, there are an expected percentage return and certain types of return that can be expected. Describe the possible forms in which a return could be received for bonds, commo

    Calculate the current yield, YTM and effective annual yield

    Martin Software has 9.4 percent coupon bonds on the market with 19 years to maturity. The bonds make semi-annual payments and currently sell for 107.5 percent of par. a. What is the current yield on the bonds? b. What is the YTM? c. What is the effective annual yield?

    CVP Analysis

    Zan Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processing experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, wash

    Present Value of Cash-flows

    You just signed a consulting contract that will pay you $38,000, $52,000, and $85,000 annually at the end of the next three years, respectively. What is the present value of these cash flows given a 10.5 percent discount rate? $157,131 $154,880 $139,975 $148,307 $162,910

    Security Valuation Models

    1. $1,000 face amount bonds of Stalwart Development Corp. are quoted at a price of 102.2 and carry a 6.50 percent coupon. The bonds pay interest semiannually. What is the current yield on one of these bonds? The answer should be a percent 2. A 20-year, 4.8 percent, semiannual coupon bond issued by Cascade has a $1,000 face

    Working Capital Cash Flow Cycle

    Strickler technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 9.0 times during the year, and its DSO was 41 days. Its annual cost of goods sold was $1,895,000. Th

    Ratios and Fixed Assets: The Burk Company Solve LT assets

    Solving for missing pieces in a ratio The Burk Company has the following data: Long-term debt to long-term debt plus equity of 0.6 Current ratio of 1.35 Liabilities are $950 Sales are $4,140 Profit margin is 9.5 percent ROE is 22 percent. Solve for long term assets (net fixed assets).

    Present Value of Lottery Winnings

    You have just received notification that you have won the $1.4 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday, 78 years from now. The appropriate discount rate is 8 percent. What is the present value of your winnings?

    Making Investment Decisions with NPV

    The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A Machine B 0 $40,000 $50,000 1 10,000 8,000 2 1

    Bonds and Coupon Rates

    1. AR store issued 15 year bonds one year ago at a coupon rate of 6.1%. The bonds make semi-annual payments. If the YTM on these bonds is 5.3%, what is the current bond price? 2. NH Co. issued 15 year bonds two years ago at a coupon rate of 8.4%. The bonds make semi-annual payments. If these bonds currently sell for 108%

    Finance: Coupon Rates

    I need help with the following: 1. Is the yield to maturity on a bond the same thing as the required return? Is YTM the same thing as the coupon rate? Suppose today a 10% coupon bond sells at par? Two years from now the required return on the same bond is 8%. What is the coupon rate on the bond now? The YTM? 2. Suppos

    Equity, capital structure, WACC, after-tax cost of debt, stock, and leverage

    True/False- 1. The firm's cost of external equity capital is the same as the required rate of return on the firms outstanding common stock_________ 2. Funds acquired by the firm through retaining earnings have no cost because there are no dividend or interest payments associated with them, but capital raised by selling new sto

    Mini-Case Study: Bullock Gold Mining

    Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company's geologist, has just finished his analysis of the mine site. He has estimated that the mine would be more productive for either year, after which the gold would be completely mined. Dan has taken an estimate

    Time Value of Money problems

    1. Future Value. What is the future value of a. $800 invested for 14 years at 11 percent compounded annually? b. $210 invested for 8 years at 9 percent compounded annually? c. $650 invested for 12 years at 8 percent compounded annually? 2. Present Value. What is the present value of a. $803 to be received 18 years from

    Management of Financial Institutions Questions

    1.Identify two financial intermediaries. What are their respective functions? What are their major roles in the economy? 2.What are the money markets and what are the capital markets? How do they differ? What are their respective activities? 3.If an asset is called a derivative, what does that mean? Explain your answer an

    GAAP and IFRS Comparison

    Exercise A-2 Lower-of-Cost-or-Market Rule The cost of Baxter's inventory at the end of the year was $50,000. Due to obsolescence, the cost to replace the inventory was only $40,000. Net realizable value—what the inventory could be sold for—is $42,000. Determine the amount Baxter should report on its year-end balance she

    British Petroleum Investment Analysis and Recommendation

    Please establish an estimated growth rate in earnings and dividends for British Petroleum (BP). Note, in the dividend growth model, "g" is the growth rate for earnings AND dividends. You might want to check historical growth rates for BP (in terms of earnings and dividends). Also, many people rely on analyst forecasts. Be sure t

    Purchasing power parity and exchange rates

    Question 1: Starbucks opened its first store in Zagreb, Croatia in October 2010. The price of a tall vanilla latte in Zagreb is 25.70kn. In New York City, the price of a tall vanilla latte is $2.65. The exchange rate between Croatian kunas (kn) and U.S. dollars is kn5.6288/$. According to purchasing power parity, is the C

    Internal Rate of Return Calculation

    Jacob has an opportunity to invest in a new retail development in his building. The initial investment is $50,000 and the expected cash-flows are as follows: Year 1: $2,500 Year 2: $5,000 Year 3: $5,000 Year 4: $7,500 Year 5: $10,000 Year 6: $10,000 Year 7: $15,000 Year 8: $15,000 What is Jacob's IRR on this investment? (No more

    Operating Income, Value, and Profits

    9.12 Operating income versus net income Refer to the selected financial data ( five-year financial summary) on page 709 of the Campbell Soup Company annual report in the appendix. Required: Compare the trend of the operating income ( earnings before interest and taxes) data with the trend of net income ( net earnings attribut

    Types of Corporate Business

    I need some assistance defining the pros and cons of general corporations, Subchapter S Corporations, and Liability Corporations. Also, when an entrepreneur starts a new business what choice of business is the best: - Sole proprietary - Partnership - Corporation

    Stockpile Resource Planning (SRP) and Oracle

    Review and Explain how the Stockpile Resource Planning (SRP) relate to the Oracle Financial modules make recommendations or Summary and give examples. (Gaps/Fit) Measurable Outcome for both. See the attached file.

    Profit Exchange Rate

    Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.5803S$/US$. You have just placed an order for 30,000 motherboards at a cost to you of 170.90 Singapore dollars each. You will pay for the shipment when it arrives in 120 days. You can sell the motherboards for $148 each. What will

    Choose the correct option

    One year ago, you purchased 400 shares of Analog Devices, Inc. stock for $13.95 a share. You received a total of $120 in dividends and sold the stock for $7,072 today. What is your capital gains yield on this stock? 26.71 percent 26.74 percent 28.85 percent 28.89 percent 31.03 percent The common stock of Baxter