You just returned from some traveling thoughout the Americas. You started your trip with $20,000 in your pocket. You spent 3.4 million pesos while in Chile and 16,500 bolivares in Venezuela. Then on the way home you spent 47,500 pesos in Mexico. How many dollars did you have left by the time you returned to the US given the foll
The common stock of US Air Inc. had annual returns of 15.6 %, 2.4 % , -11.8 % and 32.9% over the past 4 years respectively. What is the standard deviation of these returns.? a. 13.29 percent b. 14.14 percent c. 16.50 percent d. 17.78 percent e. 19.05 percent
Able Machinery is analyzing a proposed project. The company expects to sell 2,100 units give or take 5%. The expected variable cost per unit is $260. and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 4 % range. The depreciation expense is $129,000. The sales price is estima
1. White Wedding Corporation will pay a $3.05 per share dividend next year. The company pledges to increase its dividend by 5.25 percent per year, indefinitely. If you require an 11 percent return on your investment, how much will you pay for the company's stock today? 2. Fama's Lamas has a weighted average cost of capital of
6. You have the following data on three stocks shown below. You decide to use the data on these stocks to form an index, and you want to find the average earned rate of return for 2008 on your index. If you follow the averaging procedure used to calculate the S&P 500 Index return, what would your index's rate of return be? Hi
6. Gary Wells Inc. plans to issue perpetual preferred sotck with an annual dividend of $6.50 per share. If the required return on theis preferred stock is 6.5%, at what price should the stock sell? a. $90.37 b. $92.69 c. $95.06 d. $97.50 e. $100.00
Assume that markets are efficient. During a trading day American Golf Inc, announces that it has lost a contract for a large golfing project that, prior to the news, it was widely believed to have secured. If the market is efficient, how should the stock price react to this information if no additional information is released?
For each of the following scenarios, discuss whether profit opportunities exist from trading in the stock of the firm under the conditions that (1) the market is not weak form efficient, (2) the market is weak form but not semistrong form efficient, (3) the market is semistrong form but not strong form efficient, and (4) the mar
The Wei Company's last dividend was $1.75. The dividend growth rate is expected to be constant at 1.50% for 2 years, after which dividends are expected to grow at a rate of 8.00% forever. Wei's required return (rs) is 12.00%. What is Wei's current stock price?
If the cost function for a commodity is: C(x)= (1/90)x^3+ 4x^2+ 4x+10 dollars Then find the marginal cost at x=3 units and tell what this predicts about the cost of producing 1 additional unit and 2 additional units. Make sure to show all steps in your work.
Jumpdisk Company writes checks averaging $15,000 a day, and it takes 5 days for these checks to clear. The firm also receives checks in the amount of $17,000 per day, but the firm loses three days while its receipts are being deposited and cleared. What is the firm's net float in dollars?
See attached file. Phoenix Corp. needs $500,000 to finance its growth and it approached a venture capitalist (VC) firm to fund its future growth in business. The VC may agree to supply the funds if terms are acceptable. It asked Phoenix to provide an estimate of EBIT for the next eight years which are given below: Year
If I run a call center for a software company whose sole purpose in life involves helping the customers install the product, would you think I would be a manager of a cost center, a profit center or an investment center?
Baxter Video Products' sales are expected to increase from $5 million in 2007 to $6 million in 2008 or by 20%. Its assets totaled $3 million at the end of 2007. Baxter is at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2007, current liabilities were $1 million, consisting of $2
If the financial market is efficient a. stock prices should remain constant b. stock prices should increase or decrease slowly c. an increase in the value of security should be offset by a decrease d. stock prices will only change when an envent actually occurs e. stoch prices should only respond to unexpected news and e
A preferred stock pays an annual dividend of $7.00. What is one share of this stock worth to you today if you require a 14% rate of return?
Consider the following two, completely separate, economies. The expected return and volatility of all stocks in both economies is the same. In the first economy, all stocks move together in good times all prices rise together and in bad times they all fall together. In the second economy, stock returns are independent
1. Define simple interest and compound interest. Explain the difference between each. 2. Define annual percentage rate (APR). What effect does frequency of compounding have on the annual percentage yield (APY)? What condition would exist if the APR = APY? 3. What is an ordinary annuity? What is an annuity due? Which is mor
IPrepare a summary comparing Sirius Satellite Radio and XM Satellite Radio's recent fiscal years statements based on the profitability ratios & efficiency levels. Discuss profitability ratios: choose 2 ratios within this category to discuss and relate to our company of choice. Discuss management efficiency ratios: choose 2
Describe the goal of a portfolio owner in terms of risk and return. How does he or she evaluate the risk characteristics of stocks being considered for addition to the portfolio?
As a tool for risk analysis; what are the advantages and disadvantages of sensitivity analysis?
What types of utility curves (increasing, decreasing, or constant marginal utility of wealth) are generally associated with each of the following attitudes toward risk: (a) risk-averse, (b) risk-neutral, and (c) risk-seeking?
What weakness of the standard deviation is overcome through the use of the coefficient of variation?
Dividend and Capital Gain Yield A stock with a current price of $25 / share pays a current annual dividend of $2 which is expected to increase by 4% per year. What is the stock's capitalization rate?
Gearworks, Inc, manufactures parts for industrial machinery. The manufacturing process requires a variety of machines that grind, heat treat, and polish steel into various shapes. Three different product lines are produced using a traditional process-oriented plant layout as follows: A. Discuss the differences in traditional
Bottleneck identification and management at Perma-Clear Glass Company. Perma-clear Glass Company was founded in 1980 by Rob Samson and enjoyed rapid growth as demand for new construction materials exceeded supply. The company became efficient at converting large sheets of glass into various smaller dimensions demanded by resi
A stock just paid a dividend of 2.00$. 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, 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
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
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.