Problem 11-22 WACC Weights (LG11-4)
-2-2
WhackAmOle has 4 million shares of common stock outstanding, 3.0 million shares of preferred stock outstanding,
and 95,000 bonds. Assume the common shares are
Problem 12-12 Project Cash Flows (LG12-3)
-2-2
You are considering adding a new software title to those published by your highly successful software company. If
you add the new product, it will use ca
Ch. 13
Problem 13-25 IRR (LG13-4)
-2-2
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of
return on projects of this risk class is 10 pe
Chapter 10
Problem 10-16 Required Return (LG10-7)
-2-2
Suppose Universal Forests current stock price is $63.00 and it is likely to pay a $0.67 dividend next year. Since
analysts estimate Universal For
Problem 8-30 Constant Growth Stock Valuation (LG8-5)
-2-2
Campbell Soup Co. (CPB) paid a $0.812 dividend per share in 2003, which grew to $1.03 in 2006. This growth is
expected to continue.
What is th
CH 6
Problem 6-5 Unbiased Expectations Theory (LG6-5)
-2-2
Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following
three years (i.e., years 2, 3, an
Ch. 9 Study Guide
Problem 9-1 Investment Return (LG9-1)
-2-2
FedEx Corp. stock ended the previous year at $124.99 per share. It paid a $1.90 per share dividend last year. It
ended last year at $128.29
Ch. 7
Problem 7-9 Bond Quotes (LG7-3)
-2-2
Consider the following three bond quotes: A Treasury note quoted at 96:30, a corporate bond quoted at 102.80, and
a municipal bond quoted at 101.45. If the T
Show a separate graph of the constraint lines and the solutions that satisfy each of the following constraints:
(1) 3A +2B 18
(2) 12A+8B480
(3) 5A+10B =200
(1) When B = 0, A = 6 and when A = 0, B = 9
Given:
Unit Value
Labor costs
Overhead
Old Process
Material cost
Workers
Output
New Process
Material cost
Workers
Output
Find:
Increase in productivity associated with the process improvement
Solution
FroYoToGo
Six-Month Financial Projection
April
Revenue
Cost of Goods Sold
Gross Margin
Expenses
Bonus
Commission
Kiosk Rental
Marketing
Equipment Repair and Maintenance
Total Expenses
Operating Income
Loan
Annual Rate
Periods per Year
Period Rate
Never:
60000
0.09326
4
0.023315
0.023315
Total Revenue
Total Expenses
Net Income
Effective Rate
0.082090052
35000
22310
12690
Cash Flows
-4000
200
400
300
finance
Add
What is Excel?
Columns
Rows
Cells
Range of cells
Worksheet
Sheet Tab
Workbook
Ctrl + Page Up &
Ctrl + Page Down
Ribbons
QAT
Scroll Bars
Formula & Functions
Formula Bar
Name Box
3
7
8
0.05
Given:
N
29 years
r
12.803% compounded
PV
($8,054)
PMT
0
FV
?
Find:
FV
?
Solution:
FV
$311,331.19
4 times per year
Fiona plans to invest $8054 later today. To what amount will her investment grow to i
Given
PV
r
n
Find
FV
Solution
FV
($700)
4%
4 years
$818.90
Given
PV
r
n
Find
FV
Solution
FV
($2,500)
6%
15 years
$ 5,991.40
Given:
PV
n
r
Find:
FV
FV
FV
Solution:
Annually
Quarterly
Monthly
($500)
20
Given:
Daily Credit Sales
DSO (average collection period)
$50,000 per day
30
Find:
a. Average Accounts Receivable
b. r
?
?
Solution:
a. Average Accounts Receivable
b. r
new receivables acct. balance
a
Given:
r RF
RPM
Find:
a) stock
b) rate of return rs
rs=rRF+RPM*B
Soluition:
rs= alpha + s*rM
a) Bs
b) rate of return rs
1.23%
7%
?
?
1.4425657149
11.33%
Market model
rs= alpha + s*rM
Date
Market Price
Instructions
Work problems 1 & 7 from Chapter 11
Show your formulas in the cells so that I can click on the cell
and see how you got the value. If only the value is shown,
no credit will be given.
Pos
Capital Asset Pricing Model
Cost of Equity=Risk Free Rate+Beta(Market-RiskPremium)
Risk-Free Rate
Yield on the 20 Year US Treasury
Beta
2.78%
0.31725
market Risk Premium
4.50%
Cost of Equity
4.21%
CMG
Expected Return and SD for 1 stock
State of economy
Recession
Normal
Irrational Exuberance
Estimated Stock A Estimated Stock B
Prob of
Return if State
Return if State
State
Occurs
Occurs
0.25
-0.09
-0
You have just noticed in the financial pages of the local newspaper that you can buy a bond ($1,000 par). If the coupon rate
what should the purchase be valued at if your required return on investment