Finance questions and answers in October 2018

River Cruises is all-equity financed with 40,000 shares. It now proposes to issue $150,000 of debt at an interest rate of 10% and to use the proceeds to repurchase 15,000 shares. Suppose that the corp...
XYZ Firm recently paid $1.00 as an annual dividend. Future dividends are projected at $2.00, $3.00, $4.00, and $5.00 over the next 4 years, respectively. Beginning 5 years from now, the dividend is ex...
Assume that the domestic volatility (standard deviation in yen) of the Japanese bond market is 8%. The volatility of the yen against the U.S. dollar is 6%. a. What would the dollar volatility of the J...
How much should Joe Smith pay for 300 shares of a stock which are expected to pay a total dividend of $792 next year and future dividends that grow at an annual rate of 3.2%, paid every year, if the a...
I have figured out most of the problem, but I cannot determine and ultimately need help with the optimal solution to produce for part A. If you could please help with this I would greatly appreciate f...
I have figured out most of the problem, but I cannot determine and ultimately need help with the two spots with the X. If you could please help with this I would greatly appreciate for my business ana...
****Please show all the steps clearly,thanks! Q1) Lend Lease Ltd is planning to issue 7-year bonds with semi-annual coupon payments. The market interest rate for such bonds is 8%. Coupon payments will...
Sheds R Us sells $800 sheds on a monthly payment plan over 3 years. a) If the interest rate is 3% per month, find the monthly payment. Answer = $ ____________? b) If instead the interest rate is 3.25%...
3. If you borrow $280,000 for 30 years at 6% interest with monthly payments, how much interest will you pay on the loan in the 4th year? How much will you still owe on the balance of the loan after 1...
Hello, Could you please walk me through the steps to this question? --- Orange Corp has 1 million shares outstanding, and the stock is currently trading at $10 per share. The company has two differen...
Consider two assets A and B for which return distributions can be summarized as follows                             r AB = 0 What is the risk of the minimum risk portfolio c...
NatNah, a builder of acoustic​ accessories, has no debt and an equity cost of capital of 17%. Suppose NatNah decides to increase its leverage to maintain a market​ debt-to-value ratio of 0.5. Supp...
Consider Gavin, a new freshman who has just received a Stafford student loan and started college. He plans to obtain the maximum loan from Stafford at the beginning of each year. Although Gavin does...
Number of share = 100,000 Price per share = $10 market value of shares = $1 million Calculate the ratio of price to expected earnings for River Cruises both before and after it borrows the $250,000. W...
1) i Answer the pic below a) Kartman has a total capital budget of  $540,000  to invest in properties. Which properties should it​ choose? b)  The profitability index for Parkside Acres is _____...
Assume an investor may invest his wealth in a single, risky asset A and the risk free asset F in any desired proportion. The return on F is rF = 10, the expected return on A is E[rA] = .20, and std (r...
Suppose you borrow $50000 when financing a coffee shop with a value of $65000. You expect to generate a cash flow of $65000 at the end of the year if demand is weak, $81250 if demand is as expected an...
1. Kramerica Industries has issued a $1000 par, 6.3% coupon bond that matures in 4 years. What is the current price of this bond if you require a 9% return for investing in this security?
Cash FlowYearProject A Project B0($200)($43)1$75$302$75$103$110$20WACC = 5.00%  Given the information in the table , what is the NPV for project A? Question 2 20 pts _...... w Given the information ...
123 question 1  (1 point)   The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.00 per share on its stock. The dividends are expected to grow at a constant rate of 2 percent per year inde...
11} [in a cuupnn band, the yield tu maturity A] always equals the cnupnn rate. E] ecluates the present value of all the bends payments tn its ptice tnday. C] increases when the market price cut the h...
21. The study cf the cngnitive pracesses and biases assnciated with making financial and ecnnnrnic decisinns. A. asset pricing model B. behavinral finance C. efficient market hypothesis D. stock mark...
2?] For a specific change in the yield to maturity Althe shmterthetimeuntilahnndmatm'es,the greaterw'illhethechangeinits price. E] the lungerthe time until a hand matures, the greater WfllhE' t...
