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Financial risk management-

Calculate the implied volatility of soybean futures prices from the following information concerning a European put on soybean futures: Current futures price 525 Exercise price 525 Risk-free rate 6% per annum Time to maturity 5 months Put price 20

Calculating PV etc.

I need to calculate the price for both the best and worst case scenarios. I have attached a spreadsheet with the best and worst cases. I want to calculate each using a discount rate of 9.7% and then also using 11.2%. This is the hint the teacher gave us, but i still cant figure it out: Your first step is to determine the

Investing in common stocks

Your father is a member of an investment club that invests in common stocks. He has asked you to help him with an assignment to research three stocks traded on the NYSE or NASDAQ and recommend one for purchase. Each club member has been assigned to research companies from a different stock sector. Use the Library, unit resources

Real Estate Investment

1. Distinguish between investing in properties located in the local economy and investing in properties located overseas. 2. Why is forecasting of income and expenses for a real property considered a challenging activity? 3. Why is the debt coverage ratio important to lenders?

Real Time Inc. Project Analysis

1. The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $40,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of $2,000. The computer would increase the firm's before-tax re

Stock question

Which of the following statements is most correct? a. The before-tax cost of preferred stock may be lower than the before-tax cost of debt, even though preferred stock is riskier than debt. b. If a company's stock price increases, this increases its cost of common stock. c. If the cost of equity capital increases, it must b

Company's cost of debt

A company has just been taken over by new management which believes that it can raise earnings before taxes (EBT) from $600 to $1,000, merely by cutting overtime pay and thus reducing the cost of goods sold. Prior to the change, the following data applied: Total assets: $8,000 Debt ratio: 45% Tax rate:

Charitable contribution problem

Kelly has AGI of $100,000 in 2006. She contributes stock in Tulip Corp. (a publicly traded corp.) to a State University (a qualified charitable org.) The stock is worth $59000 & she acquired it as an investment 2 years ago at a cost of $44,000. 1. What is the total amount that kelly can deduct as a charitable contribution, as

Finance Problems: HR Pickett, Liability, and AFN

Problem #1 The HR Pickett corporation has $500,000 of debt outstanding, and pays an interest rate of 10% annually, Pickett's annual sales are $2 millions, it's average tax rate is 30% , and it's net profit margin on sales 5%. If the company does not maintain a TIE ratio of at least 5 times, it's Bank's will refuse to renew the

Various Finance Questions

1- What should you consider when comparing fixed assets turnover of one firm to others? In other words, can you simply compare the ratios and explore the differences or should we strive to learn more before conducting such an analysis? 2 - Class, do you think it is easier to manipulate ratios that come from the balance sheet

Balance Sheets and Income Statements

I need some assistance in trying to analyze and answer the balance sheet and income statements for the attachment. The following are balance sheets for Scott Company as of the end of the Years 1 and 2: Balance Sheet Year 2 Year 1 Cash 189 50 Accounts Receivable 950 750 Inventory 500

Predatory Home Lending

As a homeowner, you often receive solicitations to open a home equity line of credit. They are enticing, but you know that a growing number of Americans have lost their homes in recent years due to becoming victim to predatory lenders. Some of these victims are consumers who try to free themselves from credit card debt through a

Bank Loan - Analysis of Small Businesses

SCENARIO 1 Mrs. Kumal Mubarek is the CEO of a small business in Bangladesh that produces mattresses. To keep up with increasing demand, she needed a bank loan to help build her company's capacity. But the bank she approached denied her loan application for whatever reason and she does not know where to turn. What would you do?

Finance net income and receivables turnover

If a company can expect an extra $2 million in sales if it enters a new market and it knows that 15% of its sales will be uncollectible, collection costs will be 2% on all new sales, and the company's production and selling costs are 80% of sales and it also has a tax rate of 30%, what will the company's net income be. Also

Additional Funds Needed with Excess Capacity

Sales for the year just ended were $400, and fixed assets were used at 80 percent of capacity, but its current assets were at optimal levels. Sales are expected to grow by 5 percent next year, and the dividend payout ratio is 60 percent. How much additional funds (APN) will be needed? A firm has the following balance sheet (s

Amortization of long lived assets -Straight line method.

Comprehensive problem on amortization: 1st January 2006, Maple Leaf Corporation reported the following property, plant, equipments. Assets Cost Estimated life Salvage value Accumulated amortization Land 4500000 N.A. Nil Building 6000000 40 years Nil 3300000 Equipment 2000000 10 years Nil 1250000 During 2006 followi

Management of a Firm

The factors that are listed below raise some interesting thoughts. If you were calling the shots for any organization where would you focus your attention? Management Attitudes: There is room for managerial judgment (i.e., tastes and preferences) in determining a firm's optimal capital structure. Where do you stand on this is

Question about functions of financial markets

What are the functions of the major financial markets? What is the difference between the primary and secondary markets? What is the difference between the capital markets and the money markets?

Corporate finance

Every company has capital projects. IBM must need something! Be it a new wing to the building, a new product line to be funded, a new piece of equipment, find one new acquisition your company needs. Identify a capital project for IBM and Once you have identified the new budgeted item, what problems are you going to have getti

Begining Finance - Financial Statements

See attached file for full problem description. Study Guide- ch 2 Practice 2-7 Income Statement Preparation Precision Corporation has been a leading supplier of magnetic storage disks for three years. Followingare the results of Precision's operations for 2006. Sales revenue . . . . . . . . . . . . $68,000 Advertising

Risk Averse Investment for a Banking System

Consider two individuals living in the country of Depressia. Depressian banking system is very unstable. On average, 5% of all banks collapse every year. Each of these individuals is considering depositing all their life savings - $10,000 - in a bank for one year. Banks pay fixed interest, so that by the end of the year all woul

Crime: Felony or Misdemeanor?

When one thinks of crime, it's usually with individuals in mind. However, companies commit crimes too. Review the articles below and respond to this question, citing the articles you reviewed: 1. Do the company's actions fit the definition of a crime? If so, what kind, a felony or a misdemeanor? Why or why not? Article

Government Revenues from Sales Taxes

9. Assuming that a government will collect its sales taxes in sufficient time to satisfy the available criterion, it would ordinarily recognize revenue from sales taxes in its governmental fund statements a. when the underlying sales transaction takes place b. on the date the merchant must remit the taxes to the gover

Grant Revenue

7. Central City was awarded two state grants during its fiscal year ending September 30, 2003: a $2 million block grant that can be used to cover any operating expenses incurred during fiscal 2004 and a $1 million grant that can be used any time to acquire equipment for its police department. For the year ending September 30, 20

Basic Finance Problems: Seth Cohen, General Materials and Standards Fixtures

9.2. One year ago, Mr. Seth Cohen invested $10,400 in 200 shares of First Industries, Inc. stock and just received a dividend of $600.00. Today, he sold the 200 shares as $54.25 per share. a. What was his capital gain? b. What was your total return? c. What was your total dollar return? d. What was the stock's dividend yi