Lear, Inc., has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 10 percent. Short-term financing currently cos
It is January 2nd. Senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (=assets/equity) to a new target of 2.7. Assume the stock
Percival Hygiene has $10 million invested in long-term corporate bonds. This bond portfolio's expected annual rate of return is 9 percent, and the annual standard deviation is 10 percent. Amanda Reckonwith, Percival's financial adviser, recommends that Percival consider investing in an index fund which closely tracks the Sta
On January 1, Year 1, a firm issued $200,000 bonds and received $210,483 from investors. The stated rate of interest is 10% and the market rate of interest is 8%. The bonds have a 3-year maturity and pay interest semi-annually on June 30 and December 31st. Prepare an amortization schedule using the effective interest method of a
Part I - 1. Please explain the advantages and disadvantages of debt financing. 2. How does the use of debt financing affect the rate of return that shareholders require on their investment in the firm's shares. How does the cost of equity (i.e., the rate of return investors require on their investment in the firm's shares
1. Calculating Ratios. Here are simplified financial statements of Phone Corporation from a recent year: INCOME STATEMENT Net sales 13,193 Cost of goods sold 4,060 Other expenses 4,049 Depreciation 2,518 Earnings before interest and taxes (EBIT) 2,566 Interest expenses 685 Income before tax
Chester's Elite product Cell has an awareness of 72%. Chester's Cell product manager for the Elite segment is determined to have more awareness for Cell than Andrews' Elite product Axe. She knows that the first $1M in promotion generates 22% new awareness, the second million adds 23% more and the third million adds another 5%.
What is the Delphi technique in risk management? How would you use the results of the Delphi technique? Are the results of the Delphi technique applicable to an issue in an organization that you are familiar with? Explain.
Suppose you are bullish on Stock X and instruct your broker to buy 1,000 shares on margin, with a margin of 60%. The current price of a share of Stock X is $30, the interest on loans is 5%, and the maintenance margin is 40%. a) How much do you borrow from your broker? b) How far can the stock price fall before a margin cal
The initial proceeds per bond, the size of the issue, the initial maturity of the bond, and the years remaining to maturity are shown in the following table for a number of bonds. In each case, the firm is in the 40 percent tax bracket, and the bond has a $ 1,000 par value. Proceeds per Size of Initial Maturity Years Remainin
How to understand public finances I need several examples of each answer. a. Identify opportunities to develop the state or local economy. b. Identify strategies to improve the government's bond rating. c. Explain how unplanned events affect intergovernmental fund transfers. d. Recommend long-term fina
You must estimate the intrinsic value of Tsetseko Technologies' stock. Tsetseko's end-of-year free cash flow (FCF) is expected to be $17.50 million, and it is expected to grow at a constant rate of 7.00% a year thereafter. The company's WACC is 10.00%. Tsetseko has $125.00 million of long-term debt plus preferred stock, and the
A friend tells you that he has a job that pays US $1,500 per month (after tax); however, he is spending US $1,900 per month and taking on more credit card debt to meet his monthly bills. In conversation he says, "I love to fix up my car, and I love purchasing new clothes. I need money for the things I want to do." He ends the co
An 8 year old storage tank has to be replaced or repaired because of severe corrosion. You have been asked to investigate three alternatives Replace tank to original specifications. -Repair tank with stainless steel lining. -Replace tank with stainless steel tank. You have obtained the following information: Shut dow
1. A firm generated free cash flow of 2348 million and paid net interest of 23 million after tax. It paid a dividend of 14$ million and issued shares for 54 million. There were no share repurchases. What did the treasurer do with the remaining cash flow and for how much? 2. A firm generated a negative free cash flow of 1857 m
See attached Excel file. The income statement, similar to a video, measures the firm's profitability over a period of time: one month, one quarter, or one year. The statement focuses on the operations of the firm and explains what was produced and sold. In essence, it summarizes revenues generated and the results. Mark un
Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about $50,000 next year and will have accumulated about $40,000 to invest. They now rent an apartment but are considering purchasing a condominium for $100,000. If they do, a down payment of $10,000 will be requi
Which of the following statements is CORRECT? A The best way to judge the effectiveness of a firm's cash management procedures is to look at the ratio of its cash balances to its sales. The higher this ratio, the more effective the firm's cash management procedures are. B A good lock box system will reduce the
CHECK FIGURE (2) First quarter disbursements: $111,000 (3) First quarter ending cash balance: $31,400 Colormania is a wholesale distributor of dyes and pigments. When the treasurer of Colormania approached the company's bank late in the current year seeking short-term financing, he was told that money was very tight and tha
Refer to the attached file as some of the tables did not copy across. (Appendix 5A) Gaumer Corporation's recent utility costs are listed below: Management believes that utility cost is a mixed cost that depends on machine-hours. Using the least-squares regression method, the estimate of the fixed component of utility c
"Contingency funding never survives the review process. Once upper management realizes you have built in some funds to cover risks, they will cut it out and lower the bid." What is the real message behind the quote.
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, Apex stock will be worth $70 per share. If the trials were unsuccessful, Apex stock will be worth $18 per share. Suppose that the morning before the announcement is sche
Which stock would you prefer to own and why? Keep in mind the pros and cons of each stock and how they are valued.
>> Owning Stock << Introduction: This discussion requires you to explore the differences between the types of stock from a personal perspective. If you do not already own stock, it will give you a chance to think about it. Tasks: Which stock would you prefer to own and why? Keep in mind the pros and cons of each stock an
Can you help me get started with this assignment? A company has the following outstanding stock at the end of both 20X7 and 20X8 - Preferred stock (6%, $100 par value, 1000 shares issued and outstanding) - Common stock ($1 par value, 200,000 shares issued and outstanding) No dividends were declared or paid 20X7
Can you help me get started with this assignment? 32. Tom Skinner has $45,000 invested in a stock with a beta of 0.8 and another $55,000 invested in a stock with a beta of 1.4. These are the only two investments in his portfolio. What is his portfolio's beta? 0.93 0.98 1.03 1.08
Can you help me get started with this assignment? Your parents have been left a substantial amount of money and want to invest it in a company. They want your recommendation but also want to see the reasoning behind your choice. Prepare a trend analysis document for your parent to consider. Prepare a trend analysis of operati
Can you help me get started with this assignment? Your parents have been left a substantial amount of money and want to invest in a company. Your father trusts you to make a recommendation but also wants to see the reasoning behind your choice. Prepare three set of document for your parents to consider (business analysis, com
In its 2006 annual report, The Coca- Cola Company reported sales of $ 24.09 billion for fiscal year 2006 and $ 23.10 billion for fiscal year 2005. The company also reported operating income (roughly equivalent to EBIT) of $ 6.31 billion, and $ 6.09 billion in 2005 and 2006, respectively. Meanwhile, arch- rival PepsiCo, Inc. repo
Intel Corp. ( INTC) has a capital structure consisting almost entirely of equity. a. If the beta of INTC stock equals 1.6, the risk- free rate equals 6 percent, and the expected return on the market portfolio equals 11 percent, what is INTCs cost of equity?
Please see attached document. Financial Analysis with Microsoft Excel 1) Suppose that at the beginning of January 2000, you purchased shares in Advanced Micro Devices, Inc. (NYSE: AMD). It is now five years later, and you decide to evaluate your holdings to see if you have done well with this investment. The table below sh