1}Neminelintemtrateeerehigherthanreelintereetrateeeelungee A] expected inflatian is peeifive. E] the government taxes interest income. (3] inflatien is expected ta derJin-e in the future. D} lung-...
1.    Food Inc. just announced it is increasing its annual dividend to $2.50 next year and establishing a policy whereby the dividend will increase by 4.00 percent annually thereafter. Assuming th...
1.    Food Inc. just announced it is increasing its annual dividend to $2.50 next year and establishing a policy whereby the dividend will increase by 4.00 percent annually thereafter. Assuming th...
10-27. Aluminum Building Products Company (ABPC) is considering investing in either of the two mutually exclusive projects described as follows: Project 1. Buying a new set of roll-forming tools for i...
Over lunch, you and Mary meet to discuss next steps with the expansion project. "Do we have everything we need on sales and costs?" you ask. "It must be time to compute the net present value (NPV) and...
Finding cost of capital of common stock. The attachment with math is given below:
If I have a $1 investment and relevant data on the market return data for 30 days, what is the best approach to calculate the growth of this $1 investment in the market? Thank you so much!
1.    Food Inc. just announced it is increasing its annual dividend to $2.50 next year and establishing a policy whereby the dividend will increase by 4.00 percent annually thereafter. Assuming th...
XYZ Firm recently paid $1.00 as an annual dividend. Future dividends are projected at $2.00, $3.00, $4.00, and $5.00 over the next 4 years, respectively. Beginning 5 years from now, the dividend is ex...
ABC Company announced today that it will begin paying annual dividends next year. The first dividend will be $0.10 a share. The following dividends will be $0.20, $0.40, $0.60, and $0.80 a share annua...
Grameenphone limited's stock is selling for $52 .Its last dividend was $4.50 and the firm is expected to grow at 7% indefinitely. Flotation costs associated with the sale of common stock are 10% of th...
Calculate the after tax cost of preferred stock for Eastern housing Ltd which is planning to sell $10 million of 8 cumulative preferred stock to the public at a price of $50 share.Issuance costs are e...
Index 1: High Beta Strategy. It is to be long-only and invest in all 44 stocks, such that the weight of each stock in the index is beta-weighted. That is, wi = βi/∑jβj  Construct a smart beta ind...
Complete 6111528395 in P4-8B Gina Balistrieri opened Genie Cleaners on March 1, 2012. During March, the mounting Cycle- following transactions were completed. (50 l" 5' B" l" B)" "I Mar. 1 ...
What are some key intellectual property protections that ford has, if any? When do any of these protections expire? How does Ford intend to make up lost revenues due to any patent or other intellectua...
43. Portfolio Weights You have $45,115.11 to invest. You want to purchase shares of Company Air at $113.25, Company B at $15.1fl, and Company F at $9.115. How many shares of each company should you ...
In this problem , what figures do I use to calculate dividends received? The Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before (1) interest charg...
A payday loan is a small, unsecured, short-term loan ranging from $100 to $1,000 (depending on the state). Borrowers simply write personal post-dated check for the amount they want to borrow. A flat f...
Find by research and list some initial public offerings (IPOs) in the last 6 months .
I need help figuring out how to answer questions 5-7. The PIE Ratio and the SSP 500 The Dividend Discount Model (DDM) can be used to think about an entire market index such as the S&P 500 in the s...
Can someone differentiate between open-end and closed-end mutual funds. Now if someone bought a mutual fund that had a beginning NAV of $10 per share. It paid dividends of $0.50 and distributed capita...
Hello I need helping with my homework Question is You are Required to: Critically develop your views and assessment of the below quote by Stiglitz drawing on material covered in the lectures. "Today, ...
Based on these ratios, would you recommend a buy, hold or sell strategy for shares in Company X? Please include relevant analysis of the ratios and reasons for your recommendation. Liquidity   Curren...
ii) You have been offered a unique investment opportunity. If you invest $8,900 ​today, you will receive $ 445 one year from​ now, $1,335 two years from​ now, and $8,900 ten years from now. a....
