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Corporate Finances

Investor A owns $1,000 worth of stock that does not pay a dividend. Investor B owns $1,000 of an equivalent stock that, after paying a dividend, becomes an investment in stock and cash: $900 in stock and $100 in dividend income. If the capital gains tax is lower than the tax on dividends, which investor has the better position:

Advanced Cost Accounting

T/F 1. Product costs become expenses in the period they are purchased. T/F 2. The difference in the amount of fixed overhead cost that is expensed to the income statement under absorption and variable costing is solely attributable to the difference between the number of units produced during the period and the number of un

The Allen Company has monthly credit sales of $600,000.

The Allen Company has monthly credit sales of $600,000. The average collection period is 90 days. The cost of production is 70 percent of the selling price. What is the Allen Company's average investment in accounts receivable? a. 2,000,000 b. 1,500,000 c. 1,800,000 d. 1,600,000

What must financial managers consider when operating in the global environment?

What must financial managers consider when operating in the global environment? What types of regulatory compliance might they face? What can they do to mitigate financial risk? Should we have global accounting standards? Why or why not? Examine at least four accounting regulatory bodies, and discuss how an organization compl

Louis Zimmer Company Statement of Cash Flows

1. What procedure(s) would you recommend for a multinational company in studying exposure to political risk? What actual strategies can be used to guard against such risk? 2. Suppose a Danish krone is selling for $0.1845 and a Maltese lira is selling for $2.7211. What is the exchange rate (cross rate) of the Danish krone to t

NPV's and IRRs for Mutually Exclusive Projects

Davis Industries must choose between a gas-powered and an electric -powered fork-lift truck for moving materials in its factory. Since both forklifts perform the same function, the firmwill choose only one. The electric truck will cost more but cost less to operate. Cost is $22,00 for the electric and the gas powered is $17

Short Finance Case

1. Use the overhead cost activity analysis in Exhibit 5 and other data on manufacturing costs to estimate product costs for valves, pumps, and flow controllers. 2. Why do the results of your analysis in (1) differ from the costs generated by the existing system and the one proposed by Peggy Alford? 3. What are the strategic im

Bayern Brauerei Finance Case

1. How would you describe Bayern Brauerei's current financial health with respect to: a. Growth b. Profitability c. Cost structure d. Working Capital 2. Evaluate the assumptions on which the 1993 and 1994 forecasted financial statements are based. 3. Evaluate the proposed expansion plan. 4. If you were Maria Ober, how w

Investment Questions

What is the difference between defined benefit and defined contribution? What are derivatives? How can they be used to manage a portfolio? What is an IRA? Is it important for an individual to have an IRA? Why or why not? How can you maximize the benefits of your employer's retirement fund?

Finance Short Case

Please read the attached case and answer the following questions. 1. What is the expected incremental profit from the Challenger bike? 2. What are the strategic risks and rewards? 3. What should Baldwin do? Why? Thank you very much in advance.

BETA in terms of Overall Risk of your Company

Using This Web Page, find the value of beta for your reference company. Write a two page paper discussing the following items: a. What does this beta mean in terms of the overall risk of your company as the shareholders perceive it? What are the implications for raising equity capital for your firm based on this beta? b.

Daimler Benz (German) - Chrysler

I'm doing some research on the Daimler Benz-Chrysler merger and need some extra guidance. What were the measurements that management planned to use to measure success of the deal? What is the expected impact on the combined company's capital structure? Any suggestions or ideas would be greatly appreciated. Graphs, cha

Coefficient of Variation

Bridget's Modeling Studios is considering opening in a new location in Miami. An aftertax cash flow of $120 per day (expected value) is projected for each of the two locations being evaluated. Which of these sites would you select based on the distribution of these cash flows (use the coefficient of variation as your measu

Yield to Maturity for the Heymann Company's bonds

The Heymann Company's bonds have 4 years remaining to maturity. Interest is paid annually; the bonds have a $1,000 par value; and the coupon interest rate is 9%. a/ What is the yield to maturity at a current market price of (1) $829 or (2) $1,104? b/ Would you pay $829 for one of these bonds if you thought that the appro

Five multi-choice questions concern shareholder basis in an S-corporation.

1. Keeping track of shareholder basis in S-Corporation stock is the responsibility of a. the corporation b. the shareholder 2. Knowing the basis in the stock is important a. for limiting the amount of loss a shareholder can deduct b. for limiting the amount of gain a shareholder must report 3. A non-taxable distribu

Financial Appraisal for ABC plc

ABC plc is considering launching a takeover bid for XYZ plc. The two companies are in the industry and have identical cost of equity capital, which is 12% after tax. Below is an extract of some financial data on both companies: ABC plc XYZ plc Earnings per share (eps) 50 pence 10 pence Dividend per share (dp

Finance multiple choice questions

If a stock rose from $10 to $30 over ten years, the annual rate of return: a. Was 20 percent. b. Was greater than 20 percent. c. Was less than 20 percent. d. Cannot be determined. 2. To determine the realized return on an investment, the investor needs to know: Income received. The cost of an

Corporate after tax yields/rate of return/finance problems

3-5 The Shrieves Corporation has $10,000 that it plans to invest in marketable securities. It is choosing among AT&T Bonds, which yield 7.5%, state of Florida muni bonds, which yield 5%, and AT & T preferred stock , with a dividend yield of 6%. Shrieves' corporate tax is rate is 35%, and 70% of the dividends received are tax

Financing issues when going public.

Describe the financing issues that an organization faces when it goes public. Include an example of a company which has had an initial public offering in the past three years to address the following: GOOGLE is the company that has be chosen. d. Source and application of funds

Finance Questions

1. Pick out a stock (you may wish to use:, company/key statistics, for example Microsoft and look up its Beta. What does that Beta tell you about the stock? Does it correlate to what you would expect? Why? 2. How has the Internet changed the way stocks are traded?

Stock Inter is a highly priced internet stock whose earnings in the coming year (E1) is expected to be $1 per share. Investors expect these earnings to grow at 80% (g) per year for the next 5 years. The growth rate is estimated by assuming that Dotnet reinvests 80% of its earnings (b= 0.8) at a return {R) of 100 % per year. Afte

Stock Price

Sarah wants to buy XYZ stock today. She estimates that it will be worth $490/share in exactly two-years from now, and she has a minimum return requirement of 15%. XYZ is not currently paying a dividend nor is it expected to pay one in the near future. What is the price Sarah should pay today for one share? a. $371 b. $4

Average annual rate of investment

An investor deposits $180,000 into a fixed, 5-year CD with annual compounding. At the maturity date, the CD is worth $211,000. What average annual rate was earned on this investment? a. 3.04% b. 3.23% c. 14.69% d. 17.22%

Finance/Accounting Problems: Dividend Policy

20. Dividend Policy. Here are several assertions about typical corporate dividend policies. Which of them are true? Write out a corrected version of any false statements. 1. Most companies set a target dividend payout ratio. 2. They set each year's dividend equal to the target payout ratio times that year's earnings. 3. Man


How do the objectives of evaluating financial conditions differ between internal managers and credit analysts? How are their objectives similar? Note: Cite the sources

Financial Performance

Explain the importance of evaluating governmental financial performance. Note: Cite the sources