See attached file for full problem description. On the last day of October, Brice Jones buys 200 shares of Olivia Corporation common stock selling 39.25 per share and is also considering the purchase of an Olivia option. Option Strike EXP Vol. Last vol. last Olivia 35 Dec 1,629 3.75 2,703 1.25 39.25 35 Mar 6,333 5
You decide to sell 240 shares of Topgun enterprises Inc short when it is selling at is yearly high of 64.60. your broker tells you that your margin requirement of 60 percent and that the commission on the sale is 5 percent of the total stock value. While you are short, Topgun pays a 2.20 per share dividend. At the end of one ye
A.Use options pricing model to calculate the theoretical value of a 12-month Call Option on the British Pound with a strike price of $1.65 per pound. b. Use same model to calculate the theoretical value of a 1-month Put Option on the Japanese Yen with a strike price of $0.74 per Yen 100. Note: use LIBOR interest rates
What are the best ways to choose stocks for purchase recommendation to investment clubs that have a "buy and hold" philosophy of investment?
Your stock broker suggests you concentrate your portfolio on stocks with low P/E ratios. She explains that these firms are likely to be out of favor with investors, because they have a low price relative to their current earnings. Is this necessarily a good investment practice? Why or why not?
20. The following information is related to the pension plan of King, Inc. for 2008. Actual return on plan assets $200,000 Amortization of unrecognized net gain 82,500 Amortization of unrecognized prior service cost 150,000 Expected return on plan assets 230,000 Interest on projected benefit obligation 362,500 Service cost
1. Profitability and solvency objectives in business are: a. secondary to the objective of growth b. complementary objectives c. of primary importance in most businesses. d. generally ignored by established businesses. 2. As a company's prospects change over time, the ratings of its outstanding bonds: a. would tend to de
9. (a) What are the reasons for the existence of monopoly? (b) Which of these did Alcoa use to establish and retain a monopoly? Problem 1 If the market demand and supply functions for pizza in Newtown were: QD = 12,000 - 1,000P QS = -4,000 + 1,000P Determine algebraically the equilibrium price and quantity of pizza.
9.8 Using the returns for the period 1981 to 1985 listed below, calculate the five-year holding period return on the S&P 500 index. 1981 1982 1983 1984 1985 S&P 500 index return(%) -4.97 21.67 22.57 6.19 31.85 10.2. Suppose you have invested only in tw
The buyer of a long call option... a) has a maximum loss equal to the premium paid. b) has a gain equal to but opposite in sign to the writer of the option. c) has an unlimited maximum gain potential. d) all of the above
What are the appropriate techniques for mitigating risks in business?
Three put options on a stock have the same expiration date and strike prices of $55, $60, and $65. The market prices are $3, $5, and $8, respectively. Explain how a butterfly spread can be created. Construct a table showing the profit form the strategy. For what range of stock prices would the butterfly spread lead to a loss?
?Website Look and Feel: Write a paper that describes how the "look and feel" differs for Continental Airlines website. Include an evaluation of the ease of navigation and overall impact and strategy of the website. Points to address for Continental Airlines: ?Look and feel of Website ?Ease of navigation ( difficulty
A deposit instrument offered by a bank guarantees that investors will receive a return: Describe the payoff and is it a good deal for an investor?
A deposit instrument offered by a bank guarantees that investors will receive a return during a 6-month period that is the greater of (a) zero and (b) 40% of the return provided by a market index. An investor is planning to put $100,000 in the instrument. Describe the payoff as an option on the index. Assuming that the ri
6.During 20X7, Moore Corp. had the following two classes of stock issued and outstanding for the entire year: * 100,000 shares of common stock, $1 par. * 1,000 shares of 4% preferred stock, $100 par, convertible share for share into common stock. Moore's 20X7 net income was $900,000, and its income tax rate for the year
To compute number of shares that should be used in computing basic earnings per share for Welsch, Inc. and Whalen, Inc.
At December 31, 20X0, Welsch, Inc., had 500,000 shares of common stock outstanding. On October 1, 20X1, an additional 120,000 shares of common stock were issued for cash. Welsch also had $4,000,000 of 8% convertible bonds outstanding at December 31, 20X1, which are convertible into 100,000 shares of common stock. No bonds we
A. Why is it important to keep paid-in capital separate from earned capital? B. As an investor, is paid-in or earned capital more important? Why? C. As an investor, are basic or diluted earnings per share more important? Why?
Stocks X and Y have the following historical returns: Year Stock X Stock Y 2000 18.0% 37.0% 2001 -5.0% 10.0% 2002 0.0% -37.0% 2003 32.0% 11.0% 2004 22.5% -7.0% 2005 -6.0% 36.0% 2006 11.0% 23.5% a) Calculate the average rate of return for each stock during the period. b) Assume that you had a portfolio consisti
Some people believe the best way to manage exchange rate exposure is to do nothing. They believe that currencies are unpredictable. They believe trying to manage currency risk is useless and a waste of money because of this unpredictability. Explain how exchange rate exposure may create risks and opportunities for a domestic
44. Rogers Company holds 80 percent of the common stock of Andrews, Inc., and 40 percent of this subsidiary's convertible bonds. The following consolidated financial statements are for 2004 and 2005: Rogers Company and Consolidated Subsidiary
This is an MBA level question for which I am seeking a detailed and complete response. Sue Wong, an investment advisor for National Securities, Inc., was preparing to meet with a client, Rick Thompson. Based on Wong's recommendation, Thompson had previously added an auto parts company, National Auto Inc., to his portfolio o
What factors impact the success of overseas relocations?
Suppose that you are the manager and sole owner of a highly leveraged company. All the debt will mature in 1 year. If at that time the value of the company is greater than the face value of the debt, you will pay off the debt. If he value of the company is less than the face value of the debt, you will declare bankruptcy and the
Which 2 companies would be good growth stocks companies?
Springsteen Music Company earned $820 million last year and paid out 20 percent of earnings in dividends.
4. Springsteen Music Company earned $820 million last year and paid out 20 percent of earnings in dividends. a. By how much did the company's retained earnings increase? b. With 100 million shares outstanding and a stock price of $50, what was the dividend yield? (Hint: First compute dividends per share.) 12. Laser Elec
So far, things have gone well with Dr. Washington. Before you wrap up your meetings with Dr. Washington and he begins investing, you decide to spend a little time sharing information with him about using derivatives to manage risk and enhance returns in his stock portfolio. You decide the best way to illustrate this is via a
The common shares are trading for $90 a share. You have employee stock options to purchase 1,000 shares for $85 per share. The options mature in three years. The annualized vitality of stock over the past 100 days has been 25 percent. The company's current dividend yield is 1.5 percent, and the interest rate is 6 percent. (Assum
Snyder Telecommunication Company is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate.
(See attached file for full problem description) I. Snyder Telecommunication Company is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate. D0 is currently $3.00, Ke is 10%, and g is 5%. Under Plan A, D0 would be immediately increased to $3.40 and Ke
Information concerning the capital structure of the Petrock Corporation is as follows: December 31, 2004 2005 Common stock 90,000 shares 90,000 shares Convertible preferred stock 10,000 shares 10,000 shares 8% convertible bonds $1,000,000 $1,000,000 During 2005 Petrock paid dividend
Please see the attached file for problem description.