1) i. Kartman Corporation is evaluating four different real estate investments. Management plans to buy the properties today and sell them three years from today. The annual discount rate for these in...
You are a marketing executive at a Boston based Marketing corporation. A client has come to you and said they would like to take on a marketing project if it will EFFECTIVELY earn them 10.00% per year...
1 i. You are upgrading to better production equipment for your​ firm's only product. The new equipment will allow you to make more of your product in the same amount of time.​ Thus, you forecast...
I need to know what the payback period would be for this equipment. EXPENSES Advertising Wages COGS Rant Depreciation Total Cash Flow Profit Tax {12%} Net Profit Gash FIDW 1,500 10,000 15,000 30,000 ...
1) i. You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $ 220 for the phone and then monthly charges of $ 5 for 24 months. Carrier B wants you to pay $ 9 0 for ...
Question is how to proceed with regards to debt to furnish this year's operations.  Current interest rates for a company with a credit rating C- 12.7%. The potential for our company to result in an a...
My company sells a new style of testosterone boosters for guys that enjoy working out. They are high quality, reasonably affordable and highly effective. All bottles of testosterone boosters would sel...
Need help, completely lost. Biggest challenege is placing into excel, so please dummy down :) I a P9—1 7 Calculation of individual costs and WACC Dillon Labs has asked its financial man- ager to mea...
Determine the return on the stock market over your school term based on the percentage change in the SEIP 50:] index level over the term. Annualiae this return by multiplying the return by 12fm, wher...
a. What is the difference bemeen the yields on high-yield corporate bonds at the end of the school term 1Irersus the yield on high-quality corporate bonds at the beginning of the school term? Apply t...
a. 1What is the difference between the yield on 90-day commercial paper and the yield on 13-week T- hills at the end of the school term? Apply the concepts discussed in Chapter 6 to explain why this ...
1 i) Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be $ 5.23 million per year. Your upfr...
Consider a 30-year corporate bond paying 9 percent semi-annual coupon. The current yield to maturity is 11 percent. a. Find the modified duration. b. Refer to part a. If the interest increases by 10 b...
Create a unique hypothetical weighted average cost of capital (WACC) and rate of return. The debt is 8%, tax rate is 40%, CAPM is 15%, ws is 60 % equity/40% debt. 
l A hank cuEmmer takes out a CD fi'em his principal hank far 13!] days in the emeunt at $2,310 and eame $99 in interest fur the IEIIIII—flEq.r periud. "'het i5 the depesimr's APT? Use the c...
. What is the Effective annual rate an luau wifl'l an APR Df 14 percent and flail}.r payments? {3 paints}
9'] Engines, "Inc. dedares a 4—fer— 13 stock split. The stock currently sells for $3 a share. A shareholder who owned ill-DD shares of shade Prior to file split will now lawn A} 251] slures...
Listed below are the characteristic lines and correlation's (correlation of each fund with the market) for three mutual funds: R 1 =-0.5 + 1.25R m                    p=0.8 R 2 =1.25...
You are the manager of an organization in America that distributes blood to hospitals in all 50 states and the District of Columbia. A recent report indicates that nearly 50 Americans contract HIV eac...
  Use the accompanying graph to answer these questions. (L02, L03, L04) a. Suppose demand is D and supply is SJ. If a price ceiling of $6 is imposed, what are the resulting shortage and full econom...
od Inc. just announced it is increasing its annual dividend to $2.50 next year and establishing a policy whereby the dividend will increase by 4.00 percent annually thereafter. Assuming the required r...
QUESTION TWO ( TRUE False 1 TRUE FALSE QUESTIONS 1-from the standpoint of the individual ,insurance is a system in wich a small certain cost is substituted for a large uncertain loss 2- Insurance can...
There is no answer for this question. 3- Snppnse ynn mat-m mnnthly mnrtgage payments at $2,545 and have 12 yeats left an the mflgage {nest payment due nest msnflt}. Assuming a 5.5% stated annual int...
what is the definition of Net Present Value with an example
You are evaluating a project that requires an investment of $90 today and provides a single cash flow of $115 for sure one year from now. You decide to use 100% debt financing, that is, you will borro...
