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1. The college of Business at tech is planning to begin an online MBA program. The initial start-up cost for computing equipment, facilities, course development is $350,000. The college plans to charge tuition f $18,000 per student per year. However, the university administration will charge the college $12,000 per student for t

Finance: Dividend Yield and the Equity Cost of Capital

Can you help me get started on these questions. I am having trouble understanding the concepts. Questions: 1. Krell industries has a share price of $22.00 today. If Krell is expected to pay a dividend of $0.88 this year, and its stock price is expected to grow to $23.54 at the end of the year, what is Krell's dividend yi

Conversion Price for Chocolate Factory's Convertible Debentures

Chocolate Factory's convertible debentures were issued at their $1,000 par value in 2007. At any time prior to maturity on February 1, 2027, a debenture holder can exchange a bond for 25 shares of common stock. What is the conversion price, Pc? a. $40.00 b. $42.00 c. $44.10 d. $46.31 e. $48.62 Show all work

Small business funding: Are junk bonds a viable source for expansion

John and I have been discussing my belief that junk bonds should not be allowed. John asked me to look at it from the issuer's point and I did. Let's say you and I started a small company several years ago and through our hard work, we have been very successful. We have paid our bills, made a good profit, but are still a me

Total Cost for Pension Funding

Pension Fund project which will be offered in 5 years, company purchases zero coupon U.S. Treasury Trust Certificates which mature in 5 years, when originally issued they were 12% coupons, 30 year U.S.Treasury bonds, the stripped Treasuries are currently priced to yield 10%, total maturity value is $6000000. What is the total c

Common stock and preferred stock

What are some similarities and differences between common stock and preferred stock? As a shareholder, would you want preferred or common stock? Why? As a corporation, would you rather issue preferred or common stock? Why?

Accounting 423 Study Guide questions 1, 2, 3, 37, 38, 41, 42, 43, 44, 48, 50

1. Which of the following best describes a possible result of treasury stock transactions by a corporation? a. May increase but not decrease retained earnings. b. May increase net income if the cost method is used. c. May decrease but not increase retained earnings. d. May decrease but not increase net income. 2. Which of

Financial Outcome from Management's Message to shareholders for SEC company

Using the most recent annual report and other financial statements submitted to the SEC, select a financial initiative from the "management's message" to the shareholders. Compare and contrast three potential financial outcomes that your Learning Team envisions for the proposed initiative(s). Evaluate your findings to determine

Declining Growth Stock valuation- Brushy Mountain Mining Company

Brushy Mountain Mining Company's ore reserves are being depleted, so its sales are falling. Also, its pit is getting deeper each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 4% per year. If D0 = $5 and rs = 15%, what is the value of Brushy mountain's stock

Constant Growth Valuation- Crisp's Cookware

You are considering an investment in the common stock of Crisp's Cookware. The stock is expected to pay a dividend of $2 a share at the end of the year (D1=$2.00).The stock has a beta equal to 0.9. The risk-free rate is 5.6%, and the market risk premium is 6%. The stock's dividend is expected to grow at some constant rate g. The

Corporate Finance

1.The Millennium Charitable Foundation, which is tax-exempt, issued debt last year at 8 percent to help finance a new playground facility in Chicago. This year the cost of debt is 15 percent higher; that is, firms that paid 10 percent for debt last year would be paying 11.5 percent this year. A. If the Millennium Charitable Fou


3. Which of the following does NOT always increase a company's market value? a. Increasing the expected growth rate of sales. b. Increasing the expected operating profitability (NOPAT/Sales). c. Decreasing the capital requirements (Capital/Sales). d. Decreasing the weighted average cost of capital. e. Increasing


31. Your uncle Fred just purchased a new boat. He brags to you about the low 7% interest rate (APR, monthly compounding) he obtained from the dealer. The rate is even lower than the rate he could have obtained on his home equity loan (8% APR, monthly compounding). If his tax rate is 25% and the interest on the home equity

Successful Industrial Policy

It may be argued that Japan's explicit promotion of its microchip industry was an excellent example of successful industrial policy. What criteria would you apply to determine whether such a policy is or is not successful? Judging from your own stated criteria, was Japan's exercise successful? Why or why not? Please explain

Finance: three investment choices; monthly payment for Oppenheimer Bank mortgage

4. You have found three investment choices for a one year deposit: 10% APR compound monthly, 10% APR compounded annually, and 9% APR compounded daily. Compute the EAR for each investment choice. (Assume there are 365 days in the year). 10. Oppenheimer Bank is offering a 30-year mortgage with an EAR of 5 3/8%,. If you p

Thomson One Stock Analysis: does stock beta predict change in stock price

Using the Thomson One site or site, choose three dividend-paying firms in three different industries. Determine the beta for each of these firms. Discuss the differences you observe. Next, find each stock's percentage stock price change for the past year. Also, find the percentage change in the S&P 500 i

Compare and contrast current and non-current assets

Compare and contrast current and non-current assets and address the following: - what are current assets? - what are non-current assets? - what differs between current and non-current assets? - what is the order of liquidity? - how does the order of liquidity apply to the balance sheet?

Solving for the Cross Rate and Call Premium

Questions: 1. The Swiss franc is selling for $.7681 and the British pound is selling for $1.6581. The cross rate between the franc and the pound is what? 2. Buchanan Corp. is refunding $12 million worth of 10% debt. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium?

The project projected IRR

Project with the following cash flow. What is the project's IRR? The project projected IRR can be less that the WACC (and even negative) in which case it will be rejected. Year: 0 1 2 3 4 Cash Flow: -1000. $250. $230 $210 $190

Financial modeling: Roseville Brewing Company

Financial Modeling for a Brewpub. Three entrepreneurs were looking to start a new brewpub near Sacramento, California called Roseville Brewing Company (RBC). (See the managerial application "Calculating Break-Even Points for a Brewpub.") Brewpubs provide two products to customers-food from the restaurant segment and freshly

Determining a Project's NPV: Example Problem

Considering a project that has the following cash flow and WACC data. What is the project's NPV? The project's NPV can be negative, in which case it will be rejected. WACC = 10% Year: 0 1 2 3 4 Cash Flows: -$1,000 $475 $475 $475 $475

Computation of Cash From Operating Activities

A company is considering a new project which I must analyze. Based on the following date, what is the project's Year 1 operating cash flow? Sales $22,000 Depreciation $8,000 Other Operating Cost $12,000 Tax Rate 35%.