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# Finance

### Wrigley Corporation: Underwriting spread percentage

The Wrigley Corporation Offer Size of Offer Public Price Net to Corp. a 2.00 \$16 \$15.00 b 0.3 \$1,001 \$992.00 Solution: a) Spread = % underwriting spread = b) Spread = % underwriting spread =

### CFO Role in Overhauling the Performance Measurement System

Should the CFO (or the finance group) take the lead or play a key role in overhauling the firm's performance measurement system? Why or why not? What are the major payoffs from overhauling the performance measurement system? What are some pitfalls in design and implementation? Where does corporate culture fit in the pro

### PAP coverage if a named insured drives a non-owned auto

Bob, the named insured, is an auto mechanic. Bob and his wife, Belle, own and drive a Ford. They have 2 children, Ben and Bill. Ben, age 26, is in the U.S. Army, and comes home to visit about twice a year. Bill is 16, lives at home and has a learner's permit but no permanent driver's license. Ben often rents cars on weekends and

### Monte Carlo Simulation and Picking the Best Investment

What is a Monte Carlo simulation..? And, why is it important? Assume a \$4,000 investment and the following cash flows for two alternatives. Year Investment X Investment Y 1 \$1,000 \$1,300 2 800 2,800 3 700 100 4 1,900 5 2,000 a. Under

### Valuation Models: ConocoPhilips

Company: ConocoPhillips Initiative to shareholders: "Through our investments, we are continuing to increase our emphasis on exploration and production, to which 86 percent of our capital program was dedicated during 2010, with 89 percent planned for 2011." Annual Report - 2010 Justify the current market price of Conoc

### Finance: M1, M2 money supply; discount rates, bank's total assets, equity capital ratio

Determine the size of the M1 money supply using the following information. Currency plus traveler's checks \$25 million, Negotiable CDs \$10 million, Demand deposits \$13 million Other checkable deposits \$12 million Following are components of the M1 money supply at the end of last year. What will be the size of the M1 money sup

### Factors Triggering the Market Crash on May 6th 2010

What factors may have triggered the market crash of May 6th (2010)? Please explain in detail and include 2 references.

### Federal Reserve Board Member Terms

The term of office for the Federal Reserve's Board of Governors is 14 years. But how long does a member actually serve? Calculate the average duration of Board service for these two twenty-year periods: 1950-1970 1990-2010 Note: Calculate the average period of time served based only on persons who went onto the Board after Ja

### Reserve Requirements Less Predictable Effects

Suppose you borrow \$15,000 and then repay the loan by making 12 monthly payments of \$1,297.92 each. What rate will you be quoted on the loan? What is the effective annual rate you are paying? Why do changes in reserve requirements have less predictable effects on the money supply in comparison to changes in open market o

### Describe risks associated with the initiative and financial effects they may have.

Please help me describe risks associated with the initiative and financial effects they may have: Part of the strategic planning initiative for The Walt Disney Company's media networks is to continue to acquire more competitive programming to increase advertising revenue. Another strategic initiative includes expanding and u

### Annual scholarship payment for \$450,000 invested at 7%

A scholarship provider has \$450000 which she will invest today to fund a scholarship forever. She expects to earn 7% on her money each year. If she wants to begin paying out the scholarship starting today, what will the annual scholarship payment be? Answer \$28,230 \$31,500 \$35,822 \$29,439

### What is the effective annual rate of 8.7 percent compounded semi-annually?

What is the effective annual rate of 8.7 percent compounded semi-annually? Answer 8.99 percent 9.67 percent 8.32 percent 10.27 percent 8.89 percent

### Loans of equal amounts and equal time periods, select loan that has the lowest what?

When comparing loans of equal amounts and equal time periods, you should select the loan that has the lowest: annual percentage rate. stated rate. nominal rate. effective annual rate. quoted rate.