 The X-Corporation produces a good (called X) that is a normal good. Its competitor, connect Y-Corp., makes a substitute good that it markets under the name Y. Good Y is an inferior good. (LOJ) a. H...
You are evaluating a project that requires an investment of $90 today and provides a single cash flow of $115 for sure one year from now. You decide to use 100% debt financing, that is, you will borro...
Should a project be accepted if it offers an annual after-tax cash flow of $2 million indefinitely, costs $10 million, is riskier than the firm's average projects, and the firm uses a 20% cost of capi...
A company is considering the following investment opportunities. If the company can raise large amounts of money at an annual cost of 10% and if the investments are independent of one another, which s...
-The 10th transplant__hrs -The first 10 transplants_hrs -The cost of all 10 surgery to Beth Zion Hospital _ Beth Zion Hospital has received initial certification from the state of California to becom...
What is the time required for 4th unit __ What is Cost of the 4th unit __ What is Time required for the fifth unit __ What is Time required for the 6th unit __ Suad Alwan, the purchasing agent for Dub...
A project costs $3,800 and has annual cash flows of $1,085, $1,192, $1,268, and $1,525 in years 1 to 4. The firm has a discount rate of 7%. What is the payback on this project?) What is the discounted...
Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows:    Year Cash Flow 0 -$35,500,000 1 52,500,000 2 -10,500,000    a.  If the company requires a ret...
Project Alpha has an IRR of 12 percent and Project Beta has an IRR of 14 percent. The cost of capital is 8 percent. The projects are mutually exclusive. What should the firm choose? Please choose the ...
A firm has a project with the following cash flows: What is the internal rate of return on the project? Suppose, the discount rate is 8 percent, should the project be adopted?
Project costs $3,800 and has annual cash flows of $1,085, $1,192, $1,268, and $1,525 in years 1 to 4. The firm has a discount rate of 7%: A project costs $3,800 and has annual cash flows of $1,085, $...
I don't understand this question about diversification The idea behind diversification is that if you spread your investment dollars around to various investments, if one goes down, the others will pr...
At a cost of capital of 7%, which project should the company choose? the information is attached, consider two mutually exclusive projects with the following cash flows: Consider two mutually exclusiv...
A businessman wants to buy a truck. The dealer offers to sell the truck for either (i) $130,000 now, or (ii) five yearly payments of $35,000 at the end of each year. If the businessman does not have e...
You are given a budget of $1,800,000 to invest in projects. Which projects will you select and in what order?      Consider the following list of projects: Note: NPV stands for Net Present Value,...
13- An automobile that could be totaled in a collision is an example of which of the following types of risk? I -Speculative risk || —Fundamental risk a) lonly blllonly c) bothl and H d) neitherl n...
Maggie is thinking of taking a project which will produce cash inflows of $900 a year for 4 years. The project has a 10% required rate of return and an initial cost of $2,800. What is the discounted p...
Managers at RTHK are thinking of replacing its old fully depreciated sound mixer. This sound mixer has zero after-tax cash flows associated with it. Two new models are available. Mixer X has a cost o...
CPC Corp has just paid a dividend of $2. These dividends are expected to grow at a rate of 24 percent for the next three years. Beginning in year four, the growth rate is expected to drop to 7 percen...
A) The 25th exam takes ____ minutes? B) To grade the first 10 exams ____ minutes? If Professor Laurie Macdonald takes 15 minutes to grade the first exam and follows an 85% learning curve then, using ...
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 4 of 4 Question 3 (40 marks) Debt-free, Inc., an unlevered firm, is planning to use debt in its capital structure. The firm currently has 5,000 shar...
A) Standard time for this process is ___ B) How many observations are necessary for 99% confidence, within +-5% accuracy ______ The Dubuque Cement Company packs 80-pound bags of concrete mix. Time-stu...
A loan is amortized over 9 years, with monthly payments at a nominal rate of 8% compounded monthly. The first payment is $1000, paid one month from the date of the loan. Each succeeding monthly paymen...
    A stock is expected to pay a dividend of $3.00 at the end of the year (D1 = 3.0). The required rate of return is rs = 8%, and the expected constant growth rate is g = 3.0%. What is the stock...
