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Stock Values and Growth Opportunities

I need to have the formulas and intermediate steps provided along with the answers. 1. Stock Values The Brennan Co. just paid a dividend of $1.40 per share on its stock. The dividends are expected to grow at a constant rate of 6% per year indefinitely. If investors require a 12% return on the Brennan Co. stock, what is the c

Investment Questions

1. Sam's Company expects to pay a dividend of $6 per share at the end of year one, $9 per share at the end of year two, and then be sold for $136 per share at the end of year two. If the required rate on the stock is 20%, what is the current value of the stock? 2. FastGrow is a no growth firm and has 2 million

Managerial Finance - Sam Jones

Sam Jones is a pharmacist earning $90,000 per year and he is deciding whether to purchase a pharmacy and become the owner/manager of a business that generates revenue of $500,000 per year. The pharmacy has expenses of $200,000/yr. for supplies, $75,000/yr. for hired help, $50,000/yr. for rent, and $10,000 for utilities. You m

Expected Return

The market and Stock J have the following probability distributions: Probability rm rj 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 the market and Stock J. C. Calculate the coefficient of variat

Stock Projections

Garrett Corp. has been going through a difficult financial period. Over the past three year, its stock price has dropped from $50 to $18 per share. Throughout this downturn, Garrett has managed to pay a $1 dividend each year. Management feels the worst is over but intends to maintain the $1 dividend for three more years, after w

Margin Buying

Discuss margin buying of common stocks. Include in your discussion the advantages and disadvantages, the types of margin requirements, how these requirements are met, and who determines these requirements.

Multiple Choice Questions- Financial Markets

Multiple Choice Questions: 1. The interest rate charged by banks with excess reserves at a Federal Reserve Bank to banks needing overnight loans to meet reserve requirements is called the_________. A) prime rate B) discount rate C) federal funds rate D) call money rate E) money market rate 2. You want to purch

Multiple Choice- Financial Markets

Multiple Choice Questions: 1. Assume that you manage a $10.00 million mutual fund that has a beta of 1.05 and a 12.00% required return. The risk-free rate is 4.75%. You now receive another $10.00 million, which you invest in stocks with an average beta of 0.65. What is the required rate of return on the new $20.00 million por

Multiple Choice- Financial Markets

Multiple Choice Questions: 1. XYZ Inc.'s stock has a 50% chance of producing a 30% return, a 25% chance of producing a 9% return, and a 25% chance of producing a -25% return. What is XYZ's expected return? A. 14.4% B. 15.2% C. 16.0% D. 16.8% E. 17.6% 2. An investor has a 2-stock portfolio with $50,000 invested in S

Demand, Market Surveys, Market Experiments, Linear Regression

OTA, please assist with the following questions based on your business experience and education. Please cite any sources. A) How do you think Apple Computer determines demand, market surveys, market experiments, linear regression? B) Do you think Apple computer stock will continue to rise? C) How has the software market

Types of Mortgages

Here is a type of mortgage problem that I always have trouble with. I think I can get the first part just fine but get stuck on part 2. If you can work it out slowly, it would be helpful. Question: You buy a house for $500,000 and put 20% down payment. You get a 30 year fixed rate mortgage at 6.2% . A) What is your

Multiple Choice Questions Finance/Stock Markets

Multiple Choice Questions : 1. Which of the following statements is most correct? a. A good goal for a corporate manager is maximization of expected EPS. b. Most business in the US is conducted by corporations; corporations' popularity results primarily from their favorable tax treatment. c. A good example of an agen

Estimate the value of a privately-held firm based on the following information

1. Estimate the value of a privately-held firm based on the following information: total market value (or capitalization value) of a comparable firm = $200,000; net income of a comparable firm = $40,000; number of shares outstanding of the comparable firm = 20,000; net income for the target firm - $15,000; number of shares outst

A venture capitalist wants to estimate the value of a new venture.

A venture capitalist wants to estimate the value of a new venture. The venture is not expected to produce net income or earnings until the end of year 5 when the net income is estimated at $1,600,000. A publicly-traded competitor or "comparable firm" has current earnings of $1,000,000 and a market capitalization value of $10,000

Short Term Volatility

The Gold Rush Mining Company is concerned about short-term volatility in its revenues. Gold currently sells for $300 an ounce, but the price is volatile and could fall as low as $280 or rise as high as $320 in the next month. The company will bring 1,000 ounces to the market next month. a. What will be total revenues if the fi

Reconciling analyst's views

You are a junior analyst at a well-known mutual fund company (i.e., a buy-side analyst) and are assigned to value, say, the stock of General Electric. You look around at what famous analysts have written and you find one who says that the stock is overpriced at its current price (roughly $42/ share as of October 9, 2007). Anot

The Stafford Coal Seam

The Stafford coal seam contains 25,000 tons of coal. It costs $100 per ton to extract the coal and deliver it to the market. (This is a constant marginal cost). The demand for coal can be represented by the following inverse demand equation: P = 600 - 0.02*Q. a. If you were only concerned with this period, what would the o

UTC: Evaluate The New Membership Plan and Fee Structure

Required: Your consulting firm has been hired to help UTC evaluate its new fee structure. Write a letter to the club's president answering the following questions. 1. Will Urban Tennis Club's new membership plan and fee structure improve its ability to plan its cash receipts? Explain your answer. 2. Urban Tennis C


John Wilson is a conservative investor who has asked your advice about two bonds he is considering. One is seasoned issue of the Capri Fashion Company that was first sold 22 years ago at a face value of $1000, with a 25-year term, paying 6%. The other is a new 30-year issue of the Gantry Elevator Company that is coming out now a

Finance Questions - The XYZ Electric Company

Total Assets: $12,500,000 Total Liabilities: $8,500,000 Common Shares Outstanding: 200,000 Preferred Shares Outstanding: 50,000 Common Stock Par Value: $1 Preferred Stock Par Value: $50 Common Stock Dividends: $200,000 Preferred Stock Dividends: $150,000 Earnings After Taxes: $500,000 What is the EPS

The spread in the annual prices of stocks selling for under $10

I have the following problem to figure out and I am completely lost: The spread in the annual prices of stocks selling for under $10 and the spread in prices of those selling for over $60 are to be compared. The mean price of the stocks selling for under $10 is $5.25 and the standard deviation $1.52. The mean price of those

Strategies for Testing Internal Controls and Risk

1a. Briefly describe three strategies for testing internal controls when information technology is used for significant accounting processing. b. Identify two strategies that might be used to support a low control risk assessment. Discuss the difference between the two strategies. c. Discuss a third audit strategy that mig


1. Construct a comparison of Wal-Mart's and the industry's income statements around 1990 and quantify Wal-Mart's advantages. 2. Evaluate Wal-Mart's diversification into Sam's Clubs and supercenters.

Finance - Louis Nicosia operates four 7-11 stores

Louis Nicosia operates four 7-11 stores. He has just received the monthly bank statement at October 31 from City National Bank, and the statement shows an ending balance of $3,840. Listed on the statement are an EFT rent collection of $400, a service charge of $12, two NSF checks totaling $74, and a $9 charge for printed checks.

The Value of Money

Charlie owes Joe $8000 on a note that is due in five years with accumulated interest at 6%. Joe has an investment opportunity now that he thinks will earn 18%. There's a chance, however, that it will earn as little as 4%. A bank has offered to discount the note at 14% and give Joe cash that he can invest today. Q. a. How