1. You own a stock portfolio invested 25% in stock Q, 20% in stock R, 15% in stock S, and 40% in stock T. The betas for these stocks are .84, 1.17, 1.11, and 1.36 respectively. What is the portfolio beta? 2. (Using CAPM) A stock has a beta of 1.05, the expected return on the market is 11 % and the risk-free rate is 5.2 %.
Consider the role of the finance department at On Your Mark. As a division manager, 1. How might the finance department help you to successful complete the duties of your job? 2. What role does a finance department play in valuing business opportunities for future acquisitions? 3. What are the ethical responsibilities of
As a division manager at On Your Mark, you are expected to work with the Finance department to develop financial forecasts for your division. Complete the following: 1. Prepare a document that explains why forecasting is important to an organization. 2. Explain the forecasting process, compare, and contrast it to the b
A governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures of $33,500,000, including capital outlay expenditures of $3,200,000. Capital assets for that government cost $56,000,000, including land of $3000,000. Depreciable assets are amortized over 20 years, on average. The rec
3. Using the values of St, K, rf , and T specified below, use your spreadsheet and trial and error (or Solver) to estimate the implied volatility (accurate to four decimal places) of a call with a price of $7.2568. St = $60.00 K = $60.00 rf = 0.02 T = 0.3333 (3 months).
Langston Labs has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Langston evaluates low-risk projects with a WACC of 8%, average projects at 10%, and high-risk projects at 12%. The company is considering the following projects: Project Ris
5. Your firm currently has $100 million in debt outstanding with a 10% interest rate. The terms of the loan require the firm to repay $25 million of the balance each year. Suppose that the marginal corporate tax rate is 40%, and that the interest tax shields have the same risk as the loan. What is the present value of the in
SAC is considering the purchase of new equipment to manufacture specialty spark plugs. The new equipment would allow the firm to manufacture 100,000 additional spark plugs per year and is expected to have a useful life of 5 years and to have no salvage value at that time. SAC will depreciate the equipment using the straigh
Given the following information: stockholders equity = $1,250; price/earnings ratio =10; shares outstanding =25; market/book ration =1.75. Calculate the market price of a share of the company's stock.
Question: Texas Products Inc has a division which makes burlap bags for the citrus industry. The unit has operating fixed costs of $12,000 per month, and it must sell 42,000 bags per month at $2.50 to break even. If the variable cost per bag is $2.00, what price must the division's total costs be?
You are given the following information: stockholder equity=$1,250 price/earning ratio=10 shares outstanding=25 market/book ration=1.75 Calculate the market price of a share of the company's stock?
Year Ended - Balance Sheet ($1,000s) Cash 20 Accounts Payable 20 Accounts Receivable 20 Notes Payable 40 Inventory 20 Long Term Debt 80 Fixed Assets 180 Common Stock 80 Retained Earnings 20
Can you help me with this assignment? Thanks! 4. At the beginning of 2006, Findlay Company received a three-year zero-interest-bearing $1,000 trade note. The market rate for equivalent notes was 8% at that time. Findlay reported this note as a $1,000 trade note receivable on its 2006 year-end statement of financial position
Can you help me understand this question? Write a paper comparing long and short term financing. Describe situations in which each type of financing would be used. Long Term: In business the requirement of loan is always there. You need to buy land, machinery, construction of the work shed. This type of expenditure requir
Grommit Engineering expects to have net income next year of $20.75 million and free cash flow of $22.155 million. Grommit's marginal corporate tax rate is 35%. a. If Grommit increases leverage so that its interest expense rises by $1 million, how will its net income change? b. For the same increase in interest expense, h
Southwestern Wear Inc. has the following balance sheet: Current assets $1,875,000 Accounts payable $375,000 Fixed Assets 1,875,000 Notes Payable 750,000 Subordinated debentures 750,000 Total debt 1,875,000 Common Equity 1,875,000 Total Assets 3,750,000 Total liabilities and equity $3,750,000 The t
How has the global investment banking process assisted the organization Johnson & Johnson?
A. Ezekial Distribution Co. has calculated its December 31, 2007 inventory on a FIFO basis at $250,000. The following information pertains to that inventory: Estimated selling price $255,000 Estimated cost of disposal 10,000 Normal profit margin
B18.(Default risk) You buy a very risky bond that promises a 9.5% coupon and return of the $1,000 principal in 10 years. You pay only $500 for the bond. a. You receive the coupon payments for three years and the bond defaults. After liquidating the firm, the bondholders receive a distribution of $150 per bond at the end of 3.
1) Tax-deferred employee benefits are a)Not subject to federal income tax b)Not subject to state income tax c)Taxed at some future time d)Are taxed at a special rate 2) If you plus $1,000 in a saving account and make no further deposits, what type of calculation could provide you with the value of the account in 20 years?
1) Money received today is worth more than the same amount of money received in the future. This is true because a)Money received today can grow at a compounded rate b)Future inflation will devalue your current investment c)All goods and services are likely to cost more in the future d)Unique investment opportunities exist t
During its first year of operations,Ritter Corporation had these transactions pertaining to its common stock. JAN. 10 ISSUED 90,000 SHARES FOR CASH AT $5 PER SHARE. JULY 1 ISSUED 50,000 SHARES FOR CASH AT $7 PER SHARE. INSTRUCTIONS A, JOURNALIZE THE TRANSACTIONS, ASSUMING THAT THE COMMON STOCK HAS A PAR VALUE OF $5 PER
On May 31, 2008 MF Summit Company had a cash balance per books of $6, 781.50. The bank statement from Little Bank on that date showed a balance of $6404.60. A comparison of the statement with the cash account revealed the following facts. 1. The statement included a debit memo of $40 for the printing of additional company che
What factors need to be considered when balancing productivity with quality in a service organization? What are the consequences of focusing on only one factor? How do finances influence the introduction of a new service?
Sue and Tom Wright are assistant professors at the local university. They each take home about $42,000 per year after taxes. Sue is 37 years of age, and Tom is 35. Their two children, Mike and Karen, are 11 and 9. Were either one to die, they estimate that the remaining family members would need about 75% of the present combi
Define the following terms and identify their role in finance: a. Finance b. Efficient Market c. Primary Market d. Secondary Market e. Risk f. Security g. Stock h. Bond i. Capital j. Debt k. Yield l. Rate of Return m. Return on Investment n. Cash Flow
Can a money market fund become insolvent in the same sense as a bank? Can there be a run on a money market fund?
I would like ideas for an essay on mark to market valuation of financial investment explaining how this change in accounting law will effect future earnings. In case of any uses of source, please use references. Mark to Market valuation of financial investment
Question 1: You invested $10,000 eight years ago. The arithmetic average is 10.9% and the geometric average return is 10.5%. What is the value of your portfolio today? Please show detailed step-by-step computations in how you were able to find this answer as I would like to use this example as a template to compute other pro
Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes. INSTRUCTIONS: For each item below, indicate whether it involves: 1) A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred