Chapter 7 Practice Problems 1
1. Leslie's Clothing Stores offers a common stock that pays an annual dividend of $2.70 a share.
The company has promised to maintain a constant dividend. How much are you willing to pay
for one share of this stock if you wan
CH 5 PRACTICE PROBLEMS 2 Spring 2016
1. Nittany Bank charges 12.4 percent compounded monthly on its business loans. Cub Bank
charges 12.7 percent compounded semiannually. As a potential borrower, which bank has a
lower EAR?
2. Beaver Credit Bank wants to
Chapter 6 Practice Problems 1
1. Lycan, Inc., has 7% coupon bonds on the market that have 8 years left to maturity. The bonds make
semiannual payments. If the YTM on these bonds is 9%, what is the current bond price?
2. The Jackson Wardrobe Co. has 10% co
Chapter 6 Practice Problems 3
1. Suppose your company needs to raise $45 million and you want to issue 20-year bonds for this
purpose. Assume the required return on your bond issue will be 7.5%, and you're evaluating two
issue alternatives: a 7.5% annual
Chapter 6 Practice Problems 2
1. Osbourne Corporation has bonds on the market with 10.5 years to maturity, a YTM of 6.9%, and a
current price of $1,070. The bonds make semiannual payments. What must the coupon rate be on the
bonds?
2. If Treasury bills ar
CH 4 Practice Problems - 2
1. Assume the total cost of a college education will be $320,000 when your child enters college in 18
years. You presently have $50,000 to invest. What annual rate of interest must you earn on your
investment to cover the cost o
Caldron, Inc.
2014 Income Statement
($ in millions)
Net Sales
$1,500
COGS
700
Depreciation
500
EBIT
300
Interest Exp. 100
NIBT
200
Taxes
80
NI
120
Dividends Paid
Caldron, Inc.
2013 and 2014 Balance Sheet
($ in millions)
Cash
Acct. Receivable
Inventory
Cur
FIN 301: Corporate
Finance
Chapter 1: An Introduction to Financial
Management
Three Major Business Types
Sole proprietorship
Partnership
General
Limited
Corporation
S-Corp
Limited liability company
Sole Proprietorship
Advantages
Easiest to start
Least
FIN 301: Corporate
Finance
Analyzing Financial Statements
Chapter
The Map of Financial Statement Analysis
Information
Sources
BS
IS
Stmt. of CF
Stmt. of RE
Footnotes
Auditors Rpt.
Industry Data
We begin by gathering relevant
information information.
The M
How to Go Broke . While Making a Profit
Review the monthly results for APC Company. Take note that
APC Co. starts the year with $1,000 in cash and has a givemonth profit of $2,500. Reconcile the decline in cash. Where
does the cash go?
CH 3 Practice Problems
1. UnderWater has net working capital of $6,650 and current assets of $20,475. What is the current
ratio?
2. Safe Auto Parts has total assets of $825,860 and total debt of $445,200. What is the equity
multiplier?
3. Boyd, Inc., has
CHAPTER 4 Practice Problems - 1
1. Suppose you invest $100 for one year at 10% per year. What is the future value in one year?
Suppose you leave the money in for another year. How much will you have two years from now?
2. Suppose you had a relative deposi
Western Money Management INC.
Bond Valuation
7-20 Homework
a) Is a long-term contract which a borrower agrees to make payments of interest and principal on
specific dates to the holders of the bonds.
a. Par or face value
b. Coupon interest rate
c. Maturit
FIN 201 Fundamentals of Financial Management
Excel Spreadsheet Problem #3 - Chapter 5
Background
The spreadsheet problems in FIN 201 are designed to help you develop your Excel expertise. Key learning outcomes for this problem are:
Constructing appropria
Part A
Income Statement
Sales
Operating costs excluding Dep + Amt
EBITDA
Dep + Amt
EBIT
Interest
EBT
Taxes (40%)
Net income
Dividends
$455,150,000
$386,877,500
$68,272,500
$7,388,150
$60,884,350
$8,575,000
$52,309,350
$20,923,740
$31,385,610
$12,554,244
P
7-19
a) Bond A is discount. Bond B is Par. Bond C is Premium.
b) The price of each bond is:
a. Bond A is $856.79.
b. Bond B is $1,000.
c. Bond C is $1,143.21.
c) Bond yields:
a. Bond A= 8.99%
b. Bond B=9.0%
c. Bond C=9.0001%
d)
a. Price for each bond one
Jason Tan
FIN 301
Homework - Chapter 7
P7-19
A. Bond A : Discount
Bond B : Par
Bond C : Premium
B. Bond A : $856.79
Bond B : $1000
Bond C : $1143.21
C. Bond A : 8%
Bond B : 9%
Bond C : 9.6%
D. Bond A : PV - $863.90, Expect Capital Gain Yield - 0.8% , Expe
Jason Tan
FIN 301
Homework 9
P9-18
A. D1 = $1.76 , Dividend Yield = $44 , Capital Gains Yield = 6%
B. The price of each stock will go up because the years of growth has increased, Dividend
will also increased due to more of the maximum growth potentials,
CHAPTER 2
Practice Problems
1) Building a Balance Sheet [LO 1]
Arredondo, Inc., has current assets of $2,310, net fixed assets of $10,700, current liabilities of $1,420,
and long-term debt of $4,120.
What is the value of the shareholders equity account fo
CH 5 Practice problems 1
1. You think you will be able to deposit $4,000 at the end of each of the next three years in a bank
account paying 8 percent interest. You currently have $7,000 in the account. How much will you
have in 3 years?
How much will you
Worksheet Solutions
Comparing Regressive, Progressive, and Proportional Taxes
Theme 3: Fairness in Taxes
Lesson 5: How Taxes Affect Us
Key Terms
progressive taxA tax that takes a larger percentage of income from high-income groups
than from low-income gro