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Stock Value and Predicted Return: Tom and Joe's Company

On January 1st, Joe's Company began to show serious interest in Toms Company. Joe's was trading at $52/ share with a beta of 1.02 and Tom's stock was trading at $28/ share with a Beta of .93. The S&P 500 had a return of 14.875 as of December 31st. On March 31st, Joe's was trading $50/ share and Tom's was trading for $31/ shar

Cost Cutting Measures

After reviewing all the cost cutting measures I anticipate I could cut back and save approximately $15000 a year if I put those measures into practice. Some of the cost cutting measures would not be hard to do because I do not smoke and I make my own coffee at home. However, I do love my shoes and I love to pamper myself with

Current & Future Trends in Financial Services

Please help with the following problem. SUBJECT: The Future of the Financial System and Trends in the Money and Capital Markets QUESTION: If you were managing a small bank or insurance agency in your local community, what current and future trends in financial services and institutions would likely have the greatest impac

Finanace - Impact on Shareholders

Please help with the following problem. Currently a firm has $1 million in 10% debt. The firm also has 50,000 shares outstanding that sell for $40 each. The firm used the $1.0 million to repurchase stock, as they previously were an all equity firm. Three states of the economy are possible: a slump under which the firm would

Calculating Net investment: Airstat Example

Airstat is replacing an old stamping line that cost $80,000 five years ago, with a new, more efficient machine that will cost $225,000. Shipping and installation will cost an additional $20,000. The old machine has a book value of $15,000 but will be sold as scrap for $5,000. The new machine will be depreciated with a 7 year lif

Growth rates and common stock valuation

Business has been good for Keystone Control Systems, as indicated by the four-year growth in earnings per share. The earnings have grown from $1.00 to $1.63. a. Determine the compound annual rate of growth in earnings (n = 4) b. Based on the growth rate determined in part a, project earnings for next year. c. Assume t

Mortgage Amortization

On September 30, 2009, Dixon Inc. incurs a 30-year $700,000 mortgage liability in conjunction with its purchase of a candy factory. This mortgage is payable in equal monthly installments of $3,758 which include interest computed at an annual rate of 5%. The first monthly payment is made on October 31, 2009. This mortgage is f

Financial Management Account Payable Increases

Airstat is replacing an old stamping line that cost $80,000 five years ago, with a new, more efficient machine that will cost $225,000. Shipping and installation will cost an additional $20,000. The old machine has a book value of $15,000 but will be sold as scrap for $5,000. The new machine will be depreciated with a 7 year lif

Contribution Margin for Rhetorix, Inc.

Rhetorix, Inc. produces stereo speakers.The selling price per pair of speakers is $900. The variable cost of production is $300 and the fixed cost per month is $60,000. Required a. Calculate the contribution margin associated with a pair of speakers. b. In August, the company sold six more pairs of speakers than plann

Article Summary

Summarize the article below. 652 words ----------------------------- Copyright Thomson Tax and Accounting d/b/a RIA Jan/Feb 2007 [Headnote] With much of the Sarbanes-Oxley compliance effort now behind them, chief financial officers are using a suite of methodologies that are comprised under business performance mana


If you were analyzing a replacement project and suddenly learned that the old equipment could be sold for $1,000 rather than $400, would this new information make the replacement look better or worse? Explain.


A company produces two products: Product A and Product B. Each product must go through two processes. Each Product A produced requires 2 hours in Process 1 and 5 hours in Process 2. Each Product B produced requires 6 hours in Process 1 and 3 hours in Process 2. There are 80 hours of capacity available each week in each process.


10. Jo's Coffee Company owns two stores in Arizona. Their corporate office is considering eliminating the one of their stores due to declining sales. Segmented contribution income statements are as follows and common fixed costs are allocated on the basis of sales. West East Total

Problems about Special Order and Maximizing Profits

1. Gamboa's Company has a capacity of 50,000 units per year and is currently selling all 50,000 for $500 each. Keller Company has approached Gamboa about buying 5,000 units for only $450 each. Gamboa has a normal variable cost of $380 per unit, including $50 per unit in direct labor. Gamboa could produce the special order on an

Loan Interest Rates Terms

See attached file for tables. Section I: Computational Problems 1. Big Sky Montana Corporation must install $1.875 million of new machinery in its bottling operation. It can obtain a bank loan for 100% of the purchase price or it can lease the machinery. [ Assume the following apply: 1. The machinery falls into the MA

The Tracking Signal of the St. Louis Forecast

St. Louis has the following data for the students enrollment from year 2005 to 2009 please determine the tracking signal of the St Louis forecasts. Is it over forecasted or under forecasted? Year Actual Enrollment Forecast Enrollment 2005 2533 2550 2006 2612

Adjustable and Fixed Rate Mortgages

Consider the following scenario: John buys a house for $150,000 and takes out a five year adjustable rate mortgage with a beginning rate of 6%. He makes annual payments rather than monthly payments. Unfortunately for John, interest rates go up by 1% for each of the five years of his loan (Year 1 is 6%, Year 2 is 7%, Year

Computing current price of the stock (P )

State Street Corp. will pay a dividend on common stock of $4.00 per share at the end of the year. The required return on common stock (K ) is 11%. The firm has a constant growth rate of 6%. Compute the current price of the stock (P )

Calculation of equivalent units

McMillian Tire Company produces tires used on small trailers.The month of June ended with 500 tires in process, 90 percent complete as to direct materials,and 50 percent complete as to conversion costs;2,000 tires were transferred to finished goods during the month,and 2,400 were started during the month.The beginning Work in Pr

Financial Reporting and Theory

Please identify what accounting standard is the UK and US using at the moment. Detail describe what is the difference between principle based accounting standard and rules based accounting standard. What is the US current status/objectives on current convergence project between the FASB and the IASB. Critically assess how t

PROBLEM 3-8. Production Cost Report,Missing Information

Marion Chemicals produces a chemical used as a base in paints.In the manufacturing process, all materials are added at the start of the process,whereas labor and overhead are added evenly throughout production. Required Fill in the missing information in Marion's Production Cost Report for the month of December Marion C

Production Cost Report for Aussie Yarn Co.

Aussie Yarn Co. is a U.S. producer of woolen yarn made from wool imported from Australia. Raw wool is processed, spun, and finished before being shipped out to knitting and weaving companies. Material is added in the beginning of processing, and conversion costs are added evenly throughout processing. Aussie began the month

Calculate the expected portfolio

5.13 in Ch. 5 Expected return Year Stock L Stock M 2010 14% 20% 2011 14 18 2012 16 16 2013 17 14 2014 17 12 2015 19 10 P5â?"13 Portfolio return and standard deviation Jamie Wong is considering building an investment portfolio containing two stocks, L and

Average return, variance, standard deviation

A recession is an example of systematic risk because it affects the pattern of a number of aspects (stock), what are some other examples of systematic risks? Assume Company X has the following returns for years 1 to 5: -25, 36, 9, 11 and 17%. What would be: a. the average return b. the variance of the returns over the per

Diversification in Stock Portfolios

Could you please provide a report well supported, in APA format, illustrated with examples about your conclusions in this case study: Diversification in Stock Portfolios Consider the following two, completely separate, economies. The expected return and volatility of all stocks in both economies is the same. In the first e

Spreadsheet using IF / AND functions for employee bonus pay

See attached file. In the attachment, I need help with how to use the "AND" and "IF" formula. The IF formula is needed to enter the bonus amounts if a person is eligible. An employee with a performance rating of seven or higher and who meets the sales quota receives a bonus of one percent of the sales. If the ratin