Calculate and submit the required financial ratios related to At&t you selected in Week 1; this will be based on the past three years of your firm's balance sheets and income statements.
Here is the problem I am needing to figure out. It is asking for two answers. A) The normal time for the completed operation? B) What is the Standard Time for the completed operation? Peter Rourke, a ...
Question 2 (40 marks) T. Holdings, an Asia-Pacific telecommunications company, has excess capital and is looking to make a regional telecommunications investment. S. Corp won the contract to advise T....
ROLY Inc is considering a major expansion (capital expenditure) next year. Next year, the company expects to pay a $3 million cash dividend, sell $7 million of common shares and report net income of ...
The default risk ratio (defined as cash flow from operations divided by the combined annual principal payments on all outstanding loans; a company's cash flow from operations equal to net profit plus ...
This is a homework question. This is just a homework question. Question is how to proceed with regards to debt to furnish this year's operations.  Current interest rates for a company with a credit r...
Low Carb Diet Supplement, Inc., has two divisions. Division A has a profit of $306,000 on sales of $2,410,000. Division B is only able to make $28,700 on sales of $354,000. (a) Compute the profit marg...
VINCENT, Inc. had $1,500,000 in owner's equity at the beginning of 2017. At the beginning of 2017, VINCENT, Inc. had 100,000 outstanding shares of stock. During the year, VINCENT sold 10,000 addition...
Define International Fisher Effect (IFE) and explain the fact of how it occurs. Is there any deviation from it?
A firm's balance sheet discloses cash of $300,000, other assets of $700,000, liabilities of $500,000, preferred stock of $100,000, common stock of $200,000, and retained earnings of $200,000. What is ...
Cost-Cutting Proposals Massey Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $450,000 is estimated to result in $150,000 in annu...
E. 'i'our grandmother recently surprised you; and gaye you Slflyflflfl expressly for the purpose of startlng your retlrement sayings. Her only stipulatlon is that you haye to Inyest the money n...
I need answers please ASAP 31- In reviewing his company's operations ,a risk manager noticed that all of the company's finished goods were housed in a single warehouse . The risk manager feared t...
1 Your boss leaves vou a note, asking 1you to determine the present value of a $125,000 payment to he made in six vears assuming a discount rate of 15%. However, vou misread her handwriting; and mist...
5. What is the present 1lralue of a SEJEUU perpetuity under each of the following growth assumptions? Assume your discount rate Is 13%. a] No growth b} 2.5% growth c] 5.0% growth
4. 'i'ou are considering buving a painting bv a local artist for $1,233. You believe that this artist is just about to he discovered, and thlnlt that six 1.rears from now the painting will be worth...
E. A financial adviser is trying to convince you to purchase a 15 year, $2fl,DDD per year annuitv. Using a 6% discount rate, vvhat Is the present value of this annuity if It Is an ardlnarv annuitv? ...
1.. TDLI "I'D" a rame WI'IIIE 'fDLl 'll'il'EfE DEW" [FIE SHINE WIU'I TTIEHES. l'Dl' 'lll'DlJf |I.|fl1E_I WU can CHEESE among the following three alternatives. If you pelleye that an 35...
Exactly three years ago, you purchased a $1,000 face value bond for $1,211.16. The coupon rate was 6.5 percent with interest paid semiannually. Today, you sold that bond for $1,089.54. What was your r...
1) What was the effect of the promotion on sales? Was that effect the $9,197 average increase in  sales estimated by Daniel E., the CMO? 2) Based on your analysis of the data, should the company im...
Determine the pre-money evaluation of a company if $50,000 is accepted for 20% of the company. pre-money eval = post-money eval - investment = 
I need Answers plz ASAP, tomorrow my midterm TRUE FALSE QUESTIONS 1- R13 retention deserves serious consideration when the maximum loss potential is small The most important consideration in determini...
Bonds exist with a total face value of $30m, a coupon of 8% pa paid semi-annually and 5 years to maturity. Their current market yield is 10% pa compounded semi-annually.Calculate the market value.
