The Treasury bill rate is 4 percent and the expected return on the market portfolio is 12 percent. Using the capital asset pricing model: What is the required return on an investment with a beta of 1.5?
You own 500 acres of timberland, with young timber worth $40,000 if logged now. This represents 1,000 cords of wood worth $40 per cord net of costs of cutting and hauling. A paper company has offered to purchase your tract for $140,000. Should you accept the offer? You have the following information: Years Yea
Enron: Provide an example where a disproportionate emphasis on the financial perspective of a company occurred.
The material in this module shows that many companies place disproportionate emphasis on the financial perspective at the expense of the other three perspectives. Give an example of an organization with which you are familiar from either previous coursework, the news, or personal experience where this as been the case. What were
I need step by step explained answer, in order to double check my solution. Two stocks: need market risk premium, fair price, portfolio weights, equilibrium expected return. Consider two stocks, A and B, with the following expected returns and betas Expected Return Beta A 9.55% 0.80 B 10.98% 1.10 The risk
Building Financial Models. The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (that is, assets net of depreciation) by $200,000 per year for the next 5 years and forecasts that the ratio of revenue
Given the current state of the economy and our financial markets, is it more desirable for firms to raise money through debt or through equity at this time? Corporations almost always need more funds and capital in order to keep running, so not raising funds is not an option. So is debt or equity the best option at this time for
Please see attached files. Complete the financial information for Capstan Auto using the attached excel spreadsheet.
41. In January 2007, Castro Corporation, a newly formed company, issued 10,000 shares of its $10 par common stock for $15 per share. On July 1, 2007, Castro Corporation reacquired 1,000 shares of its outstanding stock for $12 per share. The acquisition of these treasury shares a. decreased total stockholders' equity. b. increa
CAPM, Risk: For each of the scenarios below, explain whether or not it represents a diversifiable or an undiversifiable risk. Please consider the issues from the viewpoint of investors. Explain your reasoning.
1. For each of the scenarios below, explain whether or not it represents a diversifiable or an undiversifiable risk. Please consider the issues from the viewpoint of investors. Explain your reasoning. a. A large fire severely damages three major U.S. cities. b. A substantial unexpected rise in the price of oil. c. A ma
1. Which of the following is not considered an asset? A. Equipment B. Dividends C. Accounts receivable D. Inventory Answer: _______________ 2. These are selected account balances on December 31, 2010. Land (location of the corporation's office building) $100,000 Land (held for future use) 150,000 C
McMaster Inc, has a times interest earned ratio of 4.0. Based on this ratio, a creditor knows that McMasters EBIT must decline by more than____ before McMaster will be unable to cover its interest expense. A 33% B 40% C 67% D 75% E 80% A firm has sales of $500, total assets of $300 and a debt-equity ratio of 2. If its
Please help with the following problem. Provide step by step calculations for each. You own 8% of the Standlee Corporation's common stock, which most recently sold for $98 before a planned two-for-one stock split announcement. Before the split there are 30,000 shares of common stock outstanding. a. Relative to now, what wil
Please see attached document. Toxemia Salsa Company manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's income statement segmented by flavor (brackets indiciate a negative amount): Wimpy Mild Medium Hot Atomic Contribution
Devlin Company has two divisions, C and D. The overall company contribution margin ration is 30% with sales in the two divisions totaling $500,000. If variable expenses are $300,000 in Division C, and if Division C's contribution margin ratio is 25%, then sales in Division D must be?
Which of the following actions are likely to reduce the length of a company's cash conversion cycle?
