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A mineral deposit is to be analysed

A mineral deposit is to be analysed for mining based upon the following information: (1) selling price of refined metal $0.75/kg: (2) average ore grade 0.5%: (3) recovery of metal 85%: (4) mining, milling, smelting and refining costs per tonne of ore are $6.50. Can the mine be considered profitable at this time?

WACCs

Please assist with the following question.

Historical Growth Rate of Earnings

Problem 9-11. Cost of Equity. Radon Homes' current EPS is $7.06. It was $4.68 five years ago. The company pays out 50% of its earnings as dividends, and the stock sells for $31. a. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. b. Calcul

A mineral deposit

A mineral deposit is to be analysed for mining based upon the following information: (1) selling price of refined metal $0.75/kg: (2) average ore grade 0.5%: (3) recovery of metal 85%: (4) mining, milling, smelting and refining costs per tonne of ore are $6.50. Can the mine be considered profitable at this time?

Stock price calculation

A share of common stock just paid a dividend of $1.00. If the expected long-run growth rate for this stock is 5.4% and if investors required rate of return is 11.4%, what is the stock price? a) $16.70 b) $17.13 c) $16.28 d) $18.01 e) $17.57

Financial Ratios

Discuss why one should use caution when using financial ratios for analyzing a healthcare organizationâ??s current financial position and future viability. Can you give an example for support?

An item of equipment is assessed.

An item of equipment is to be purchased for $ 250,000. The anticipated operating costs, maintenance costs and salvage values for each year are detailed in the table on File .Determine the economic life of the equipment. It may be assumed that the cost of capital is 10% , depreciation for tax purposes of capital expenditure is al

Zero coupon bond problem

You buy a zero coupon bond at the beginning of the year that has a face value of $1,000, a YTM 0f 7 percent, and 25 years to maturity. If you hold the bond for the entire year, how much in interest income will you have to declare on your tax return?

Mergers, LBO's, Divestitures and Business Failure

Please see the attachment. Connor Shoe Company is contemplating the acquisition of Salinas Boots, a firm that has shown large operating tax losses over the past few years. As a result of the acquisition, Connors believes that the total pretax profits of the merger will not change from their present level for 15 years. The tax

Value of company's ending inventory

A company has the following per unit original costs and replacement costs for its inventory: Part A: 50 units with a cost of $5, and replacement cost of $4.50 Part B: 75 units with a cost of $6, and replacement cost of $6.50 Part C: 160 units with a cost of $3, and replacement cost of $2.50 Under the lower of cost or market

Spot rate calculations: Calculate the 1.5-year and 2-year theoretical spot rates

Calculate the 1.5-year and 2-year theoretical spot rates if the 6-month spot rate is 1.75 percent and the 1-year spot rate is 1.95 percent. The 1.5-year note has a coupon of 3 percent and is selling for 101.3518. The 2-year note has a coupon of 4.5 percent and is selling for 104.5764. (Quotes are in decimals, not 32nds.) Base

Balance Sheet Analysis

I am a little lost here are my problems please show me how to calculate 1. In March 2005, General Electric (GE) had a book value of equity of $113 billion, 10.6 billion shares outstanding and a market price of $36 per share. GE also had a cash of $13 billion and total debt of $370 billion. Four years later in early 2009, GE

Value of the firm

Assuming no major change in operating ratios going forward, calculate the value of the firm using the following data (end of fiscal year): Sales $107,000,000 Net income $5,350,000 Interest expense (average) $1,050,000 Depreciation expense (average) $1,750,000 Current assets $35,000,000 Current liabiliti

About lower cost market

Steel Company, a wholesaler that has been in business for two years, purchases its inventories from various suppliers. During the two years, each purchase has been at a lower price than the previous purchase. Steel uses the lower of FIFO cost or market method to value inventories. The original cost of the inventories is above

3 short finance questions.

