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Stock Conversion

Scenario: The tsetsekos Company was planning to finance an expansion. The principal executives of the company all agreed that an industrial company such as theirs should finance growth by means of common stock rather than by debt. However, they felt that the current $42 per share price of the company's common stock did not refle

Price Supply Equations and Equillibrium

For a farm commodity, rye grain in 2002, the price-demand and price supply equations are given by: price - demand equation p= -0.01x + 26.38 price - supply equation p= 0.005x - 9.02 where price is dollars per bushel, and x is in billions of bushels. a. find the quantity of grain supplied at equilibrium. b. Find the pr

Valuation of a Company with a New Product Launch

A company is on the verge of a new product launch. Depending on how well the product does in the marketplace, three possible outcomes for next years valuation are: $210m, $150m or $60m. The risk is diversifiable and the outcomes are equally likely. Assume that the risk free interest rate is 5% and ignore all other market imp

Discussing Finance Companies

Please provide some assistance with this assignment. Considering the following three companies: i) eBay ii) The Clorox Company (CLX) iii) Alaska Air Group, Inc. (NYS: ALK). Upon reviewing total debt/equity ratios, company betas, profitability ratios, company revenue, assets, and liabilities, and the nature of the o

Investment in a Capital Project

Telecom Italia is considering the investment in a capital project. The initial cost in year 0 is $149,000 to be depreciated straight line over 5 years to an expected salvage value of $15,000. The firm's tax rate is 35% and it has an 11% cost of capital (the firm's discount rate, or "hurdle" rate). For this project an additional

Calculating the Current Yield and YTM in the Given Case

Charlotte's Clothing issued a 5 percent bond with a maturity date of 15 years. Five years have passed and the bond is selling for $690. (a)What is the current yield? (b) What id the yeild to maturity? If five years later the yield to maturity is 10 percent, what will be the price of the bond?

Calculating Bond Yields

A bond with 15 years until maturity has a semiannual interest payment of $40. If the bond sells for its par value, what are the bond's current yield and yield to maturity values?

Calculating Return and Variance

Note: Please see the attachment to view the table which is needed for this question. Question: You invest 30% in Ham and 70% in Cheese. Find the return and variance on the portfolio. You must calculate: expected return for both firms; standard deviation or variance (assume it is a population (n observations)) for both firms;

Traditional Finance Paradigm

"As we all saw from this class, many of the building blocks of the traditional finance theory were questioned and challenged when it came to the relevance of such theory to the problems that investors and managers face in the real world every single day. Building blocks like all the risk definitions and tools; and even the whole

Solving Problems in Difficulties in Paying Trade Payables

This case involves the evaluation of Kitty (Hawk Food), Inc., a restaurant food wholesaler in eastern North Carolina. The firm is experiencing difficulty paying trade debt and collecting trade receivables on time, which is causing cashflow difficulties and threatening the creditworthiness of the firm. The case should require 1 t

Income Statement for Marketing Strategy

Regal Flair Enterprises has 2 product lines: jewellery and women's apparel. Cost and revenue data for each product line for the current month are as follows: Product lines

Calculating Healthcare Formulas

What is a sensitivity analysis? How would you use it in planning for future expansions? What role does this kind of analysis play in your work environment and/or your home environment? If you were trying to add a new service to your facility, what ratios would you use to determine if it would be profitable and how long until it

Depreciation and Amortization Problem Set

1. Bay, Inc. purchased a new machine for $50,000 on March 28, 2004. The useful life was expected to be eight years and then they would sell it to the junk yard for $2,000. The machine was sold for $34,000 on October 2, 2008. Assume no depreciation in the year of purchase and a full year of depreciation in the year of sale.

Fieldf/x, TPS, and Investment Decisions

1. What are the advantages that Fieldf/x provides for the owners of professional baseball teams? What are the advantages that Fieldf/x provides for professional baseball players? Are there disadvantages for the players? Support your answers. 2. Discuss the role of a TPS in a service organization. 3. Discuss how the Internet ca

Collection experience improved or declined over period

The CFO has been evaluating his firm's short-term financial management practices. Below are its uncollected balance percentages for the most recent quarter as well as for the previous year's percentages. Month Most Recent Year Previous Year Jan 12% 18% Feb 22%

Calibrated Manufacturing: breakeven, incremental analysis, risk

Calibrated Manufacturing makes an electronic component that is in great demand. The component sells for $20 each. Calibrated's current capacity is 10,000 units per week. For the last few months, however, the company has been receiving new orders at a rate of 14,000 units per week, and now has a substantial backlog. The compa

Prefer that Congress Increase or Decrease the Depreciation?

Montejo Corporation expects sales to be $ 12 million, operating costs other than depreciation are expected to be 75 percent of sales, and depreciation to be $ 1.5 million during the next year. All sales revenues will be collected in cash, and costs other than depreciation must be paid during the year. Montejo's interest expense

Incremental Costs and Benefits

Crafty Tools manufactures an electric motor that is uses in several of its products. Management is considering whether to continue manufacturing the motors or to buy them from an outside source. This is the following information that is available. 1-The company needs 10,000 motors per year. The motors can be purchased from an

Calculate a bid price in the given case.

Dahlia Enterprises needs someone to supply it with 114,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost you $810,000 to install the equipment necessary to start production; you'll depreciate this cost straight-line to zero

Calculations of Discount and Investment Rates

We are purchasing a 28-day Treasury bill, during a normal year (non-leap year), and want to find out both the discount rate and the investment rate. If we purchase the bill for $998, what are the two rates? If we purchase a 91 day Treasury bill for $995, what are the two rates? (Show all work/calculations/formulas.)

Proposal for a Finance Dissertation

I am needing assistance. I am practicing a dissertation process and want to be clear about my knowledge of each component of the process. I am trying to create an overview of a proposal for a finance dissertation based upon using statistical tools for financial research and risk assessment / portfolio theory. At a minimum, the

Methods for Analyzing Financial Ratios

Financial ratios by themselves provide very little information about a firm. We need to compare ratios across firms in similar industry sectors. The two methods for analyzing financial ratios for a firm are: time trend analysis and similar group analysis. Elaborate on how each of these methods can be helpful in understanding how

Convertible Preferred Stock - Pechstein Corporation

Pechstein Corporation issued 2,000 shares of $10 par value common stock upon conversion of 1,000 shares of $50 par value preferred stock. The preferred stock was originally issued at $60 per share. The common stock is trading at $25 per share at the time of the conversion. Record the conversion of the preferred stock. See the

Cost of retained earnings, new common stock and debt

The management of a conservative firm has adopted a policy of never letting debt exceed 30 percent of total financing. The firm will earn $10,000,000 but distribute 40 percent in dividends, so the firm will have $6,000,000 to add to retained earnings. Currently the price of the stock is $50, the company pays a $2 per share divid

Capitation Payment Methodologies

Discuss capitation payment methodologies between payers and providers, and Medicare or Medicaid with commercial Managed Care organizations (MCO). Explain at least three important aspects that you as a medical business professional would need to understand when negotiating payment contracts either between a provider and the MCO,

Portfolios in the Stock Market

Select securities to construct a portfolio for Investing INR 20 Lakhs in Indian stock market. State the objective of selecting the securities.