Please help calculate Blaine's kitchenware repurchase proposal, (part of the case analysis but classmates don't get similar answer)  Blaine will use $209 million of cash from its balance sheet and...
DLW Corporation acquired and placed in service the following assets during the year: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) TABLE 2a MACBS Mid-Quarter Convention: For prope...
Chaz Corporation has taxable income in 2014 of $396,000 TABLE 2a MACBS Mid-Quarter Convention: For property pieced in service during the first quarter Dapredaflmflatelorflacoverym 'i'iaar 5-year...
On April 17 of year 1 Javier purchased a building, including the land it was on, to assemble his new equipment. 
Woolard Inc. has taxable income in 2014 of $150,000 before any depreciation deductions (§179, bonus, or MACRS) and acquired the following assets during the year: TABLE 2a MACBS Mid-Quarter Convention...
Why would you expect securitization to take place only in highly developed capital markets?  What would you expect to be the relationship between securitization and the role of financial intermediar...
Wall Street firms have traditionally compensated their traders with a share of the trading profits that they generated. How might this practice have affected traders' willingness to assume risk? What ...
Oversight by large institutional investors or creditors is one mechanism to reduce agency problems. Why don't individual investors in the firm have the same incentive to keep an eye on management?
Discuss the advantages and disadvantages of the following forms of managerial compensation in terms of mitigating agency problems, that is, potential conflicts of interest between managers and shareho...
Why do financial assets show up as a component of household wealth, but not of national wealth? Why do financial assets still matter for the material well-being of an economy?
What reforms to the financial system might reduce its exposure to systemic risk?
Letticia​ Garcia, an aggressive bond​ investor, is currently thinking about investing in a foreign​ (non-dollar-denominated) government bond. In​ particular, she's looking at a Swiss gover...
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners. For each of the follo...
Suppose that in a wave of pessimism, housing prices fall by 10% across the entire economy. a. Has the stock of real assets of the economy changed? b. Are individuals less wealthy? c. Can you reconcile...
An investor is analyzing the risk of a possible investment based onthree differentscenarios. Under a pessimistic scenario, the property would produce a BTIRRpof 6%; a most-likely scenario produces a ...
This question is about P/E & EPS ratios which I don't understand.  1.    The stocks of some companies are purchased because of the company's profitability. As this is written, in the fashion ...
I need help with this practice midterm question. I don't understand d)
I need help with this practice midterm question please. I don't understand questions a) and b)
On the day Zola turned 30 years old, she decided to make regular annual deposits into a bank with a plan to save at least $200,000 by the time she was 40.
On the day Zola turned 30 years old, she decided to make regular annual deposits into a bank with a plan to save at least $200,000 by the time she was 40.
If the nominal interest rate is 10% and the inflation rate is 6%. What is the real interest rate? 
Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Component  Balance Sheet Value   Market Value   Cost of Capital  TAX Debt              ?...
Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. ComponentBalance Sheet ValueMarket ValueCost of Capital Debt5,000,000.006,850,000.008%Preferred Stock4,000,0...
Assume that the economy has three types of people. 20% are fad followers, 70% are passive investors, and 10% are informed traders. The portfolio consisting of all informed traders has a beta of 1.2 ...
Various trading strategies appear to offer non-zero alphas when we examine real world data. If indeed these alphas are positive, it could be explained by any of the following except: a) Investors are...
John Galt is a mutual fund manager at Atlas Asset Management. He can generate an alpha of 2% a year up to $500 million of invested capital. After that amount his skills are spread too thin, so he ca...
Which of the following is not considered a difficulty with regards to the CAPM? a) Investors risk preferences are not observed. b) Expected returns are not observed. c) Betas are not observed. d) The ...
One factor that can affect the market risk of a project is its degree of operating leverage, which is: a) the relative proportion of fixed versus variable costs. b) the relative proportion of operatin...
RON Ltd has the following capital structure components: Five million shares issued with a current market price of 7. Equity holders require a 9% return. $10 million face value of Corporate bonds outst...
