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Appropriate Discount and Inflation Rate

The fund you represent is a significant shareholder in Iron Man Industries which just paid a dividend of $5.25 per share is currently expected to grow in perpetuity at 5% each year. Management has proposed a significant re-structuring of the business which will cost a lot of capital, only part of which can be raised externally.

Three-Month Cash Budget with a Few Variables

See the attached file. Pharma Drug Store is a pharmacy in Portland, Maine, owned by Jane Smith, a local pharmacist. Pharma business has been good, but Ms. Smith finds that she frequently runs out of cash. To date, she has dealt with this cash shortfall by delaying payment to the drug suppliers, which is starting to cause proble

Stock Price, Risk Free Assets, Debt to Equity Ratio, Value

Company A and B are two identical companies with equal asset values of $50 million. Company A is financed by equity only and has 100,000 shares outstanding. Company B has perpetual risk-free debt in its capital structure with a market value of $20 million. Company B also has 100,000 shares outstanding. The risk-free rate is 1%.

Finance Tutorial: Efficient Markets and Informational Asymmetry

SQ3-3,4 Carefully explain what is meant by the term efficient market. Are there different levels of market efficiency? What are those levels? Explain what is meant by informational asymmetries. What problem can these asymmetries create for participants in the money and capital markets?

Financial Management of SAC Enterprise

As SACs corporate business financial analyst, you will be required to provide the SAC Board of Directors and executive management team with essential financial information on the management of the SAC enterprise. What are the basic financial statements you will submit to the Board and management? What information is contained in

Stock Valuation

1.)The Jackson-Timberlake wardrobe Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow on a constant rate of 6 percent per year indefinitely. If investors require an 11 percent return on the Jackson-Timberlake Wardrobe Co. stock, what is the current price? What will the price be in three

Residual income model; correlation between stocks; expected price of stock

See attached file full problems. Question # 1 Apply the residual income model to determine the intrinsic value of the stock for a firm with the financial data shown in this table. Question #2 Calculate the correlation between Stock A and Stock B. Question #3 A stock just paid a dividend of $2.00. Due to t

Excel Quantitative Methods: Example Problem

Comfortable Hands is a company that features a product line of winter gloves for the entire family â?" men, women, and children. They are trying to decide what mix of these three types of gloves to produce. Comfortable Hand's manufacturing labor force is unionized. Each full-time employee works a 40-hour week. In addition,

Minimum Cost Schedule

Can you help me get started with this project? A restaurant operates with two full-time employees who work 8 hours per day. The rest of the employees are part-time employees who are scheduled for 4 hours shifts. On Saturdays the restaurant is open 11:00 A.M. to 10:00 P.M. Management wants to develop a schedule for part-time e


1- Excalibur corporation has developed a model to predict sales revenues for its line of beach towels and swimwear based on long-range weather forecasts. The probability of means temperature and related sales of product line units are as indicated below: Unit sales Temperature Probability 10,000 75-79

Point to Determine When to Close Down

In deciding whether to start a new business, explain fully which factors you would include in your business plan? Assuming you open the business, at what point would you deem the business venture successful? At what point would you decide to close down if you were losing money?

Life insurance policy - received payments

You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. You can earn 6 percent on your money. Which option should you take and why? Ques

Evaluate Walmart's Financial Performance During the Past 2 Years

Evaluate Wal-Mart's financial performance during the past 2 years, using financial ratios. Calculate the ratios for each year: Current Debt Return on equity Average Collection Period Discuss the trend for each ratio and what it tells you about the organization's financial health.

An Analysis of the Financial Ratios for PepsiCo, Inc.

Data from Consolidated Statement of Income (page 60), Consolidated Statement of Cash Flows (page 61) and the Consolidated Balance Sheet (page 62) of the 2009 PepsiCo Annual Report and was used to determine that following ratios for both year 2009 and 2008 Please note that the numbers are in millions: 1. Current Ratio T

Excel problem for Alice Barr Realty housing sale data.

You are an intern with the Regional Realty Service and are analyzing the claim made by Alice Barr Realty that "we get your price." You have prepared a spreadsheet that shows data relating to three months' sales by Alice Barr Realty. You are going to determine the percent of asking price for each home sold that month. Determiine

Finance: 5 multiple choice questions

(1) Suppose you have an investment that pays $75 at the end of the year for each of the next five. If your opportunity cost of money is 12%, how much is the investment worth? A) $270.36 B) $375.00 C) $132.18 D) $250.71 (2) In computing the terminal value on a piece of equipment that will be disposed of in 5 years,

Financial Management - NPV

calculations must be shown in excel 1) Continuous Compounding: Compute the future value of $1,900 continuously compounded for: a: 5 years at a stated annual interest rate of 12 percent. b. 3 years at a stated annual interest rate of 10 percent. c. 10 years at a stated annual interest rate of 5 percent. d. 8 years at a s

Liability Insurance, Insurers, Profits

1. Suppose that a liability insurance policy with a coverage limit of $100,000 (i.e., the insurer will pay liability claims up to $100,000) has a premium of $600. For each of the following people, what is the premium per dollar of personal wealth protected if the policy were purchased? Person Person's Wealth Mary $ 5,000 Curly

Margin questions

Use the information below for the following 2 problems **************************** You decide to sell 100 shares of Davis Industries short when it is selling at its yearly high of 32 1/4. Your broker tells you that your margin requirement is 55 percent and that the commission on the sale is $55. While you are short, Davis pay

Purchasing Stock on Margin

Use the information below for the following 3 problems. Thanks for your help! *************************** 1. Jackie has a margin account with a balance of $45,000. If initial margin requirements are 50 percent and Turtle Industries is currently selling at $50 per share: How many shares of Turtle can Jackie purchase? a. 1,800

Arithmetic Average, Standard Deviation and Returns

Calculate the arithmetic average, the geometric average, the variance and standard deviation For the S&P 500 index for the decade of 1980-1990. Do the same calculations for the S&P 500 index for 2000-2010. Compare and contrast your answers and provide explanations for the similarities and differences. Calculate the statistical

Description of Leverage Analysis and Break-Even Analysis

Please answer the following questions: 1. An analytical income statement for Detroit Heat Treating is shown below. It is based on an output (sales) level of 40,000 units. Sales $480,000 Variable costs _2_8__0_,_0_0_0 Revenue before fixed costs $200,000 Fixed costs _1_2__0_,_0_0_0 EBIT $ 80,000 Interest expense __3__0_

Business Finance Reasoning: Cash Flows and Capital Structure

Explain the reasoning behind the focus on cash flows rather than accounting profits in making our capital-budgeting decisions. Why are we interested only in incremental cash flows rather than total cash flows? If depreciation is not a cash flow item, why does it affect the level of cash flows from a project in any way? Wh

Contribution margin .

Use the formula stated: Contribution Margin = Revenue - Variable Costs (CM = R - VC) Your top two Agents ... Let's call them ... Agent J and Agent K, both bring in two "must do deals" with new extraterrestrial ah ... accounts. Agent J's is for $ 100,000 ... 50 units at sales price $2,000 per unit Agent K's is for $ 50,0


a. What is the definition of price elasticity of demand? b. Explain the relationship between price elasticity and total revenue? How does price elasticity of demand affect a firmâ??s pricing decisions? c. How does the availability of substitutes affect price elasticity of demand? Provide examples. Pleas

Corporate Finance

Manyops, Inc., is a manufacturing firm that has experienced strong competition in its traditional business. Management is considering joining the trend to the "service economy" by eliminating its manufacturing operations and concentrating on providing specialized maintenance services to other manufacturers. Management of Manyop