Explore BrainMass


Dividend and Capital Gain Yield

Dividend and Capital Gain Yield A stock with a current price of $25 / share pays a current annual dividend of $2 which is expected to increase by 4% per year. What is the stock's capitalization rate?

Process oriented and cellular product oriented

Gearworks, Inc, manufactures parts for industrial machinery. The manufacturing process requires a variety of machines that grind, heat treat, and polish steel into various shapes. Three different product lines are produced using a traditional process-oriented plant layout as follows: A. Discuss the differences in traditional

Bottleneck identification and management at Perma-Clear Glass Company

Bottleneck identification and management at Perma-Clear Glass Company. Perma-clear Glass Company was founded in 1980 by Rob Samson and enjoyed rapid growth as demand for new construction materials exceeded supply. The company became efficient at converting large sheets of glass into various smaller dimensions demanded by resi

Expected price of Stock..

A stock just paid a dividend of 2.00$. Due to the introduction of a proprietary product, the dividend growth rate is expected to be 30% for the next two years, 15% for the years 3 and 4, and then return to a constant growth rate assumption of 4 percent thereafter. The required return on the stock is 18 percent. Calculate

California Clinics: What is the stock's value?

California Clinics, an investor-owned chain of ambulatory care clinics, just paid a dividend of $2 per share. The firm's dividend is expected to grow at a constant rate of 5% per year, and investors require a 15 % rate of return on the stock. 1. What is the stock's value? 2. Suppose the riskiness of the stock d

MAD, slope, intercept, regression equation, forecast

Using data in chart 6-11 calculate a moving average forecast for months 4 through 12 using weights of 3, 5,9 What is the MAD for this forecast? Using data in chart 6-11 calculate a 3-month moving average forecast for month 12. Time period actual rates $000 1 $445 2 478 3 525 4 660 5 570 6 600 7 632

Break-Even Analysis

Now, if Zebra's average cost (expenses) were $13.13 (per case) and the Distributors (wholesale) work on a 23% margin and the retailers work on a 20% margin; what would the income per case be for Zebra beer at the following three retails? Please check your answers to the following: 1. $4.99 per 6 pk.

Finance: What is the current market value of a share of RHM stock?

Assume RMH is expected to pay a total cash dividend of $5.60 next year and its dividends are expected to grow at a rate of 6% per year forever. Assuming annual dividend payments, what is the current market value of a share of RHM stock if the required return on RHM common stock is 10%?

Finance: Compute the cost of US bond

21. You buy $5,000 par value of U.S. government 10 1/4s09 bonds at a price of 99 seventy-three days into the interest period. If you pay a commission to your broker of $40, how much does the trade cost you, including accrued interest?

Assess personal goals for health, education, occupation and finances

1) I am a man trying to get muscular; please help me write about how I'm going to get in shape to be muscular in the next two years by working on my arms, legs and stomach. Remember I am male. How am I going to get muscular? What it takes with hard work? 2) I need permanent government job in the next 2 years. How am I going

Value of the preferred share

A firm issued a preferred stock which matures in 30 years and carries a maturity value of $45. The dividend is $4 per year over the 30 year period. The current market discount rate for this stock is 8%. What is the value of the preferred share?

Firm's Current Investment Opportunity

A firm's current investment opportunity schedule and the weighted marginal cost of capital schedule are shown below: Investment Opportunity IRR Initial Investment Schedule A 15% $200,000 B

Expected Return and Standard Deviation of Portfolio

Stock A has an expected return of 12% and a standard deviation of 40%. Stock B has an expected return of 18% and a standard deviation of 60%. The correlation coefficient between Stocks A and B is 0.2. What are the expected return and standard deviation of a portfolio invested 30% in Stock A and 70% in Stock B?

Boehm Incorporated: Value Per Share of company stock?

Boehm Incorporated is expected to pay a $1.50 per share dividend at the end of the year (i.e., D1 = $1.50). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, r, is 15%. What is the value per share of the company's stock?

What is your estimate of the stock's current price?

5. A company currently pays a dividend of $2 per share, Do = $2. It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years, then the dividend will grow at a constant rate of 7% thereafter. The company's stock has a beta equal to 1.2, the risk-free rate is 7.5%, and the market risk pre

Determining a sunk cost

Which one of the following is an example of a sunk cost? 1. $1500 of lost sales because an item was out of stock 2. $1200 paid to repair a machine last year 3. $20000 project that must be forfeited if another project is accepted 4. $4500 reduction in current dress sales if a store starts selling coats 5. $1800 increase in


Here is a condensed version of your firm's balance sheet: Total Liabilities $30, 000, 000 Preferred Stock 10, 000, 000 Common Stock 60, 000, 000 Total Assets $100, 000, 000 Total Liabilities & Equity $100, 000, 000 If your firm's aftertax cost of debt is 6%, the cost of preferred stock is 10%, and the cost of com


Suppose the RiskFree Rate is 8%, the Expected Return this year on the S&P 500 stock market index is 13%, and the stock of Joe's Junkyard has a Beta of 1.4. Given these conditions what is the required rate of return for Joe's stock?

Aftertax cost in percent of the new loan

To raise money to finance the capital budget projects you've been evaluating, your firm plans to borrow money at an interest rate of 14%, before-tax. If your firm's effective tax rate is 40%, what is the aftertax cost in percent of the new loan?

Pro forma financial statements..

If you constructed a set of pro forma financial statements for 2005 and found that projected Total Assets exceeded projected Total Liabilities and Equity by $11,250, you would know that: a. your forecasting method is inaccurate b. your forecasting assumptions or calculations must be in error, because projected Assets

Gross Profit for 2005

Consider the following condensed Income Statement: 2004 Sales $8,000,000 COGS 6,500,000 Gross Profit 1,500,000 Sales growth in 2005 is expected to be 15% If COGS is assumed to vary directly with sales, then Gross Profit for 2005 will be:

Finance Concepts: After-Tax Yields On Investments

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

Furniture Store Addition of Appliances for Sale

Please help with the following problem. A large furniture store is considering adding appliances to its sales. Which of the following should be considered to purchase the appliance inventory? 1. utilizing the credit offered by a supplier to purchase the appliance inventory 2. benefiting from increased furniture sales to

The new mid range spa will sell for $8,000. What is the value of the erosion?

A Spa Company currently sells 300 Class A spas, 450 Class C Spas and 200 deluxe model spas each year. The firm is considering adding a mid class spa and expects that if it does it can sell 375 of them. However if the new spa is added Class A sales are expected to decline to 225 units while the Class C Sales are expected to de

How much will you pay for a share of stock today?

A Store paid an annual dividend of $11.15 per share last month. Today the company announced that future dividends will be increasing by 2.6 % annually. If you require a 12% rate of return how much will you pay to purchase one share of stock today?