Consider the following information regarding corporate bonds: Your estimate of the asset beta for Wyatt Oil is closest to: a) 0.66 b) 0.71 c) 0.59 d) 0.42
Consider the following information regarding corporate bonds: Wyatt Oil has a bond issue outstanding with seven years to maturity, a yield to maturity of 7.0%, and a BBB rating. The bondholders expect...
Consider the following linear regression model: The e i  in the regression... a) measures the historical performance of the security relative to the expected return predicted by the SML. b) measures ...
Suppose all possible investment opportunities in the world are limited to the four stocks list in the table below: Suppose that you have invested $30,000 invested in the market portfolio. Then the nu...
Hello, I am looking for some help with my finance homework. There are a few financial ratios that I need to calculate based off a company's financial documents (Balance sheet etc.). The ratios that I ...
Target experienced a major credit/debit card breach in November and December, 2013, which  put 40 million shoppers at risk for credit and debit card fraud.  Explain how this security breach  impact...
Use Bloomberg to estimate the prices and the Greeks of the following stock index options Note that these are FTSE-100 Index Options and the value of the index today is assumed to be 5,400. The options...
Chittenden is considering the acquisition of another firm in its industry. The acquisition is expected to increase Chittenden's free cash flow by $5 million the first year and this contribution is exp...
Two securities, L and M, are perfectly negatively correlated. L's standard deviation is 0.6 and M's is 0.8. Find the portfolio of L and M that will result in the lowest possible standard deviation. Wh...
Which theory of term structure argues that individual investors have specific maturity preferences.
The current spot FX rate of USD/EUR is S ($/€)=1.25, u= 1.05, d= 0.95. Consider a European call with T =0.5 years, K =1.20. The annual risk-free interest rate in the US is r = 2%. What is the price ...
"We R Toys" (WRT) is considering expanding into new geographic markets. The expansion will have the same business risk as WRT's existing assets. The expansion will require an initial investment of $50...
Hi, please help me answer Question 2 including detailed step-by-step working and necessary formula for each part. Thank you! : The project under consideration entails an ititial infrastructural invfi...
Investing in Mutual Funds Using Yahoo! Finance Website (finance.yahoo.com Go to finance.yahoo.com Fill in the ticker symbol in the field (top left of the webpage) and get quotes for the following thr...
The YTM on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually sell the bond before it matures, your realized return is known as the  holding perio...
Bond P is a premium bond with a coupon rate of 8 percent. Bond D has a coupon rate of 3 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 5 percent, and ha...
1. You are comparing stock A to stock B. Given the following information, what is the difference in the expected returns of these two securities? A. -0.85 percent B. 2.70 percent C. 3.05 percent D. 13...
"We R Toys" (WRT) is considering expanding into new geographic markets. The expansion will have the same business risk as WRT's existing assets. The expansion will require an initial investment of $50...
Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 10 percent, has a YTM of 8 percent, and has 14 years to maturity. Bond Y is a discount bond making semiannual payme...
Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has six years to maturity, whereas Bond Dave has 15 years to maturity.   If interes...
Foxglove Corp . is faced with an investment project . The following information is associated with this project : Allowable Depreciation Year Net Income* for each year 1 $ 50,000 0.33 2 60,000 0.45 3
Bond J has a coupon rate of 3 percent and Bond K has a coupon rate of 9 percent. Both bonds have 17 years to maturity, make semiannual payments, and have a YTM of 6 percent.   If interest rates sudde...
Hawar International is a shipping firm with a current share price of $5.50 and 10 million shares outstanding. Suppose Hawar announces plans to lower its corporate taxes by borrowing $20 million and re...
2. If you borrow $280,000 for 15 years at 5.5% interest with monthly payments, how much interest will you pay on the loan during the first 5 years? How much will you still owe on the balance of the l...
What is the net present value of a project that has an initial cash outflow of $ 36,300 and cash inflows of $ 11,500 , $ 21,700 , $ 0 , and $ 10,400 in Years 1 through 4 , respectively ? The required
George and Martha have $6000 in a checking account that pays no interest. They want to buy their first car right now, and at the same time save monthly toward a house. The plan is to drive the car for...
