Suppose you plan to create a portfolio with two securities: A and B. A has an expected return of 35% with a standard deviation of 22%. B has an expected return of 20% with a standard deviation of 9%. The correlation between the returns of these two securities is perfectly negative. What percentage of your investment should be in
As the Director of Athletics at Big Time State University (BTSU), you have been approached by the president of BTSU about building a new state-of-the-art on-campus arena. She wants to know your ideas regarding the financing of the new facility. What will you tell her?
Under what environmental conditions are price wars most likely to occur in an industry? Why? What are the implications of price wars for a company? How should a company try to deal with the threat of a price war? Explain
What is the difference between the annual percentage rate (APR) and the effective annual rate (EAR)? Which rate do you believe is more relevant for financial decisions and why?
Given the following expected returns and standard deviations of assets A, B and C, which asset should the prudent financial manager select? Asset Expected Return Standard Deviation A 10% 10% B 12% 10% C 12% 8%
Jeff Corporation purchased a limited-life intangible asset for $120,000 on May 1st, 2009. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by Dec 31st, 2010? a.) 0 b.) 24,000 c.) 32,000 d.) 36,000
Intangible Amortization For Palmiero Company a) Palmiero purchased a patent from Vania Co. for $1,500,000 on January 1, 2010. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2010. During 2012, Palmeiro determined that the economic benefits of the patent would not last longer tha
Select ONE of the four companies for analysis. Exxon Mobil Corp. (XOM) - Merck & Co. Inc. (MRK) - Target (TGT) - Verizon Communications Inc. (VZ) Go to the Yahoo!Finance Web site. Enter the stock ticker symbol or name of the company you wish to analyze in the input field next to Get Quotes at the top of the page and
If someone believes they can easily double the size of a business within 2 years, but the financial forecast shown in the business plan show the business can not generate enough cash to fuel the growth at that pace and shows that an extra $550k in external capital is needed to meet the goals and objectives they have set for the
You will assume the role of a financial analyst and create a full analysis between Coca-Cola and PepsiCo. Please explain all calculations and ensure that you answer each and every question thoroughly. You will need to locate Coca-Cola and PepsiCo, Inc annual financial statements for 2007. These can be easily obtained through the
Suppose it is May 1985 and the current value of the Greek drachma is Dr 1 = $0.006369, but the expected spot rate 90 days hence is Dr 1 = $0.005980. What is the value of a sales order of Dr 50 million sold on 90-day terms?
Please describe financial regulations in the market economy. Why are they needed?
If you had to rate Facebook (FB) as a Buy, Hold, or Sell. Discuss the metrics and methodology used in making your determination.
Assume that Nike Inc. (NKE) is expanding globally. One way to expand globally is to buy shares of other companies, while other way is to open up new branches. But both options are not risk free. How important is it for the financial managers of Nike Inc. to use economic variables in identifying long term financial goals?
Adding Value Through Budgeting Budgeting is an important part of an organization's overall planning. Through budgeting, each part of an organization's structure can be identified for decision making and control. A reasonable budget can allow an organization to allocate resources and provide a plan and direction for the orga
A. Compute the following for the Omaha Division: 1. Segment contribution margin. 2. Profit margin controllable by segment manager. 3. Segment profit margin.
Probem 1 The following information was collected for the Omaha Division of the ABC corporation: Sales Revenue $4,000,000 Uncontrollable fixed costs traceable to the division 1,300,000 Allocated Corporate overhead 200,000 Controllable Fixed costs traceable to the division 1,000,000 Variable costs
Corporate Finance Problem: 1) On Attachment 2) On Attachment 3) Classify each of the following voluntary settlements as an extension, composition, or a combination of the two. A. Paying all creditors 30 cents on the dollar in exchange for complete discharge of the debt. B. Paying all creditors in full in three per
Sun Coast Savings Bank was founded in l97l in Safety Harbor, Florida, which is just across the bay from Tampa. Safety Harbor is very popular with people who work in Tampa but do not wish to live within the city itself. Per-capital income in Safety Harbor is substantially above the national average; in fact, the town has a rep
Consider two investors (A and B) with the following demand curve for a stock: A: p=100-q B: p=150-2q a) At a price of $50, how much will A and B purchase? b) If the price falls to $30, who will increase their holdings more? c) On this basis, which investor seems to be more overconfident?
As a leader, your job is to define the operating mechanisms for your organization, use them to align the teachable point of view (TPOV), and create positive emotional energy. While you may not be in a top leadership role, you can still make the most of the operating mechanisms you have and create new ones. Before creating or
Find the intrinsic value of the stock of company ABC using the following data: risk free rate = 5% market risk premium = 8% Expected market return = risk free rate + market risk premium beta = 0.9 ROE = 12.5% dividend payout ratio = 0.22 Dividends for the next 4 years are expected to be .59, .67, .76, .85. Subsequent
Break-Even Price: Miller Manufacturing, Inc. produces electronic components for television circuitry.
Miller Manufacturing, Inc. produces electronic components for television circuitry. Variable costs comprise 67% of a product's selling price. The variable costs of producing a component include the following: Direct material $ 1.83/unit Direct labor $ 6.72/unit Variable factory over
ABERCROMBIE AND FITCH HENNES & MAURITZ Prepare a table for a period of three years showing some key financial information for the two companies listed above. Include four items from the balance sheet, four items from the income statement, and four items from the statement of cash flow for each company.
How has PCAOB impacted Waste Management? Give the functions and responsibilities of the Public Company Accounting Oversight Board (PCAOB) and how has PCAOB impacted Waste Management? Write an annotated bibliography of the 12 or more resources you have identified. Describe each resource and assess its value in 1 to 2 paragrap
Diamond Machine Technology makes a tool for sharpening the blades of pruning sheers and grass clippers. The company has invested $250,000 in developing this sharpener, which it would like to make back in the first year. This tool is about the size of a piece of chewing gum and costs $3 to make. Fixed costs for the sharpener are
See the attached file. Consider the following scenario: Hickman Savings and Loan is concerned that market conditions might cause the short-term yield curve to be higher than the long-term yield curve. This negative yield curve means that long-term interest rates are lower than short-term rates. This will cause the bank to sh
Being a financial manager of a large firm, you need $70 million over the next year. What are the more likely alternatives for you to borrow or raise $70 million? What are the issues that would surround your final decision of where and how to raise these funds? Compare and contrast the various options available to you in the
we assumed that you have $100,000 in your bank account that can be invested. Suppose you invested your $100,000 in the shares of the Nike Inc. (NKE) (http://www.nikebiz.com/; http://money.cnn.com/quote/quote.html?symb=NKE). Based on your current situation, your portfolio cannot be considered a "diversified portfolio" because you
Zero Inflation? Most economists and financial analysts generally agree that inflation is a bad thing and should be kept to a minimum. But should inflation be zero? This is an entirely different matter subject to much debate. Read the articles below and do some of your own research in the Cyber Library and/or Internet
5. Vessels Corporation's net income for the most recent year was $2,532,000. A total of 200,000 shares of common stock and 200,000 shares of preferred stock were outstanding throughout the year. Dividends on common stock were $3.80 per share and dividends on preferred stock were $1.25 per share. The earnings per share of common