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Managerial Finance - cumulative voting procedures of the Beasley Corporation case.

The Beasley Corporation has been experiencing declining earning, but has just announced a 50 percent salary increase for its top executives. A dissident group of stockholders wants to oust the existing board of directors. There are currently 11 directors and 30,000 shares of stock outstanding. Mr. Wright, the president of the co

Investment Decisions Questions

Q1 You have ?500,000 available to invest. The risk-free rate (which is also the rate at which you could borrow) is 8%, and there is a (risky) fund in which you could invest that has an expected return of 16%. What would you have to do to produce a portfolio with an expected return of 22%? Q2 In a world in which your investme

Taxation Case Brief

The case is THOR POWER TOOL CO. v. COMMISSIONER, 439 U.S. 522 (1979) I included the format & list of doctrines. I would appreciate any help. I am just not experienced in this area and need an example to look over.

Financial Management Overview

1) What are the primary responsibilities of a corporate financial staff? 2) Is stock price maximization good or bad for society? 3) Is maximizing stock price the same thing as maximizing profit?

Capital Structure, Leverage, and Sales

McGonnigal, InMcGonnigal, Inc. has expected sales of $40 million. Fixed operating costs are $5 million and the variable cost ratio is 65 percent. McGonnigal has outstanding a $10 million , 10 percent bank loan amd $3 million in 12 percent coupon-rate bonds. McGonnigal has outstanding 250,000 shares of $10 (dividend) p

Risk & Breakeven Analysis

13-3 Risk analysis a. Given the following information, calculate the expected value for Firm C's EPS. Data for Firms A and B are as follows: E(EPSA) = $5.10, and Standard Deviation of Firm A = $3.61; E(EPSB) = $4.20, and Standard Deviation of Firm B = $2.96.

weighted average cost of capital and IRR investments

Your company's weighted average cost of capital is 11%. You believe the company should make a particular investment, but the IRR of this investment is only 9%. What arguments might exist in support of your position? Is it really possible that making an investment with a return below your firm's cost of capital can ever c

Financial Market Scenarios

I. Question Details: Spreadsheet Exercise: Jane is considering investing in three different stocks or creating three distinct two-stock portfolios. Jane considers herself to be a rather conservative investor. She is able to obtain forecasted returns for the three securities for the years 2007 through 2013. The data are a

Earnings per share, Leverage

Winners Inc., a home appliances manufacturer, expects sales of 20,000 units at $5 per unit in the coming year and must meet the following obligations: Variable operating costs of $2 per unit, fixed operating costs of $10,000, interest of $20,000, and preferred stock dividends of $12,000. The firm is in the 40% tax bracket

How much of the 3% increase can be attributed to the buy back announcement

Using historical daily returns, you estimated the following Index model for ET incorporated: rET = .01% + 1.75 r S&P500 On February 15, 2007, ET announced its intention to buy back 1,000,000 of its 5,000,000 outstanding shares in the open market. ET stock price closed 3% higher than the close on February 14. How much of the

Breakpoint on the MCC where new stock will have to be issued

Your company is expected to earn $4.0 million in net income next year of which it will pay out 40% in dividends. If equity represents 50% of your capital, what is the breakpoint on the MCC where new stock will have to be issued? a. $2.4 million b. $3.2 million c. $4.0 million d. $4.8 million e. $8.0 million

Retained Earnings

Omega Sports has the following equity accounts on its balance sheet: Common stock ($.50 par, 900,000 shares) $ 450,000 Paid in excess 5,580,000 Retained earnings 21,204,000 Total common stockholders' equity $27,234,000 The current market price of the firm's shares is $20. If the firm declares

Real Estate Mortgage Calculations

Problem 1: A loan was made 10 years ago with an original balance of $1,000,000.00 at a fixed interest rate of 8.00% with equal monthly payments for 30 years. A. How much is the monthly payment? B. What is the balance today? C. What will the balance be at the end of 5 more years? D. When will the balance be paid down to 50

Explaining and Pricing Basic Financial Instruments

1) A year ago, a friend of yours made a loan to a reliable local business you have both known for many years. The business is doing well, and looks very likely to pay back the loan. Your friend now needs to raise some cash urgently for other business investments, and wishes to sell her loan on to someone. Interest rates are 5% a

Common stock with ROR

The Seneca Maintenance Company currently (as of year 0) pays a common stock dividend of $1.50 per share. Dividends are expected to grow at a rate of 11% per year for the next four years and then to continue growing thereafter at a rate of 5% per year. What is the current value of a share of Seneca common stock to an investor w

Identify debits, credits, and normal balances.