Simon Software Co . is trying to estimate its optimal capital structure . Right now , Simon has a capital structure that consists of 20 percent debt and 80 percent equity , based on market values . It
You are evaluating a software package that will streamline the collection of your accounts receivable. The software will cost $3 million, and you plan to depreciate this cost over a 3-year, straight-l...
You estimate that the free cash flows of a firm will be $5million, $8million, $12million and $14million over the next four years. You estimate (properly) that the cash flows will grow at 5% thereafter...
You know that the target D/E ratio for your firm is 0.80, and the tax rate is 40%. Further, the risk free rate is 4.00%, and the expected return on the market is 11.00%. What is the estimated cost of ...
You know that the target D/E ratio for your firm is 0.80, and the tax rate is 40%. Further, the risk free rate is 4.00%, and the expected return on the market is 11.00%. What is the estimated cost of ...
You want to estimate the cost of a firm's hybrid security. The security was issued three years ago at $50/security. The price is currently $54/security. It pays a semiannual dividend of $2.50/security...
(a)   Using the following information calculate the after tax Weighted Average Cost of Capital. ·     There are 10 million ordinary shares . The shares last traded at $10.00 each and just rec...
Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years ago. Some of that older equipment will become unnecessary when the company goes into production of it...
From the scenario, make a unique hypothetical weighted average cost of capital (WACC) and rate of return. Recommend whether or not the company should expand, and defend your position.
A company issue bonds with a face value of $10,000, paying interest at j 2  = 8.75%, redeemable in exactly 10 years. An investor purchases the bond for $10,233.67. Calculate the cost of debt (j 2 )
A company pay current dividends of $0.87 per share with these dividends expected to grow at a rate of 4% per year in perpetuity. Its shares are currently trading at $6.73 per share. What is the cost o...
A company's cash position (measured in millions of dollars) follows a generalized Wiener process falling on average $0.2m per quarter with volatility of $1.3m per quarter. How high must the initial ca...
A speculator is considering the purchase of 100 three-month Japanese yen call option. Each option has a strike price of $0.96 per 100 yen, and the option price is $0.014 per 100 yen. The spot exchange...
A) How many minutes of mixing machine time would be required to satisfy demand for all three products? B) How many units of each product should be produced to maximize net operating income? (Round int...
Create report and decide which alternative the company should choose. Part 043 is used in one of Scheetz Corporation's products. The company's Accounting Department reports the following costs of pr...
How much overhead cost would be assigned to each of the two products using the company's activity-based costing system? (Do not round your intermediate calculations. Round your final answer to two dec...
Question 1: We have two stocks, A and B, with CAPM betas of 0.4 and 1.2. These stocks' expected returns are 3% and 7%. (a) You want to hold a portfolio with a beta of one. What fraction of your portfo...
11) Marshall-Miller & Company is considering the purchase of a new machine for $50,000, installed. The machine has a tax life of 5 years, and it can be depreciated according to the depreciation r...
Stock market Returns What kind of returns might you expect in the stock market? One way to measure how the stock market has performed is to examine the rate of return of the S&P 500 Index. To see ...
11) Ross-Jordan Financial has suffered losses in recent years, and its stock currently sells for only $0.60 per share. Management wants to use a reverse split to get the price up to a more "reasonabl...
Using the data for TXN on the OneDrive (link at bottom) compute the average growth rate of FCF (whoe firm) using Excel's LINEST function. Express your answer in decimal notation (i.e., use 0.0123 fo...
Using the data for TXN on the OneDrive (hyperlink below!) compute the average growth rate of FCF (whoe firm) using Excel's LINEST function. Express your answer in decimal notation (i.e., use 0.0123 ...
Please show how Excel can be used for the following question Oppenheimer Bank is offering a 30-year mortgage with an EAR of 5.500%. If you plan to borrow $325,000, what will your monthly payment be? Y...
You have observed the following returns: 17 percent, −15 percent, 8.2 percent, 5.7 percent, and −12 percent. Calculate the variance and standard deviation of returns
Problem #5. Spartan Corp. is a firm with no cash on hand but lots of great ideas. The firm currently has 100,000 shares outstanding. All of these shares are held by the firm's founders, executives, a...