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Finance

The Power of Financial Analysts

Do you think financial analysts have too much power and can they really move the market on a particular stock or industry? If so, provide examples. I do not know if I would say this as an absolute. Don't they have rules by which they must abide? Regardless, I do believe they have the power to move the market on a particular s

Computing price of Stock

See attached file. 17) Eastern Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate. It will use the dividend valuation model originally presented in Chapter 10 for purposes of analysis. The model was shown as Formula 10-9 and is reproduced below

Finance - Multiple Choice Questions

1. The ________ is a weighted average of the cost of funds which reflects the interrelationship of financing decisions. 1. 1. risk-free rate 2. 2. nominal cost 3. 3. risk premium 4. 4. cost of capital 2. The firm's optimal mix of debt and equity is called its 1. 1. optimal ratio. 2. 2. maximum we

Small business loan and pledge assets

Assume you started a new business last year with $60,000 of your own money that was used to purchase equipment. Now you are seeking a $30,000 loan to finance the inventory needed to reach this year's sales target. You have agreed to pledge your venture's delivery truck and your personal automobile as support for the loan. Your s

Financial Analysis of an Auditors Report

Do you think that the explanatory notes, supplementary schedule, Management's Discussion and Analysis, 10-K filing, Auditor's report and Proxy statements provide more information for financial analysis than do the actual financial statements for a company?

MBA finance

Company considering of project up front paid today at t = o .The project will generate positive cash flow of $60,000 for the next 5years.The project NPV is $75,000 and the company WACC is 10%. What is the company's simple regular payback?

Contribution margin, break even point, margin safety ratio, fixed costs

Tyson Company bottles and distributes LO-KAL, a fruit drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 70 cents per bottle. Management estimates the following revenues and costs. Net sales $2,500,000 Selling expenses-variable $ 90,000 Direct materials 360,000

E-Company - Prepare income statements under variable (contribution margin) and traditional (absorption) costing, What are E's contribution margin ratio, gross profit ratio and operating (net) income ratios, etc..

The E-Company manufactures trendy, high-quality moderately priced watches that it sells on the Internet. As the company's senior financial analyst, you are asked to analyze the overall profitability fo the current year. The CFO has heard that there are two different approaches for preparing income statment.s You are asked to sh

Task 2b: Problem Set

1. Consider a firm with a trading book valued at $100 million. The return of these assets is distributed normally with a yearly standard deviation of 25 percent. The firm can liquidate all of the assets immediately. How much capital should the firm have so that 99 days out of 100, the firm's return on assets is high enough that,

Debt Policy Importance

Executive Chalk is financed solely by common stock and has outstnading 25 million shares with a market price of $10 a share. It now announces that it intends to issue $160 million of debt and to use the proceeds to buy back common stock. a. How is the market price of the stock affected by the announcment? b. How many shares ca

Limited Liability Corporation and Partnership

Write a 700- to 1,050-word answer in which you explain roles of limited liability corporations and partnerships. If you were establishing your own business, under what circumstances would you choose one instead of the other? APA format

What conditions favor the use of long-term debt?

1. When a number of alternative methods of long-term financing are under considerations; what conditions favor the use of long-term debt? 1a.When a number of alternative methods of long-term financing are under considerations; what conditions favor the use of common stock. Please explain.

A call center owes your company money

Your company has entered into written contracts with the call center in Fabulous County, Florida. Recently, the call center has not been paying for your company's services. The call center owes your company amounts between $15,000 and $25,000. Your committee has the task of deciding whether to bring a lawsuit to collect these am

Finance: Use of cash; price movements in markets; sunk cost

51 Which of the following would be classified as a use of cash? a. An increase in accounts payable. b. A decrease in inventories. c. A decrease in accounts receivable. d. An increase in retained earnings. e. An increase in inventories. 53 Empirical evidence shows that financial market price movements are essentially rand

Decomposition equation

18 Which of the following would least likely be considered as signaling a potential problem regarding the "quality of earnings" for a firm? a. the firm has experienced a significant increase in earnings relative to the industry overall b. the firm's accounts receivable account is increasing at a rate faster than the firm's inc

Assume wealth

2 If market interest rates are currently 15% and your investment provides you this 15% return, does that imply that you are 15% more wealthy (after vs before this investment return)? Assume wealth is defined as the ability to consume (purchase) goods or services. a. Yes, because with inflation you do indeed have 15% more money

Finance

Need help with attached problems. FIN 450 Week 7 Chapter 21 Questions 11. What do 12b-1 fees pay and what is the maximum amount that these fees can be? 15. What regulatory changes have been adopted or are being considered to deal with abuses in the mutual fund industry? Quantitative Problems On January 1, a mut

Investment Fund

For questions 67-68, consider the following information for the BU Scholarship Investment Fund. The total investment in the fund is $1 million. STOCK INVESTMENT BETA EXPECTED RETURN A $200,000 1.5 25% B $300,000 -0.5 4% C $500,

Stock's expected price today

43 Regardless of your work above, assume that D0, which was just paid, = $1.00, D1= $1.20, D2 = = $1.40, D3 = $1.55, D4 = $2.00, D5 = $2.13, D6 = $2.27, and P3 = $80.00. What should be the stock's expected price today, (i.e.. P0)? I encourage you to draw a time line clearly indicating the situation. Again, assume the require

Contingent payoff

31 The simple corporation has an outstanding debt obligation (total of principle and interest due) to the Complex Corporation of $250 (Assume this is Simple's only debt.). It is year end and the total cash flow of Simple from all sources is $325. The contingent payoff to the debt and equity holders of Simple Corporation is: a

Share prices

Apex Inc., is a biotechnology firm that is about to announce the results of its clinical trials of a potential new cancer drug. If the trials were successful, apnex stock will be worth $70 per share. If the trials were unsuccessful, Apnex stock will be worth $18 per share. Suppose that the morning before the announcement is s

I need help preparing a cash budget

Prepare a cash budget for XYZ Company for the first three months of 2004 based on the following information: Month Estimated Sales Estimated Factory Overhead Estimated Selling, General and Admin Expenses (SG&A) December $ 2,800,000 $ 320,000 $ 625,000 January 4,000,000 325,000 637,500 February 5,600,000 335,000 642,50

Ratios for three companies using recent five year averages

Compute a recent five-years average of the following ratios for three companies of your choice (attempt to select diverse firms) : A-Retention rate. B-Net profit margin C-Equity turnover D-Total asset turnover E-Total assets/equity Based on these rations, explain which firm should have the highest growth rate of earnin