1. Which of the following actions are likely to reduce the length of a company's cash conversion cycle? a. Adopting a just-in-time inventory system which reduces the inventory conversion period. b. Reducing the average days sales outstanding (DSO) on its accounts receivable. c. Reducing the amount of time the company takes
At Takoma Park University, they offer a multitude of courses each quarter. The students pay $1,200 per course. However, Dean Dong realizes that the tuition needs to be increased because of rising costs. After some analysis, Dean Dong determined that tuition needs to increase by $300 per course. At dinner one evening, Patsy P
I need some help to start in writing a 700-word paper in APA format with references evaluating the financial aspects of the American Red Cross. Answering these questions o How do they fund their programs? o How reliable are their funding sources? o Do they implement financial accountability measures to ensure that funds are
The Redford Investment Company bought 100 Cinema Corp warrants one year ago and would like to exercise them today. The warrants were purchased at $24 each, and they expire when trading ends today (assume there is no speculative premium left). Cinema Corp common stock is selling today for $50 per share. The exercise price is $
The Preston Toy Co has warrants outstanding that allow the holder to purchase a share of stock for $22. (exercise price) The common stock is currently selling for $28, while the warrant is selling for $9.25 per share. a. What is the intrinsic (minimum) value of this warrant? b. What is the speculative premium on this warr
23. Winslow Enterprises has total assets of $11,700, net working capital of $1,400, owner's equity of $5,000 and long-term debt of $3,500. What is the value of the current assets? 24. Gladstone, Inc., has net working capital of $4,300, long-term debt of $8,200, total debt of $10,100, and owners' equity of $12,000. What is the
Jones Co. currently is 100% equity financed. The company is considering changing its capital structure. More specifically, Jones' CFO is considering a recapitalization plan in which the firm would issue long-term debt with a yield of 9% and use the proceeds to repurchase common stock. The recapitalization would not change the
1. What is the meaning of the following sentence: Amortization affects the amount of interest expense? How does amortization of premium affect the amount of interest expense? How does amortization of discount affect the amount of interest expense? 2. Why might some stockholders be included to buy preferred stock rather th
Headquartered in Japan, Honda Motor Company is one of the major producers of quality motor vehicles around the world. Honda's quality, innovation and reliability has made it one of the most sought after car brands in the world.
Please show the work on how each problem is done 3) You are trying to save for $140,000 Ferrari. You have $30,000 to invest and your bank pays 4.2% annual interest. How long before you have enough to buy the car? 8) In a typical month, Curfman Company receives 100 checks totaling $75,000. These are delayed 4 days on a
McFugal, Inc. has expected sales of 20 million. Fixed operating cost are 2.5 million, and the variable cost ratio is 65 percent.
I am having trouble with the attached problems. 10. McFugal, Inc. has expected sales of 20 million. Fixed operating cost are 2.5 million, and the variable cost ratio is 65 percent. McFrugal has outstanding a 12 million, 8 percent bank loan. The firm also has outstanding 1 million share of common stock ($1 per value). M
21. In a world of no corporate taxes if the use of leverage does not change the value of the levered firm relative to the unlevered firm this is known as: MM Proposition III that the cost of stock is less than the cost of debt. MM Proposition I that leverage is invariant to market value. MM Proposit
11. The NuPress Valet Co. has an improved version of its hotel stand. The investment cost is expected to be $72 million and will return $13.5 million for 5 years in net cash flows. The ratio of debt to equity is 1 to 1. The cost of equity is 13%, the cost of debt is 9%, and the tax rate is 34%. The appropriate discount rate, ass
I need help in this area and suggestion if this is the right company to research the selected contemporary issue? Thank you!! How many credits will i need to answer following questions? evaluate the impact of mergers and acquisitions on Exxon/mobile In your evaluation be sure to address the following items:Describe your selecte
You just won the lottery for 1 million payable in annual installments of 200,000.00 with the first payment made in 1 year. Alternative, you could accept 850,000.00 today. Regardless on whether you take the 200,000.00 annually or the 850,000 today, you are confident yoiu could earn 8% each year on the payout or the next 5 yrs.
I am having trouble figuring out the effects of recapitalizing on the EPS. All equity firm, on 11/2/09 stockholder decide they don't want to put up 10,000000 and not borrow any debt so they recapitalize 5,000,000 in bonds at 5% with 5000,000 shares at $10. How do you calculate the threes scenarios EPS now that they have DEBT?