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Market Efficiency

Discuss the following two scenarios. Scenario 1: Is the following statement true or false? Explain. When the 56-year-old founder of Gulf & Western, Inc. died of a heart attack, the stock price immediately jumped from $18.00 a share to $20.25, a 12.5% increase. This is evidence of market inefficiency because an effici

Calculating Present and Future Value and Loan Amortizations

2. If you require a 9 percent return on your investments, which would you prefer? a. $5,000 today b. $15,000 five years from today c. $1,000 per year for 15 years 4. The Mutual Assurance and Life Company is offering an insurance policy under either of the following two terms: a. Make a series of 12 payments of $1,200 at

Mathematics of Finance

Show each formula and all work. #37: Find the amount of each payment that must be made into a sinking fund to accumulate each amount. (Recall, in a sinking fund, payments are made at the end of every interest period.) 233,188; money earns 9.7% compounded quarterly for 7 3/4 years ______________________________________

Rate of returns, standard deviations, coefficents of variation

Please see attached file. The market and Stock J have tire following probability distributions: Expected Returns Probability rM, rl 0.3 15% 20% 0.4 9 5 0.3 18 12 a. Calculate the expected rates of return for the market and Stock J. b. Calculate the standard deviations for t

Expected return, standard deviation, and coefficent of variation

Please see attached. 1-1 A stock's return has the following distribution Demand of the company Product Probability of this demand occurring Rate of Return if this demand occurs Weak 0.1 (50%) Below Average 0.2 (5) Average 0.4 16 Above Average 0.2 25 Strong 0.1 60 1 Calculat

EFN: What is the amount of external financing needed for Martin, Inc.?

Please see the attached problem. EFN: The most recent financial statements for Martin, Inc., are shown here: INCOME STATEMENT BALANCE SHEET Sales $19,200 Assets $93,000 Debt $20,400 Costs $15550 Equity $72,600 Taxable income $ 3,650 Total $93,000 Total $93,000 Taxes (34%) 1,241 Ne

Additional funds needed

Please see the attached file. The Candy Company sales are forecasted to increase from $1000 in 2005 to $2000 in 2006. Here is the December 31, 2005, balance sheet: Cash $100 Accounts payable $50 Accounts receivable $200 Notes payable $150 Inventories $200 Accruals $50 Current assets $500 Current liabilit

Various Problems Related to Finance

1. Electronics Unlimited has the following capital structure: 60% stock, 10 % preferred stock, and 30% in debt. The after-tax cost of debt is 8%, the cost of preferred stock is 10%, and the cost of common stock is 12%. What is the Weighted Cost of Capital (WACC). 2. Your company's fixed costs are $2 million and variable co

Community foundations

Identify a community foundation in your area. Then write a 700 word paper describing the organization and the projects it supports.

Corporations: retained earnings, par value, authorized, treasury stock

See file attached. 26. The term "Retained Earnings" is best explained by which of the following statements? (Points: 2) Money set aside for the redemption of bonds A measure of equity generated by a corporation through its operating activities. Cash retained in a separate bank account designated f

Multi-product Breakeven Decision

Multiproduct breakeven decision making. Evenkeel Corporation manufactures and sells one product- an infant car seat called Plumar- at a price of $50. Variable cost equals 20 per car seat. Fixed costs are $495,000. Evenkeel manufactures Plumar upon the receipt of orders from its customers. In 2003, it sold 30,000 units of Pl

Common Stock Value: Variable Growth

Newman Manufacturing is considering a cash purchase of the stock of Grip Tool. During the year just completed, Grips earned $4.25 par share and paid cash dividends of $2.55 per share. Grips' earnings and dividends are expected to grow at 25% per year for the next 3 years, after which they are expected to grow at 10% per year to

How Breaking Even Might Be A Good Business Decision

The chapter stresses the need to recover the full cost of capital for future endeavors. Can you think of an instance when "breaking even" would be a good business decision? Think of the ethical side of being an employer in your decision.

Risk and Return

X comapny is considering the pruchase of one of two microfilm cameras, R and S. Both should provide benefits over a 10-year period, and each requires an initial investment of $4,000. Management has constructed the table of estimates as follows. Camera R Camera S

Toyota's New Preferred Stock Offering

Toyota has decided to offer new preferred stock for sale that it will call an 8-8 offering. This stock will pay an annual dividend of $8 a share starting 8 years from now. If your required return is 8 percent, how much are you willing to pay for one share of this stock today?

Excel vs Quattro Pro

As a result of your work on the high school reunion project, you decide to learn more about Excel and the many uses of spreadsheet applications. You know that there are other spreadsheet applications on the market, but you do not know how these applications compare to Excel. After doing some research you find that Quattro Pro is


The director of marketing for Eastern Computer Co., Callie Keller, had the following discussion with the company controller, Isaiah Johnson, on July 26 of the current year: Callie: Isaiah, it looks like I'm going to spend much less than indicated on my July budget. Isaiah: I'm glad to hear it. Callie: Well, I'm not so sure it's

Avon Products Inc: financial analysis with ratios

I need to perform a financial analysis on Avon Products Inc. to include liquidity, efficiency, and profitability ratios, asset management, debit management, and market returns from the last annual report. Based on the analysis, identify the key strengths and weakneses of the company's financial position. Also, recommend how the

Financial Plan and Cash Flow Statement

You are CFO for your company and you have been given the task of financial planning for a new product to increase corporate earnings per share. Goal is to maximize shareholder wealth of your product. Use equity and debt financing to obtain $10,000,000 of budgeted funds for development of the product. 1) Create a ca

Business and Finance - Word Problems

Please help with the following finance problems. (1) A grocery store sells peanuts for $3.20 per pound and cashews for $8 per pound. The grocer wants to make 100 pounds of a mixture of peanuts and cashews that can be sold for $4.40 per pound. How many pounds of each type of nut should the grocer use? (2) At a refreshment

Expected Return and Standard Deviation Alternatives

Please see the attached file. Problem 1 The risk and return profiles of Assets P and Q are given below along with the assigned probability of distributions. Economy Probability Possible Returns on P Possible Returns on O Boom .20 .19 .15 Normal .60 .15 .11 Recession .20 -.04 .05 a. Compute the expected return and