CH 10:
Q10-2
Q10-8
P10-2
P10-5 (assume the stock is selling for $60)
P10-7
P10-16 Modified (also solve the following part c: If you purchase the stock for $33, what is your expected rate of return?
Hint - use the "market's required yield" for preferred st
CH 9b:
P9-13 Modified (instead, assume the bonds pay interest semi-annually)
P9-15 Modified (assume 10% interest and the bonds pay interest semi-annually)
P9-17 Modified (assume interest payments are made semi-annually and current bond price is $
P9-21
(K
CH 11B:
Q11-7
P11-4
P11-12 (part a only)
P11-14
MC11 - Jamie McDermott
(Key: P=Study Problems, Q=Study Questions, MC=Mini Case at the end of the chapter)
)
Q 11-7
What are the limitations of the payback period as an investment decision criterion? What are
A)
Coupon Rate
7.75%
Years to maturity
18
current market price $ 880.00
par value
$ 1,000.00
i)
Annual Interest payment
Semi payment
Rate
YTM
ii)
Discount Rate
value
iii)
b.
i.
Par Value
$
50.00
Dividend Rate
6.0%
Price
$
33.00
Dividend
$
3.00
ERoR
9.09%
CH 14a:
Q14-1
Q14-2
P14-6 Modified (skip A, for C use 7% coupon rate with interest paid semiannually)
P14-10
P14-11
P14-17 Modified (assume dividends are expected to grow at an annual rate of 3.44%)
(Key: P=Study Problems, Q=Study Questions, MC=Mini Case
Inputs
Tax Rate
Req RRoR
Year
Cost of new P&E
Shipping and Installation
Year 3 Scheduled Overhaul
Initial WC
% of WC
0.34
0.15
5
$ (14,800,000.00)
$
(200,000.00)
$
(250,000.00)
$
(200,000.00)
0%
Year
Units sold
Sale price
V. Cost
F. Cost
0
1
$
$
$
Step 1
CH 13 & 15:
P13-8
P13-10
CH 13 - Degree of Operating Leverage (DOL) Problem - see template for instructions
Leverage Problem - see template for instructions
P13-8
Given:
Current Level of Operations
2,000 units
P (per Unit)
1,000
VC (per Unit)
600
FC:
Depr
CH 12A:
Q12-7
Q12-8
P12-2
P12-7
P12-8
P12-12
(Key: P=Study Problems, Q=Study Questions, MC=Mini Case at the end of the chapter)
nd of the chapter)
Q 12-7
Depreciation expense represents the allocation of the cost of a long-lived piece of equipment or a bu
$5,000
$3,000
$1,000
2007
2008
2009
2010
($1,000)
($3,000)
($5,000)
($7,000)
cash from operating activities
cash from investing activities
CH 3:
P3-3
P3-6 Modified: See template for changes
P3-13: parts A & B (consider taxes payable and notes payable as s
revenue
cost of revenue
gross profit
operating expenses
operating income or loss
interest expense
net income
cash & cash equivalents
accounts receivable
inventory
other current assets
total current assets
long-term investments
property, plant, & equipment
CH 5c (5.4):
P5-25 (assume the investment is $100)
P5-27 Modified (assume the loan interest rate is quarterly compounding)
P5-36 Modified (also include a choice of borrowing at 25% compounded semiannually)
P5-37 (assume 365 days in a year for the daily co
CH 6 (6.1 - 6.2):
P6-3
P6-5 Modified (assume that payments are made monthly (i.e. 300 monthly payment
P6-16
P6-21 Modified (assume a $2,083 purchase price rather than $3,000)
P6-42 (a & b only)
P6-44
Note: Use Excel to solve the problems
(Key: P=Study Pro
CH 5 (5.1 - 5.2):
Q5-1
Q5-4
P5-2
P5-3
P5-5
P5-8M (No graph is required)
Note: Use MS Excel to solve the problems (not a calculator).
Q5-1
What is the time value of money? Give three examples of how the time value of money might
the time vlaue of money sta
CH 6 (6.3):
P6-24
P6-53
P6-54
Note: I highly recommend that you use timelines to help you set-up the problems
(Key: P=Study Problems, Q=Study Questions, MC=Mini Case at the end of the c
et-up the problems before attempting to solve them in Excel
at the en
CH 9b:
P9-13 Modified (instead, assume the bonds pay interest semi-annually)
P9-15 Modified (assume 10% interest and the bonds pay interest semi-annually)
P9-17 Modified (assume interest payments are made semi-annually and current bond price is $
P9-21
(K
CH 5b (5.3):
Q5-2
P5-12 Modified (also solve for "n" assuming a rate of 12%)
P5-13 Modified (c and d only)
P5-18
P5-19
P5-23
Q 5-2: The process of discounting and compounding are related. Explain this relationship.
Both are used to adjust the value of mon
The face Value of a bond refers to the amount that must be
repaid to the bondholder once it matures. The yield to maturity
is the discount rate the equates the present value of the bond's
contractual or promised cash flows. It is also how much the
investo
CH 7 In Class Notes
Value of a stock is the present value of future dividends:
1 Discounted dividends
2 Abnormal earnings
3 Discounted cash flows
The goal of valuation is determining a stock price
Discounted Dividends Valuation: value of a stock to an ind
CH 3 Notes
Overview of Accounting Analysis
Performing accounting analysis allows the analyst to effectively use financial information
to:
Evaluate how well the accounting captures the business reality
Access the reliability of firms accounting numbers
Ide
CH8 Prospective Analysis Valuation Implementation
WACC
Weighted Average Cost of Capital discount rate which takes into account debt and equity
sources of financing (used to find PV of business value)
WACC = 0ebt financing * After tax cost of debt + %equit
1
Ethics : Spring 2016
Values/ethics and the problem of objectivity
External Relations: Who we are is not important:
-empirical objectivity: Are the lights on?
-rational (logical) objectivity: Does 2+2=4?
.Go Check
Internal Relations: Who we are is import
Economics 102, section 3
Point Loma Nazarene University
Room: RLC 103
Fall 2014, MW 1:30pm
Instructor: Peggy Crane
[email protected]
Date
Lecture Topic_(Note: This is only a tentative schedule.)_
Sep 3
Introduction: Log in to class website on Canvas
*
revenue
cost of revenue
gross profit
operating expenses
operating income or loss
interest expense
net income
cash & cash equivalents
accounts receivable
inventory
other current assets
total current assets
long-term investments
property, plant, & equipment
Q10-2 Why is preferred stock referred to as a hybrid security?
Preferred stock is also know as hybrid security
because it shares some of the same attributes
of both common stock and bonds. Preferred
stock has no maturity date and if you do not
pay your di
Q9-4 Describe the realtionship between yield to maturity and the value
of a bond.
A bond's market price depends on its YTM and
whether coupon rates are greater or less than the
YTM. For example, if the YTM is greater than the
coupon rate, the value of the
CH 11:
Q11-5
P11-1 Modified (Include the PI calculation for all 4 rates)
P11-2 Modified (also calculate the PI for each rate)
P11-12 Modified (Only do part c, but also compute the PI),
P11-22 Modified (complete parts a and b only).
P11-23 Modified (comple
P5-24M Approximately how many years would it take for an investment to grow fourfold if it w
16% compounded semiannually? (Assume the investment is $100)
PV
i
nper
FV
$100
8%
18.01
$400.00
Years
9.01
o grow fourfold if it were invested at
P5-26M You lend