If the economy recovers next year, analysts expect Stock X's return for the year to be 20%; if the economy does not recover, analysts expect Stock X's return for the year to be -5%. If there is a 40% chance that the economy will recover and a 60% that it will not, what is: a. The expected return on Stock X for the next year?
Practice Question 2-6 In its most recent financial statements, Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings were $780 million. How much in dividends was paid to shareholders during the year? Practice Question 2-7 The Talley Corporation had a taxable i
Which are the main internal controls for finance and investment cycle? Answer must be sustantive. Level: Master in Accounting
Which are the inherent risks in the finance and investment cycle? Give an example of a recent news story or an article about that?
I wonder if reverse stock splits are very common. I haven't heard of those very often. Why would a company want to do this? Also to be listed on a stock exchange stocks generally must maintain a certain minimum price per share. What is the threshold? Reverse stock splits do occur. They are not nearly as common as... D
The real risk-free rate is 2.5 percent. Inflation is expected to be 2 percent this year, 2.5 percent next year, and 3 percent thereafter. The maturity risk premium is estimated to be 0.07 ´ (t - 1)%, where t is the number of years to maturity. What is the yield on a 7-year Treasury note? a. 0.49% b. 5.71% c.
Helen recently received a credit card with a nominal interest rate of 21 percent. With the card, she purchased some new clothes for $250. The minimum payment on the card is only $20 per month. If Helen makes the minimum monthly payment and makes no other charges, how long will it be before she pays off the card? a. 11.4 months b. 14.2 months c. 19.9 months d. 8.0 months e. The card will never be paid off.
Helen recently received a credit card with a nominal interest rate of 21 percent. With the card, she purchased some new clothes for $250. The minimum payment on the card is only $20 per month. If Helen makes the minimum monthly payment and makes no other charges, how long will it be before she pays off the card? a. 11.
You want to buy a house, and a mortgage company will lend you $150,000. The loan would be fully amortized over 15 years (180 months), and the nominal interest rate would be fixed at 7.75 percent, compounded monthly. What would be the monthly mortgage payment? a. $17,257.84 b. $11,625.02 c. $10,524.43 d. $1,411.91
If you deposit money today in an account that pays 11.8 percent annual interest, how long will it take to double your money? a. 8.47 years b. 11.80 years c. 7.46 years d. 6.21 years e. The answer cannot be calculated without knowing how much money is initially deposited.
A standard criticism of investment banking firms is their approach to valuation which includes determining a price for an offering and then manipulating the input variables into conventional valuation techniques to justify the arrived price. If that is so, wouldn't use of heuristics rather than more sophisticated valuation proc
Discuss the data as found on the financial statements that are used to calculate free cash flow (FCF) for a firm. Graduate Level
Discuss capital formation as it relates to the business form and the life cycle of businesses. How would the business form used by the manager/owner impact the firm's ability to raise capital? Graduate level
What is company's intrinsic value? How does it differ from market value?
Unit 5 Discussion Board Details: The Discussion Board (DB) is part of the core of online learning. Classroom discussion in an online environment requires the active participation of students and the instructor to create robust interaction and dialogue. Every student is expected to create an original response to the open-ende
There are three securities in the market. The following chart shows their possible payoffs: State Probability of Return on Return on Return on Outcome Security1 security2 Security3 1 .15 .25
Explain some major risks inherent in the payroll cycle. How can these risks be mitigated? Level: Master in accounting, and the topic is Internal Control
** Please see the attached file for an Excel formatted copy of the problem description ** Calculate contribution margin, contribution margin ratio break-even units and break-even dollars, and answer the following: Decision Guideline Phonetronix (CVP) Analysis 3-Jul-11 Proposa
Kimberly is a self-employed taxpayer. She recently spent $1,000 for airfare to travel to Italy. What amount of the airfare is she allowed to deduct in each of the following alternative scenarios? a. Her trip was entirely for personal purposes. b. On the trip, she spent eight days on personal activities and two days on busi
Risk in the Production Cycle. Topic: Design the internal controls for inventory and production. Study Level: Master in Accounting.
Jerry's portfolio is invested equally in five stocks (that is, each stock in the portfolio has a weight of 0.20) and has a required return of 9.4%. The risk-free rate is 5% and the market risk premium is 4%. What is the portfolio's beta? Assume that Jerry's portfolio is on the SML. I put answer 1.100 The last stock to this po
Glory (50% of his portfolio is in each stock. Each stock's expected return for the next year will depend on market conditions. The stock's expected returns if there are poor, average, or great market conditions are shown below: Market Condition: POOR Probability: 0.25 Kelevra: -12% Old Glory: -2% Market Condition:AVERAGE Pro
Assume you are a manager over operations and it is budget season. You have been trying for two years to receive approval for two full-time employees. The finance manager does not see how or why you should receive this increase in budget. Provide examples of how you and the finance manager can use integrative negotiation techn
Hedging is often referred to as a means of dealing with risk. Describe some techniques that fall under this concept that could help you deal with an anticipated price increase. Describe the pros and cons of hedging versus not hedging the risk. Use an example where possible.
Provide a detailed presentation of the characteristics of the various external financing alternatives, including the advantages and disadvantages of each.
Having previously identified the location of its Greenfield investment, Acme, a multi-billion public MNE that is incorporated in the U.S., must next obtain external financing for its proposed overseas production facility. It has been estimated that the acquisition will cost $500M and all funds will be secured in the U.S. Your jo
According to the Fisher effect, if the real interest rate is 3 percent and the nominal interest rate is 8 percent, what rate of inflation is the financial marketplace expecting? Explain the reasoning behind your answer. If the nominal rate rises to 11 percent and following the Fisher effect, what would you conclude about the exp
The manager of a life insurance company is trying to decide what annual premium to charge a group of policyholders, each of whom has just received his or her 40th birthday. A check of mortality tables indicates that, for every million persons born 40 years ago, 3percent die, on average, sometime during their 40th year. If the co
What are the linkages among financial decisions, return, risk and stock value? Why are these linkages important? How does the financial manager incorporate these as s/he manages the assets and liabilities of the firm?
Please discuss the following question and use an example if possible. Question: Define control risk and explain the role of control risk assessment in audit planning.
Problem #3 The December 31, 2009 balance sheet of Quayle Company had Accounts Receivable of $500,000 and a credit balance in Allowance for Uncollectible Accounts of $33,000. During 2010, the following transactions occurred: sales on account $1,400,000; sales returns and allowances, $50,000; collections from customers, $1,150
Recommend a strategy or combination of strategies the organization should implement for Ford Motor Company. Need some strategy's and how they would apply.