### Calculate monthly payment at 5% for a \$350,000 home loan

You decide to borrow \$350000 to build a new home. The bank charges an interest rate of 5% compounded monthly. If you pay back the loan over 25 years, what will your monthly payments be (rounded to the nearest dollar)? \$1065 \$3248 \$2872 \$2046

### At \$325 per month, how much can Steven afford to borrow at 5.25 interest

Steven can afford car payments of \$325 a month for 60 months. The bank will lend him this money at 5.2 percent interest. How much can Steven borrow today? \$12,983.45 \$17,138.64 \$9,093.27 \$23,883.43 \$32,394.57

### Public versus Private Financing

List the advantages and disadvantages of Public versus Private Financing. Discuss why companies go to private and leveraged buyouts.

### Final Tablet Simulation Analysis

It's still 2012: 1/2/2012, the beginning of Time Warp 3. You have completed your analysis and revised strategy for the next four years and taken a breather. Just like the last time, you enter your predetermined decisions each year and collect the data for future analysis. Time flies and it is certainly deja vu. Now it is New

### Recommend a mutual fund for a middle aged college professor: retire in 25 years

See attached file. Please recommend a mutual fund for a middle aged college professor who is investing for his retirement in 25 years. Please provide your rationale for the recommendation (based on assumptions you make about the investor). I have chosen the Vanguard Target Retirement 2035 Fund (VTTHX) due to the fact it

### Discuss operating expenses of types of mutual funds

1. Would you expect a typical open-end fixed income mutual fund to have higher or lower operating expenses than a fixed-income unit investment trust? Why? Please discuss in detail and give two references.

### Forecasted earnings per share to forecast stock price

1. The PE ratio combined with forecasted earnings per share to forecast stock price. So how would you determine what the growth rate is to work into your application of the formula? 2. If the government and the global markets decided to change to one world currency but it was not as convenient to carry would you still be incl

### Disclosure Analysis: Johnson & Johnson

Johnson & Johnson ââ?¬¢Research your selected company and acquire the company's most recent ANNUAL REPORT financial statements using the Internet. ââ?¬¢Prepare a word paper analyzing the disclosures contained within the notes to the financial statements related to cash and cash equivalents, receivables, and invento

### King, Inc. Based solely on expected value, should King open a branch office in California?

King, Inc., a successful Midwest firm, is considering opening a branch office on the west coast. Under normal economic conditions, with a 45% probability of occurring, King can expect to earn a net income of \$50,000 per year. In a mini-recession, at 25% probability, King will earn \$20,000. In a severe recession, at a 20% probabi

### Mortgage Loan Analysis for Mr. Johnson plans to buy a new house

Please show work in Excel along with a detailed written explanation of your findings typed in word format. Mini-Project 1: Mortgage Loan Analysis: Mr. Johnson plans to buy a new house at Sugar Land in June 2010. The sale price of the house is \$580,000. He plans to pay 20% down payments and borrow additional 80% from Wells Far

### Expected Returns Problem

The market and Stock J have the following probability distributions: Probability rM r3 0.3 15% 19% 0.4 8 4 0.3 20 11

### Prevent nonresident alien shareholders from owning stock

Why do we prevent nonresident alien shareholders from owning stock in S corporations? What might happen if they were allowed to own stock in such a corporation? What happens if a nonresident alien becomes a shareholder?

### Designing an integrated risk management program

For what kinds of questions does one seek answers in designing a risk management program? Outline (or provide a picture of) your concept of an integrated risk management system.

### Evaluation of Financial Performance

1.An investor bought 10 Ellis Industries, Inc., long-term bonds one year ago, when they were first issued by the company. In addition, he bought 200 shares of the company's common stock at the same time for \$30 per share. He paid \$1,000 each for the bonds, and today, the bonds are selling at \$950 each (long-term interest rates h

### Riordan: Identify and explain the steps of the collaboration process to achieve goals

Address the following with Riordan Manufacturing: Identify and explain the steps of the collaboration process among the functional areas that must be employed to achieve organizational goals, and prepare an action plan to implement the collaboration process

### North Pole Cruise Lines: Original stock price

North Pole Cruise Lines Annual Dividend \$8.00 Original Required Rate of Return 8% New Required Rate of Return 6% Solution: a) ORIGINAL PRICE Price of Preferred Stock = CURRENT VALUE b) Price of Preferred Stock =