I've posted the problems here and in the attachment. Get back to me, thanks. 9-1 DPS CALCULATION Warr Corporation just paid a dividend of $1.50 a share (that is, D0 = $1.50). The dividend is expected to grow 7% a year for the next 3 years and then at 5% a year thereafter. What is the expected dividend per share for each of th

Preferred Stock Valuation and Required Rate of Return

Fee Founders has perpetual preferred stock outstanding that sells for $60. a share and pays a dividend of $5 at the end of each year. What is the required rate of return? Please tell me how I should enter this equation in my financial calculator.

Constant Growth Valuation

Thomas Brothers is expected to pay $0.50 a share (that is, D1 = $0.50). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, rs, is 15%. What is the stockâ??s current value per share? I have tried to solve this on my financial calculator but am not sure I am doing it

Financial options

United Hospital has received a leasing proposal from Leasing, Inc., for a Siemens cardiac catheterization unit. The terms are: â?¢ Five-year lease â?¢ Annual payments of $200,000 payable one year in advance â?¢ Payment of property tax estimated to be $23,000 annually â?¢ Renewal at end of year 5 at fair market val

Average return and risk help

Two stock abc and xyz have expected returns of 30% and 40% with standard deviation of 15% and 20% respectively. What will be average return and risk if 40% of ones. Funds are invested in ABC and 60% are invested in XYZ

Profit and Output

A corporation hires a company to determine the relationship between its profit and its output. The report back is that the relationship is: ? = 1/3Q^3-3Q^2+5Q+250 It states that profit is maximized when Q=1. The company believes that the relationship as stated above is correct, but they disagree with the results that pro

Finance

Profit margins and turn over ratios vary from one industry to another. What differences would you expect to find between a grocery chain such as a Safeway and steel company? Think particularly about the turnover ratios, the profit margin and Du Pont equation.

Floor Price of a Convertible Bond

Valdes Enterprises is considering issuing a 10-year convertible bond that would be priced at its $1,000 par value. The bonds would have an 8.00% annual coupon, and each bond could be converted into 20 shares of common stock. The required rate of return on an otherwise similar nonconvertible bond is 10.00%. The stock currently se

Effect on present value

Using the Discounted-Cash-Flow formula, what effect will increase the required rate of return on the Present Value? I think the PV will increase, but I'm confused with the formula. Can you help please? Using the Discounted-Cash-Flow formula, what effect will increase the required rate of return on the Present Value? a. I

Cash Conversion Cycle, Investments and Inventory: Zocco Co.

The Zocco Corporation has an inventory conversion period of 75 days, a receivables collection period of 38 days, and a payables deferral period of 30 days. a. What is the length of the firm's cash conversion cycle? b. If Zocco's annual sales are $3,421,875 and all sales are on credit, what is the firm's investment in accoun

Finding the Average Accounts Payable: APP Corporation

A chain of appliance stores, APP Corporation, purchases inventory with a net price of $500,000 each day. The company purchases the inventory under the credit terms of 2/15, net 40. APP always takes the discount, but takes the full 15 days to pay its bills. What is the average accounts payable for APP?

Option Call Price

FS, Inc. stock is selling for $28 a share. A 3-month call on FS stock with a strike price of $30 is priced at $1.50. Risk-free assets are currently returning 0.3% per month. What is the price of a 3-month put on GS stock with a strike price of $30?

Purchase accounting method

Johnson, Inc. has $4.2 million in net working capital. The firm has fixed assets with a book value of $48.6 million and a market value of $53.4 million. Vandy & Sons is buying Johnson, Inc. for $60 million in cash. The acquisition will be recorded using the purchase accounting method. What is the amount of goodwill that Vandy &

Balance Sheet for Mergers

Consider the follwing pre-merger information about firm x and firm y. Problem is attached in excel file. Balance Sheets for Mergers firm x firm y total earnings 40000 15000 shares outstanding 20000 20000 per share values: market 49 18 book 20 7 Assume that firm x acquires firm y by paying cash for all the shares outst

Calculating Flotation Costs

Southern Alliance Company needs to raise $30 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The company has a target capital structure of 60 percent common stack, 10 percent preferred stock, and 30 percent debt. Flotation cost