A highly risk-averse investor is considering adding one additional stock to a 4-stock portfolio. Two stocks are under consideration. Both have an expected return of 15%. However, the distribution of possible returns associated with Stock A has a standard deviation of 12%, while Stock B's standard deviation is 8%. Both stocks
Fixed Costs and Variable Costs Which of the following is an example of a variable cost? a. Insurance premium for fire insurance on the factory building b. The salary of the company president c. Wood used to make custom tables d. Rent for use of a storage warehouse e. Depreciation on the factory building Direct and Indir
Please see the attached file. 20. Which of the following represents the largest number of common shares? a. Treasury shares b. Issued shares c. Outstanding shares d. Authorized shares 21. Treasury stock is a. stock issued by the U.S. Treasury Department. b. stock purchased by a corporation and held as an
Assume you are interviewing for a part-time accounting job at Spilker & Associates, Inc., and the interviewer gives you the following list of company transactions in September 2006. Sept. 1 Received $150,000 for capital stock issued. Sept 2 Paid $20,000 cash to employees for wages earned in September 2006. Sept 4 Purchased
Silva Company had the following transactions: 1. Purchased a new building, paying $20,000 cash and issuing a note for $50,000. 2. Purchased $15,000 of inventory on account. 3. Sold inventory costing $5,000 for $6,000 on account. 4. Paid for inventory purchased on account (item 2). 5. Issued capital stock for $25,000. 6. Co
Using the company's selected SIRIUS satellite and XM radio satellite, compare the company's two most recent fiscal years based upon the following: a. Briefly discuss the inter-relationships noted among the data provided by each of the statements. b. Briefly describe where the key components of the basic accounting equatio
Question: What are the advantages and disadvantages to using a combination of debt, equity and stock to finance a project?
Assume you can buy a warrant for $5 that gives you the option to buy one share of common stock at $14 per share.
Price appreciation with a warrant Managerial Finance 11 text problem #13 Assume you can buy a warrant for $5 that gives you the option to buy one share of common stock at $14 per share. The stock is currently selling at $16 per share. a. What is the intrinsic value of the warrant? b. What is the speculative premium on the
What is the net profit margin id earning before interest and taxes is $20,000, net income is $10,000, sales are $50,000, and total assets are $100,000 What would be the future value of a loan of $1,000 for two years if the bank offered a 10% interest rate compounded semianually You receive $50,000 a year beginning one year
As manager of short-term projects, you are trying to decide whether or not to invest in a short-term project that pays one cash flow of $1,000 one year from today. The total cost of the project is $950. Your alternative investment is to deposit the money in a one-year bank Certificate of Deposit which will pay 4% compounded annu
Trying to find the APR or Stated Rate Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) Semiannually 12.2%
Trying to solve for the unknown number of years. Present Value Years Interest Rate Future Value $ 560 8% $ 1,284 810
Stan Fawcett's company is considering producing a gear assembly that it now purchases from Salt Lake Supply, Inc. Salt Lake Supply charges $4 per unit with a minimum order of 3,000 units. Stan estimates that it will cost $24,000 to set up the process and then $1.82 per unit for labor and materials. Either choice would have the s
Please see attachment and answer the following problems. 12. You just received a gift of $500 from your grandmother and you are thinking about saving this money for graduation, which is four years away. You have your choice between Bank A, which is paying 7% for one-year deposits, and Bank B, which is paying 6% on one-year
20/4. Family A and family B both consist of a father, mother, and two children of school age. In family A both spouses have jobs outside the home and earn a combined income of $100,000 per year. In family B, only one spouse works outside the home and earns $100,000 per year. How do the financial circumstances and decisions fac
Please use collateralized debt obligations (CDOs) as an example to answer whether financial intermediaries always help reduce the exposure of investors to risk. If not, what lesson we have learned out of this?
Trying to find the external financing needed to support the 20% growth rate in sales of a company who is operating at full capacity and no debt or equity is issued with the following information: Sales for 2007 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout
How can a government be tempted to take a benefit it cannot afford? What sounds better, $250,000 of increased services or $187,500 less in expenditures? Let's look at an example where this paradox comes into play. The City is in a tight fiscal squeeze with lots of miles of roads with potholes. Current street repair operating eff
Goran Blomberg is interested in investing in a new rooms-only lodging property. He needs some financial projections for the proposed operations. He provides the following: 1. Room sales Average room rate $50 Average daily occupancy 65% Average rooms per day 50 2. Fixed labor- $12000/month 3. Other fixed expe
Please show work 1. A newly issued corporate bond has 20 years to maturity. The bond has a coupon rate of 8 percent and pays interest semiannually. Also the bond is callable in 6 years at a call price equal to 115 percent of par value. The par value of the bonds is #1,000. The yield to maturity is 7 percent. a. What is the b
Andre has asked you to evaluate his business, Andre's Hair Styling. Andre has five barbers working for him. (Andre is not one of them.) Each barber is paid $9.90 per hour and works a 40-hour week and a 50-week year, regardless of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Hair shampoo used on all
Which of the following is a primary market transaction? A. You sell 200 shares of IBM stock on the NYSE through your broker. B. You buy 200 shares of IBM stock from your brother. The trade is not made through a broker - you just give him cash and he gives you the stock. C. IBM issues 2 million shares of new sto
Who is the competition? What is the company's strategy? How do analysists feel about the company? How has the company performed over the past year? earing? sales? How has the stock performed over the past year? Why do u think the company is undervalue or overvalued? What do u think you recognize that market does not?
Rattner Robotics had 5 million in operating expenses. The company had net depreciation expenses of 1 million and interest expenses of 1 million, its corporate tax rate was 40%. The company has 14 million current assets and 4 million in non interest bearing current liabilities, it has 15 million in net plant and equipment. It est
10.) Easy Tech Software Corp. is evaluating the production of a new software product to compete with the popular word processing software currently available. Annual fixed costs of producing the item are estimated at $150,000 and the variable cost is $10 per unit. The current selling price of the item is $35 per unit, and the a
Abstract: Falling prices for core computing components, rapid advancement in speech recognition technology and head-worn display products are fueling a phenomenal growth in the wearable computer market. One impetus for sales is the ability of wearable computers to produce cost savings and improve customer service, triggering
1. Johnson Enterprises borrowed $100,000 on July 1, 2003 to finance the purchase of a building. The mortgage requires payments of $3225 to be made at the end of every quarter for 15 years. The first payment is to be made on September 30th. The interest rate on the mortgage is 10%. 1. Prepare an amortization schedule for 20
4. The Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the company. 10. If the maximum operating capacity of the Evergreen Ferti
Details: The presentation to the Board went extremely well, and you made some clear points about the need to expand in the U.S. and abroad. One question that arose during the meeting was about how the firm's profitability in their toothpaste division would be impacted by the expansion. The Board asked you to assess the profi
Review the annual reports of these two companies: 1?Lennar- (home builder company) 2?Toll Brothers- (home builders Co) After reviewing: Identify and define the key industry success factors. Create a competitive ranking metric based on the key industry success factors. Use a weighted average approach.