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Answers
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12-7
2010
Sa
Input correct amounts in the yellow cells below.
Percent Correct
100.00%
Name: Swapna Reddyshetty (SREDDY1101)
Chapter 2. BAM V3
You will see your % Correct in Cell B2 Correct when you have finished
W
(6-1) Portfolio Beta : An individual has $35,000 invested in a stock with a beta of 0.8 and
another
$40,000 invested in a stock with a beta of 1.4. If these are the only two investments in her
portfol
(121) AFN Equation
Baxter Video Products sales are expected to increase by 20% from $5 million in 2010 to $6 million in
2011. Its assets totaled $3 million at the end of 2010. Baxter is already at ful
(21) Personal After-Tax Yield An investor recently purchased a corporate bond
that yields 9%. The investor is in the 36% combined federal and state tax
bracket. What is the bond's after-tax yield?
An
(4-1) If you deposit $10,000 in a bank account that pays 10% interest annually, how much will
be in your
account after 5 years?
ANSWER:
Principle amount (P)= $ 10,000
number of years (n) = 5 years
rat
(5-1) Jackson Corporations bonds have 12 year remaining to maturity. Interest is paid
annually, the bonds have a $1000per value and the coupon interest rate is 8%. The bound
have a yield to maturity o
10-1) A project has an initial cost of $52125, expected net cash inflow of $12,000 per year
for 8 years, and a cost of capital of 12%. What is the projects NPV?
Answer:
NPV = -$52,125 + $12,000[(1/i)
(7-1) Thress Industries just paid a dividend of $1.50 a share (i.e., D0 = $1.50). The dividend is
expected to grow 5% a year for the next 3 years and then 10% a year thereafter. What is the
expected d
(9-1) Calculate the after-tax cost of debt under each of the following conditions:
a. Interest rate of 13%, tax rate of 0%
b. Interest rate of 13%, tax rate of 20%
c. Interest rate of 13%, tax rate of
Contain formulas and references to calculations. Click on the cells and see the calculations or references
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Contain formulas and references to calculations. Click on the cells and see the calcu
Contain formulas and references to calculations. Click on the cells and see the calculati
Answers
Contain formulas and references to calculations. Click on the cells and see the calculati
12-7
2010
Sa
For a firms stock, there exists the possibility of having both systematic and unsystematic risk.
Systematic risk is a market-related risk whereas unsystematic risk is the firm-specific risk. Since
uns
When calculating beta, this particular value provides a slope that is the ratio of the volatility of the
investments rate of return to the volatility of the market index rate of return (Tofallis, n.d.
With regards to bond ratings, there exists a major issue regarding the ratings process in which a bond
issuer will pay the rating agency. Credit rating agencies are subject to agency problems since ra
With the tremendous federal deficit of the United States rising, the U.S. treasury has re-financed
maturing debt by auctioning sales of bills, notes, and bonds (Garbade, 2004). The treasury usually fa
The manipulation of an earnings statement has been desired by many accountants in order to
meet specific expectations and forecasts. When an earnings statement meets or exceeds the specific
analyst fo
Insider trading has been considered an unethical concept due to its bad reputation and the ability to
have sensational results for those who participate in it. However, many people have asked whether
Going public has been considered to be a major consequence for a firm due to the many changes in
ownership and financial structure. However, many businesses decide to go public in order to expand
thei
Earnings management can be defined as a legal management decision making tool in order to achieve
stable and predictable financial results (Rahman, Moniruzzaman and Sharif, 2013). Ultimately, it is
re
With regards to net working capital, this is defined as the difference between operating current assets
and liabilities (Bringham & Ehrhardt, 2015). Ultimately, it is the working capital that is acqui
LESSON 1
Financial Statements, Cash Flow, and Taxes
1
2
Topics in Lesson
Income statement
Balance sheet
Statement of cash flows
Free cash flow
MVA and EVA
Corporate taxes
Personal taxes
Determi