Help identify debits, credits, and normal balances. E2-1 H. Burns, Inc. Account Debited Account Credited Date Basic Type Specific Amount Effect Normal Balance Basic Type Specific Amount Effect Normal Balance Jan. 2 Asset Cash Increase Debit Stockholders Equity Common Stock Increase C

Rates of return and probabilities

See attached file for full problem description. Managerial Finance Week 4 Dropbox Chapter 6 Stock X a) b) Stock Y a) b) Probability Return Rate/Return Stand Dev Probability Return Rate/Return Stand Dev 0.1 -0.1 0.2 0.02 0.4 0.2 10 0.2 7 1.4 0.4 15 0.3

Common Stock

Elston Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2002, its first year of operation the company has the following stock transactions: Jan 15 Issued 500,000 shares of stock at $5 per share Jan 30 Attorneys for the company accepted 500 shares of common stock as payment of legal ser

FIN 327 INVESTMENTS: Assignment # 1 - Holding Period Returns

1) The following table provides month end prices and cash dividends from Exxon Mobil (XOM) for a recent two year period. Use these data to complete the following analyses. Date Price Dividend Dec-06 76.63 Nov-06 76.81 0.32 Oct-06 71.42 Sep-06 67.1 Aug-06 67.67 0.32

Investment Problem/Graph

5. In an effort to track the local economy Finance 327 has decided to create a San Diego stock market index. The index will be made up of four local stocks Sempra Energy (Ticker Symbol: SRE), Jack in the Box (JBX), Qualcomm (QCOM) and Diversa (DVSA). Download the historical prices from January 1, 2006 through December 31, 2006 f

Finance Questions

2-3 Assume that a risk-free rate is 6% and the market risk premium is 6%. What is the expected return for the overall stock market? What is the required rate of return on a stock that has a beta of 1.2? 2-4 Assume that the risk-free rate is 6% and the expected rate of return on the market is 13%.

Transactions: Like-kind Exchange, Stock, Bonds

44. Manuel exchanges a rental house at the beach with an adjusted basis of $150,000 and a fair market value of $125,000 for a rental house at the mountains with a fair market value of $100,000 and cash of $25,000. What is the recognized gain or loss? a. $0. b. $100,000. c. $25,000. d. ($25,000). e. None of the above. C

Chapter 11 Personal Finance Questions

Chapter 11 30. James has investments in two passive activities. Activity A, acquired three years ago, produces income in the current year of $175,000. Activity B, acquired last year, produces a loss of $275,000 in the current year. At the beginning of this year, James's at-risk amounts in Activities A and B are $150,000 a

Finance Accounting

At the beginning of 2004, Bellamy Company acquired equipment costing $60,000. It was estimated that this equipment would have a useful life of 6 years and a residual value of $6,000 at that time. The straight-line method of depreciation was considered the most appropriate to use with this type of equipment. Depreciation is to be

Finance Questions Financial Managment

Why do stock prices change? Suppose the expected D1 is $2, the growth rate is 5 percent and the required rate of return is 10%. Using the constant growth model, what is the price? What is the impact on stock price if the growth rate is 4% or 6%? If rate of return is 9% od 11%?

W.F. Bailey Company Ratio Analysis

W.F. Bailey Company had a quick ratio of 1.4, a current ratio of 3.0, an inventory turnover of 5 times, total current assets of $810,000, and cash and marketable securities of $120,000 in 2007. If the cost of goods sold equaled 86 percent of sales, what were Baileys annual sales and its DSO (days sales outstanding).

Finance Question - Degree of leverage

Van Auken Lumber: Income Statement for December 31, 2007 ($ thousand) Sales $36,000 Cost of goods sold (25,200) Gross Profit $10,800 Fixed operating costs (6,480) Earnings before interest and taxes $4,320 Interest (2,880) Earnings before taxes $1,440 Taxes (40%) (576) Net Income $ 864 Dividen