Finance question and answers for July 12, 2023
- Q Five years ago a XYZ stock paid a $1.15 dividend. Since then ithas split two for one once and three for two twice. XYZ currentearnings per share are $1.15, and...
- Q 1. A $1,000 face value bond currently has a yield to maturity of6.69 percent. The bond matures in three years and pays interestannually. The coupon rate is 7 percent. What...
- Q Titan Mining Corporation has 7.3 million shares of common stockoutstanding, 265,000 shares of 4.5 percent preferred stockoutstanding, and 150,000 bonds with a semiannual coupon rate of 5.4percent outstanding, par value...
- Q Ladwig Incorporated is considering whether to acquire ShockerEnterprises (SE). Estimate the per-share value of SE using adiscounted FCF approach and the following data: • Debt: $75million• Excess cash: $10 million•...
- Q Holding period and annual (investment) returns. ??Baker BaseballCards, Inc. originally purchased the rookie card of Hammerin' HankAaron for $ 35.00. After holding the card for 55 years, BakerBaseball Cards auctioned...
- Q An investor buys a property for $608,000 with a 25-year mortgagethat requires monthly payments at 5.10% APR. After 18 months theinvestor resells the property for $667,525. How much cash will...
- Q Suppose a homeowner started out with a mortgage in the amount of$225,000, repayable over a 30 year period, making payments at aninterest rate of 4.5% APR, compounded monthly. After making...
- Q Moon Software Inc. is planning to issue two types of 25-year,noncallable bonds to raise a total of $6 million, $3 million fromeach type of bond. First, 3,000 bonds with a...
- Q Discuss and explain the difference between profit/loss and cashflow. How could a company have positive cash flow, but show a netloss at year end? What are some examples of industries...
- Q You are given the following information concerning the shareprice and returns for Cubic Technologies Ltd:DayShare PriceReturnDayShare PriceReturn12307233-0.10422500.0878221-0.0523232-0.0729201-0.09042410.039102180.08552470.025112190.00562600.053122270.0371.1Determine and describe the trading behaviour of an investorwho follows the Dow Theory which...
- Q SmartDeal Inc. hasjust paid dividend of $5. The dividend is expected to increase at16% for the first 15 years, -6% for the next 10 years and then 2%forever. The required...
- Q 1. A $10,000 corporate bond matures in one year, meaning that itreturns $10,000 principal to the owner in one year. The bond alsomakes four quarterly interest payments on the way...
- Q You want to buy a $202,000 home. You plan to pay 20% as a downpayment, and take out a 30 year loan for the rest.a) How much is the loan...
- Q Explain the main source of funding and delivery ofhealthcare services for the population? (Where do they usuallyreceive care? Who usually pays for it? (employers, government,individual) As you explore funding and...
- Q QUESTION 31On January 1, 2000 the price of gold was $282 per ounce. OnJanuary 1, 2013 the price was $1,890. What is the compound rate ofgrowth in the price of...
- Q Quantitative Problem: Rosnan Industries' 2013and 2012 balance sheets and income statements are shown below.Balance Sheets:20132012Cash and equivalents$100 $85 Accounts receivable275 200 Inventories375 250 Total current assets$750 $635 Net plant and equipment2,000 1,490 Total assets$2,750 $2,125 Accounts payable$150 $85 Accruals75 50 Notes payable150 75 Total currentliabilities$375 $210 Long-term debt450 290 Common stock1,225 1,225 Retained earnings700 400 Total...
- Q BALANCE SHEETThe assets of Dallas & Associates consist entirely ofcurrent assets and net plant and equipment. The firm has totalassets of $2.6 million and net plant and equipment equals $2.2million....
- Q A call option with strike price of $100 sells for $3 whereas acall option with strike price of $106 sells for $1. A ratio spreadis a portfolio with the following...
- Q OceanGate sells external hard drives for $280 each. Its totalfixed costs are $50 million, and its variable costs per unit are$210. The corporate tax rate is 30%. If the economy...
- Q Ahmed Fadhili has decided to invest 1 million dollarsby purchasing shares of two companies namely; ABC Ltd and XYZ Ltd.The projections of returns from the shares of the two companiesalong...
- Q 4 year(s) ago, Isaac invested 48,596 dollars. He has earned andwill earn 9.86 percent per year in compound interest. If Priyainvests 93,039 dollars in 2 year(s) from today and earns...
- Q Assume that the returns from an asset are normally distributed.The average annual return for this asset over a specific period was17.2 percent and the standard deviation of those returns in...
- Q A stock has returns of ?6 percent, 12 percent,5 percent, 10 percent, and ?9 percent. What are the arithmetic andgeometric returns? (Do not round intermediate calculations. Enteryour answers as a...
- Q Calculate the college fund required to start a four year collegeprogram in 15 years time. The tuition fees are currently 12,000 andare first payable at the start of year 16....
- Q Read the discussion questions below, select one, and post acomment of at least 150 words. After you have posted your answer,post at least 2 responses to your classmates' answers.If a...
- Q You have been hired as an expert witness in a federal antitrustcase. You are planning your strategy for determining whether or notyour client (the defendant in the case) has engaged...
