fin homework 1,2,3,4
3 Pages

fin homework 1,2,3,4

Course Number: BUSINESS 101, Spring 2012

College/University: Strayer

Word Count: 707

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What consideration might be important in the selection of an investment banking firm? A member of your board has asked if you have considered competitive bids for the distribution of your securities compared with a negotiated contract with a particular firm. What factors are involved in this decision? Assuming that you have decided upon a negotiated contract what are the first questions that you would ask of the...

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consideration What might be important in the selection of an investment banking firm? A member of your board has asked if you have considered competitive bids for the distribution of your securities compared with a negotiated contract with a particular firm. What factors are involved in this decision? Assuming that you have decided upon a negotiated contract what are the first questions that you would ask of the firm chosen to represent you? As the investment banker what would be your first actions before offering advice? Assuming the investment banking firm is willing to distribute your securities describe the alternative plans that might be included in a contract with the banking firm. How does the investment banking firm establish a selling strategy? How might the investment banking firm protect itself against a drop in the price of the security during the selling process? What follow up services will be provided by the banking firm following a successful distribution of the securities? Three years later as an individual investor you decided to add to your own holding of the security but only at a price that you consider appropriate. What form of order might you place with your broker? In late 2010 you purchased the common stock of a company that has reported significant earnings increases in nearly every quarter since your purchase. The price of the stock increased from $12 a share at the time of the purchase to a current level of $45. Notwithstanding the success of the company competitors are gaining much strength. Further you analysis indicates that the stock may be over priced based on your projection of future earning growth. Your analysis however was the same one year ago and the earnings have continued to increase. Actions that you might take range from an outright sale of the stock to doing nothing and continuing to hold the shares. You Chapter 12 From the information below compute the average annual return, variance, standard deviation and coefficient of variation for each asset. Asset A B C D Annual returns 5% 10% 15% 4% -6% 20% 2% -5% 10% 12% 15% 17% 10% -10% 20% -15% 8% -7% Based upon your answers to question 1 which asset appears riskest based on standard deviation? Based on coefficient of variation? Recalling the definitions of risk premiums chapter from 8 and using the nominal risk free rate what is the risk premium from investing in each of the other asset classes listed in Tabel 12.4? What is the real or after inflation return from each of the asset classes listed in Table 12.4? Chapter 13 1. Use the balance sheet equation to determine owners equity if liabilities are $5 million and assets are $10 million. 2. Use your knowledge of balance sheets to fill in the missing amounts. Assets Cash $10,000 Account receivable 100,000 Inventory Total current assets 220,000 Gross plant and equipment 500,000 Less: accumulated depreciation Net plant and equipment 375,000 Total assets Liabilit 5. Use your knowledge of income statements to fill in the missing items: Sales Cost of goods sold Gross profit General and administrative expense Selling and marketing expense Depreciation Operating income Interest Income before taxes Income taxes(30%) Net income $575,000 1,600,000 200,000 50,000 100,000 $700,000 Chapter 14 2. The Robinson Company had a cost of goods sold of $1,000,000 in 2011 and $1,200,000 in 2012. A. Calculate the inventory turnover for each year. Comment on your findings. B. What would have been the amount of inventories in 2012 if the 2011 turnover ratio had been maintained? 3. The Dayco Manufacturing Company had the following financial statement result for last year. Net sales were $1.2 million with net income of $90,000. Total assets at year end amounted to $900,000 A Calculate Daycos asset turnover ratio and its profit margin B. Show how the two ratios in Part (a) can be used to determine Daycos rate of return on assets C. Dayco operates industry average ratios are these; Return on assets: 11 percent; Asset turnover; 2.5 times, net profit margin; 3.6 percent. Compare Daycos performance against the industry averages. 7. This problem uses the financial statements for the Genatron Manufacturing Corporation for the years 2012 and 2011 from Problem 6. A. calculate Genatrons dollar amount of net working capital in each year. B. calculate the current ratio and the acid test ratio in each year. C. calculate the average collection period and the inventory turnover ratio in each year. D. What changes in the management of Genatrons current assets seems to have occurred between the two years?
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