Corporate Finance Test 1 Review
Chapter 1
The controller's office handles cost and financial accounting, tax payments, and management
information systems. The treasurer's office is responsible for managing the firm's cash and credit,
its financial plannin
To get the historical average of the individual values we add up the yearly returns and divide by 80. Average
returns are nominal because we arent worried about inflation. Historical T-bills have had low real returns where as small
stock have had relativ
1. Quick Computing currently sells 17 million computer chips each year at a price of $28
per chip. It is about to introduce a new chip, and it forecasts annual sales of 22 million of
these improved chips at a price of $35 each. However, demand for the old
C hapter 7 Slides
The yield to maturi ty is the rate of return you will earn if you purchase a
bond today at the market price and hold the bond until it matures. This rate
assumes the bond issuer pays all interest and principal payments as
expected.
The y
Annual Salary
Growth Rate
Time
Tax Rate
FV Ending Salary
Lost Income Ritter
Lost Income Bradely
Net Income Ending Salary
Dewey and Louis
$50,000
3%
35 years
26%
$140,693
$104,545
$51,500
$104,113
MBA at Ritter
PostGrad Starting Salary
Signing Bonus
Growth
MBA Case
1. In terms of age there are many things Ben needs to take into consideration before making his
decision:
a. Scenario 1 (Staying with his current Job)
i. Is a promotion to Investment Banker possible?
ii. How long would it take Ben to receive such
To get the h istorical average of the individual values we add up the yearly returns and divide by
80. Average returns are nominal because we arent worried about inflation. Historical T-bills have had low
real retu rns where as small stock have had relat
Note here you may be asked to compute the Effective Annual Rate (EAR). The equation is EAR=
(1+r)^#compounding periods (ex. Semiannual= 2)-1.
Interest Rate Risk- All other things being equal, the longer the time to maturity, the greater the interest rate
B ryan W. Redd
Corporate F inance H MWRK I #5
Summer 2010
1. g= b x ROE
(d) Dividend payout ratio = 1.26/4.54(EPS0)= .27753304
(b) Retention rate= 1-.27753304=. 7224669604
(g) Growth rate = .7224669604 x .25(ROE) = .1806167401
(g) Growth rate = 18.06%
D 0
Note here you may be asked to compute the Effective Annual Rate (EAR). The equation is EAR=
(1+r)^#compounding periods (ex. Semiannual= 2)-1.
Interest Rate Risk- All other things being equal, the longer the time to maturity, the greater the interest rate
Bryan W. Redd
Corporate Finance Hw #2
Summer 2010
Bullock Gold Mining
1. Payback Period= 3.78
a. IRR=
19%
b. MIRR=
15%
c. NPV=
$115,109,801.56
2. The company should open the mine because the NPV for the project is positive. The IRR
and MIRR are both highe
Bryan W. Redd
Corporate Finance Hw #2
Summer 2010
Bullock Gold Mining
1. Payback Period= 3.78
a. IRR=
19%
b. MIRR=
15%
c. NPV=
$115,109,801.56
2. The company should open the mine because the NPV for the project is positive. The IRR
and MIRR are both highe
Corporate Finance Homework 2(4)
Cost of Capital for Hubbard Computer, Inc.
Problem #1.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
For the quarte
For the transi
Commission File Number: 0-17017
Dell Inc.
(Ex