- Q For this exercise, we assume that there are no taxes andfinancial markets are perfect. The ideal bank's interest rate (EAR)is 8% per year for all maturities. Company X owns one...
- Q 5-58?Spreadsheet Problem When paying off a homemortgage, extra principle payments can have a dramatic impact onthe time needed to pay off the mortgage.Create an amortization schedule for a $200,000, three-yearmortgage,...
- Q Q6: Calculation of ABC stock's beta. Below are 16 monthly·percentage returns of ABC stock and of the index.Calculation of BetaColumn1Column2MonthABC stock returnIndex return1-13.382.52216.795.453-1.670.764-3.462.36510.228.5667.138.6776.7110.887.843.3392.15-5.07107.957.111-8.05-11.57127.684.65134.7514.59147.552.6615-2.363.81164.987.99a. Calculate the sample variances and sample standard...
- Q Years 1-5 Years 6-10 Residual ValueAfter-tax cash flows $150,000 (each year) $200,000 (each year)$5,000,000The above table depicts the consensus estimate of free cashflows for Paradise, Inc. What is the intrinsic...
- Q Virus Stopper Inc., a supplier of computer safeguard systems,uses a cost of capital of 9 percent to evaluate average-riskprojects, and it adds or subtracts 3 percentage points to evaluateprojects of...
- Q Problem 4-30Loan AmortizationYour company is planning to borrow $2 million on a 5-year, 8%,annual payment, fully amortized term loan. What fraction of thepayment made at the end of the second...
- Q The future earnings, dividends, and common stock price ofCallahan Technologies Inc. are expected to grow 5% per year.Callahan's common stock currently sells for $29.75 per share; itslast dividend was $1.80;...
- Q Suppose Big Box Office Supply (BBOS) purchases 100,000 officechairs every year. Ordering costs are $95.00 per order and carryingcosts are $5.75 per chair. What is BBOS’s total inventory cost peryear,...
- Q ASAP please1. In capital budgeting, should the following beignored, or rather added or subtracted from the new machine’spurchase price when estimating initial cash out?ow? When estimatingthe machine’s depreciable basis?a. The market...
- Q ASAP please4. Suppose that a ?rm elected to tighten its trade credit policyfrom “2/10, net 90” to “2/10, net 30.” What effect could the ?rmexpect this change to have on...
- Q Below are the year-end balance sheets for LowellEnterprises:Assets:20182017Cash$ 200,000$ 170,000Accounts receivable864,000700,000Inventories2,000,0001,400,000 Total current assets$3,064,000$2,270,000Net fixed assets6,000,0005,600,000Total assets$9,064,000$7,870,000Liabilities and equity:Accounts payable$1,400,000$1,090,000Notes payable1,600,0001,800,000 Total current liabilities$3,000,000$2,890,000Long-term debt2,400,0002,400,000Common stock3,000,0002,000,000Retained earnings 664,000 580,000 Total...
- Q What are the most common sources of debt financing and what aretheir pros and cons?
- Q Solve the following 2 equations:-4x +2 y = -57x + 8y = -15
- Q Assumption: The company has weight of debt WD = 60%,cost of debt RD = 14%, for unleveraged firm:Bu =1; the company has Tax Rate=35%, risk-free rateRf = 5%, Market Return...
- Q 1. For the following options on Dec 18 corn futures, calculatethe breakeven point and draw the pay-off diagram.a) Writing a put with a $4.00 strike price and a premium of$0.27b)...
- Q Problem 1:As the financial manager of the firm, you are given 6 future projects with their expected cost and yearly profits.YearProject AProject BProject CProject DProject E0-$500,000.00-$400,000.00-$300,000.00-$200,000.00-$100,000.001$135,000.00$112,500.00$90,000.00$57,500.00$30,000.002$145,000.00$125,000.00$90,000.00$62,500.00$32,000.003$155,000.00$130,000.00$90,000.00$67,500.00$34,000.004$165,000.00$135,000.00$90,000.00$70,000.00$36,000.005$175,000.00$140,000.00$90,000.00$72,500.00$38,000.00Calculate the NPV for each...
- Q Edelman Engines has $13 billion in total assets. Its balancesheet shows $2.6 billion in current liabilities, $9.1 billion inlong-term debt, and $1.3 billion in common equity. It has 400million shares...
- Q You are considering the purchase of an investment that would payyou $55 per year for Years 1-4, $30 per year for Years 5-7, and $68per year for Years 8-10. If...
- Q A soybean farmer is hedging production using a fence composed ofthe two following options positions on Nov 18 soybean futures:Holding a put with a $10.00 strike price and a premium...
- Q You are concerned that Trump administration tariffs onChina’s exports will provoke further retaliatory tariffs, and mayspur a trade war. You want to bet on this price change using avertical bear...
- Q You are concerned that faltering NAFTA renegotiationscould jeopardize U.S. exports of cheese to Mexico. You think thatcurrent options prices are too cheap, since you believe prices willbe more volatile than...
- Q Balance Sheet AnalysisComplete the balance sheet and sales information in the tablethat follows for J. White Industries using the following financialdata:Total assets turnover: 1.6Gross profit margin on sales: (Sales -...
