Assume a thirty year loan of B=$100,000, constant borrowing rate r = 9% , inflation rate f = 3% and monthly repayments (i.e. m=12). Compute monthly repayments.
Share A has an expected return of 15% and standard deviation of 14%. Share B has an expected return of 23% and a standard deviation of 18%. Correlation between Share A & B is 0.3 Share A has 30% invested and Share B has 70%. (a) What is the expected return and the standard deviation of return on the portfolio? (b) Rec
Financial analysts believe that there are four equally likely states of the economy: depression, recession, normal, and boom times. The returns on the Supertech Company are expected to follow the economy closely, while the returns on the Slowpoke Company are not. The return predictions are as follows:
I need to research risk mitigation techniques for amazon.com. But I don't know exactly what these techniques are. Can you explain to me what a risk mitigation technique is, so I can fully research it for my paper?
ABC, Inc. has a P/E ratio of 12 and maintains a dividend payout rate of 40%. The stock price of ABC, Inc. on January 1 is $32. What would the value of the stock be if the dividend payout ratio was 60%? (Please use Excel)
3-15: Compute the missing amounts for companies A, B, and C. A B C Cash . . . . . . . . . . . . . . . $45,000 $ 4,500 $18,000 Accounts receivable . . . . . . . . 10,000 10,000 14,000 Land and buildings . . . . . . . 75,000 ? 50,000 Accounts payable . . . . . .
Mower Manufacturing's income statement for January 2006 is given below. Sales (25,000 units × $25) $625,000 Less variable costs 468,750 Contribution margin $156,250 Less fixed costs 125,000 Profit $ 31,250 1. Calculate the company's break-even point in sales dollars and units. 2. The company is contemplating the pu
You are an analyst studying Beranek Technologies, which was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a $0.50 dividend 3 years from today, then to increase it at a r
Gary Wells Inc. plans to issue perpetual preferred stock with an annual dividend of $6.50 per share. If the required return on this 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
11. Default risk premium: A company's 5 year bonds are yielding 7.75% per year. Treasury bonds with the same maturity are yielding 5.2% pre year, and the real risk free rate (r*) is 2.3 %. The average inflation premium is 2.5% and the maturity risk premium is estimated to be 0.1 x (t-1)%, where t=number of years to maturity. If
The partnership has arranged financing in the amount of $1, 034, 600 at 7% compounded semi-annually, with a 15 year amortization and 5 year term, a. How many months b. payment? c. Interest for first month
Based on some information I need some guidance on how to figure out what the value of a share of common stock is: After-tax operating income=$500 million Depreciation expense=$100 million Capital expenditures=$200 million No change in net working capital Free cash flow is expected to grow by 6% per year Cost of equity is
4. Pierre Imports will be liquidated. Its current balance sheet is shown below. Fixed assets are sold for $900,000 and current assets are sold for $700,000. All fixed assets are pledged as collateral for mortgage bonds. Subordinated debentures are subordinate only to notes payable. Trustee costs are $70,000. Sale of cu
1)Contribution margin may be express as: A) A percentage of revenue (B) A total dollar amount for the period (C) A contribution margin per unit (D) All of the above 2) Operating income can be calculated by: A) Fixed cost divided by contribution margin ratio (B) Fixed costs multiplied by contribution margin ratio (C) Margin
1) A process cost system is highly desirable when a company is producing custom made goods. A) True (B) False 2)All of the following are characteristics of the product of process costing except: A) High volume (B) Different amount of direct material (C) Identical amount of direct material (D) Repetitive operation 3) If 8
On January 30, Tensing Company purchased supplies of $2,000. The supplies were all consumed in February. Which of the following statements is true regarding the accounting for these supplies. A) The supplies should be recorded as an asset in January and no adjusting entry is needed until the supplies are used in Febr
1. The MBI Company does not want to grow. The company's financial management believes it has no positive NPV projects. The company's operating financial characteristics are Profit margin = 10% Assets-sales ratio = 150% Debt-equity ratio = 100% Dividend-payout ratio = 50% Calculate the sustainable growth rate for the MBI
Describes a process in broad terms of dynamically matching capacity to demand. But a viable alternative is a constant production rate to maximize production efficiency. What are the trade-offs between the two approaches?
1. Indicate how each of the following international transactions is entered into the U.S. balance of payments with double-entry bookkeeping: (a) A U.S. resident imports $500 worth of merchandise from a U.K. resident and agrees to pay in three months. (b) After the three months, the U.S. resident pays for his imports by drawi
What is the approximate value of a company that earns $5 this year if you wish to earn a 10% return and the companys earnings are expected to grow at 5%? a. $50 b. $75 c. $100 d. $150 What is the approx value of a company that earns $5.00 this yar if you wish to earn a 10% return and the comapny's earnings are expec
Looking at PepsiC 2006 annual report answer the question using the following initiatives. PepsiCo will position its products as the favorites in the Asian market. To achieve this, the company will: Description of strategic planning initiatives Build 2 production plants in China. Build a network of distribution centers.
I need to compare Pepsi and Coca-Cola's two most recent fiscal years based upon operating profitability, asset utilization and risk management. I have already completed asset utilization and risk management. What I need help with is operating profitability and a brief introduction.
The factoring department of Inter American Bank (IAB) is processing 100,000 invoices per year with an average invoice value of $1,500. IAB buys the account receivables at 3.5 percent off the invoice value. Currently, 2.5 percent of the accounts receivable turns out to be bad debt. The annual operating expense of this departme
1. Romeo & Juliette are competitors in selling college finance textbooks. The separate capital structures of each company are as follows: Romeo Juliette Debt @ 10% (interest) $500,000 Debt @ 10% (interest) $1,000,000 Common Stock 1,000,000 Common Stock 500,000 Total Capital $1,500,000 Total Capital $1,500,000 Shares O
1. Will you explain to me the relationship between inventory turnover and purchasing needs. 2. How can I elaborate (or explain) this statement "rapid corporate growth in sales and profits can cause financing problems" 3. What are the advantage and disadvantage of level production schedules in firms with cyclical sales? 4. H
Delta manufacturing - Balance Sheet Cash & Marketable Securities $225,000 Account Receivables $890,000 Inventories (lower of cost or market $930,000 Prepaid Expenses $10,150 Accumulated Tax Prepayment $12,000 Current Assets $2,067,150 Fixed Assets at cost $2,500,000 Less: Accumulated Depreciati
True or False a. Financing for public corporations must flow through financial markets. b. Financing for private corporations must flow through financial intermediaries. c. The sale of policies is a source of financing for insurance companies. d. Almost all foreign-exchange trading occurs on the floors of the FOREX exchanges
Using the following data, compute cash flow from operating activities. Cash Inflow (Outflow) a. Cash received from sale of a building . . . . . . . . . . . . . . . . . . $ 5,600 b. Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (450) c. Cash paid to repay a loan . . . . . . . . . .
Susan Young is an attorney for a small law firm in Arizona. She is also a part-time inventor and an avid golfer. One day Susan's golf foursome included a man named Henry Jones, a manufacturer of Christmas ornaments. Henry explained to Susan that he manufactures an ornament everyone loves, but stores will not carry the ornaments
Computations: The following financial statements apply to the next six problems? Robert Manufacturing Balance Sheet December 31, XXXX Cash $ 200 Receivables 245 Inventory 625 Total Current Assets