- Q (Cost of debt?) Carraway Seed Company is issuing a ?$1000 parvalue bond that pays 11 percent annual interest and matures in 12years. Investors are willing to pay ?$945 for the...
- Q Excel Online Structured Activity: Balance Sheet AnalysisConsider the following financial data for J. WhiteIndustries:Total assets turnover: 2.6Gross profit margin on sales: (Sales - Cost of goods sold)/Sales =21%Total liabilities-to-assets ratio:...
- Q Could your please explain the relationship between firm valueand capital structure.?
- Q Just like any industry, healthcare has its own language.Healthcare managers must be able to classify various costsassociated with day-to-day operations. For this discussion, youwill incorporate the course textbook readings to...
- Q Could you please explain this quote for me?“Although impact investing is clearly focused on producingdesirable solutions to social and environmental problems- what wecall being outcomes driven- it should not be...
- Q Use the option quote information shown here to answer thequestions that follow. The stock is currently selling for $76.Calls Puts Strike Option Expiration Price Vol. Last Vol. Last RWJMar 69...
- Q Horizon Value of Free Cash Flows Current and projected free cashflows for Radell Global Operations are shown below.Actual20162017Projected20182019Free cash flow$602.40$663.08$703.13$759.38(millions of dollars)Growth is expected to be constant after 2018, and...
- Q Diebold IncorporatedDiebold Incorporated manufactures, markets, and servicesautomated teller machines in the United States. The following areselected numbers from the financial statements for Year 1 and Year2 (in millions):Year 1 Year 2Revenues $...
- Q Lumin Telecomm produces specialized telecommunication equipmentand hasmade losses each year over the three years it has been inexistence—it has an ac-cumulated net operating loss of $180 million. In the most...
- Q Maggie’s Skunk Removal Corp.’s 2018 income statement listed netsales of $12.5 million, gross profit of $6.9 million, EBIT of $5.6million, net income available to common stockholders of $3.2million, and common...
- Q Verispace Software sells inventory management software andreported revenuesof $25 million in the most recent financial year. You estimatethat the total mar-ket for inventory management software to be $25 billion, growingat...
- Q Marion Manufacturing, a steel company, announces that it will betaking a ma-jor restructuring charge that will lower earnings this year by$500 million. As-sume that the charge is not tax deductible...
- Q You are analyzing Delta Enterprises, a small publicly tradedcompany with$50 million of debt outstanding, and 25 million shares, tradingat $10/share.The firm generated $40 million in after-tax cash flows lastyear, and...
- Q The borrower is in a $238,000 loan makes interest payments atthe end of each six months for eight years. These are computedusing an annual effective discount rate of 6.5%. Each...
- Q Adamson Corporation is considering four average-risk projectswith the following costs and rates of return: Project Cost ExpectedRate of Return 1 $2,000 16.00% 2 3,000 15.00 3 5,000 13.75 4 2,00012.50...
- Q Develop and present a valuation model for corporate debt with aface value of $100 million dollars. The model should usehypothetical assumptions for the coupon rate and othercharacteristics as well as...
- Q A project requires an initial investment of $2,400,000depreciated straight-line to $0 in 10 years. The investment isexpected to generate annual sales of $700,000 with annual costs of$450,000 for 20 years....
- Q You are a consultant to a large manufacturing corporationconsidering a project with the following net after-tax cash flows(in millions of dollars): Years from Now After-Tax CF 0 –36 1–9 1210...
- Q Consider the following two mutually exclusive projects: YearCash Flow (A)Cash Flow (B)0–$298,120 –$14,710 128,600 4,318 254,000 8,021 355,000 13,322 4425,000 8,341 Whichever project you choose, if any, you require a 6...
- Q Pettit Printing Company has a total market value of $ 100million, consisting of 1 million shares selling for $ 50 million of10% perpetual bonds now selling at par. The company's...
- Q explain why we use a completely different earnings ratemeasure on treasury bills compared to all other treasurymaturities
- Q Masters Machine Shop is considering a four-year project toimprove its production efficiency. Buying a new machine press for$844,800 is estimated to result in $281,600 in annual pretax costsavings. The press...
- Q What is the future value of a 14-year ordinary annuity of $450if the interest rate is 6%?Q11b – What is the present value of the annuity? Hint: Solvefor PV.Q11c –...
- Q Hastings Corporation is interested in acquiring VandellCorporation. Vandell currently has 1 million shares outstanding anda target capital structure consisting of 30% debt; its current betais 1.10 (i.e., based on its...
- Q Zagrot Trucking’s balance sheet shows a total of noncallable $45million long-term debt with a coupon rate of 8.00% and a yield tomaturity of 6.00%. This debt currently has a market...
- Q Assume a market index represents the common factor and allstocks in the economy have a beta of 1. Firm-specific returns allhave a standard deviation of 31%. Suppose an analyst studies...
- Q Consider the following information: Portfolio Expected ReturnBeta Risk-free 8 % 0 Market 10.2 1.0 A 8.2 0.7 a. Calculate theexpected return of portfolio A with a beta of 0.7. (Round...
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