Finance question and answers for September 06, 2023
- Q What isthe value per share be of a company with the followingdividends?Dividend just paid is $1.35Exp Div Growth rates13.50%12.25%9.50%10.60%8.75% ROE = 14.10%Plowback Rate = 42.00%US T-Bill = 1.70%Beta = 0.87Mkt Risk...
- Q If a company has thefollowing current Free Cash Flow and the additional informationprovided, what is the price per share?FCF Year 1 = $145,000Expected growth ratesYr 2: 12.70% Yr 3: 14.10% Yr 4:...
- Q John smith contracted a 30-year FRM(with monthly amortization) loan of $80,000 at an interest rate of15% from Bank of America 5 years ago for a residential property. Inthe meantime, Brookline...
- Q You own a lot in Savannah, Georgia that is currently unused.Similar lots have recently sold for $0.5 million. Over the pastfive years, the price of land in the area has...
- Q Profit or Loss on New Stock IssueSecurity Brokers Inc. specializes in underwriting new issues bysmall firms. On a recent offering of Beedles Inc., the terms wereas follows:Price to public:$5 per...
- Q Down Under Boomerang, Inc., is considering a new 3-yearexpansion project that requires an initial fixed asset investmentof $2.37 million. The fixed asset will be depreciated straight-lineto zero over its 3-year...
- Q Concord stock is currently selling for $20.00 a share but isexpected to either decrease to $18 or increase to $22 a share overthe next year. The risk-free rate is 4...
- Q 7-4: Financial RatioFinanacial ratio analysis is conducted by four types ofanalysis: managers, equity investors, long-term creditors, andshort-term creditors. What is the primary emphasis of each of thesegroups in evaluating ratios?
- Q NPVYour division is considering two projects with the followingcash flows (in millions):0123Project A-$20$5$9$12Project B-$13$8$7$3What are the projects' NPVs assuming the WACC is 5%? Round youranswer to two decimal places. Do...
- Q You are an investor and are looking for opportunities where youcan invest or short sell in the coming 3-5 years (You have a mediumto a long term horizon). You are...
- Q RATIO ANALYSISData for Barry Computer Co. and its industry averagesfollow.Barry Computer Company:Balance Sheet as of December 31, 2016 (InThousands)Cash$58,320Accounts payable$116,640Receivables196,830Other current liabilities65,610Inventories211,410Notes payable to bank43,740 Total current assets$466,560 Total current liabilities$225,990Long-term debt$153,090Net...
- Q Name one company that benefited and one company that suffereddue to the slump in the British Pound post Brexit. What was thetype of exposure that resulted in the profit or...
- Q A process for producing the mosquito repellant Deet has aninitial investment of $160,000 with annual costs of $44,000. Incomeis expected to be $90,000 per year.What is the annual breakeven production...
- Q What approach attempts to chart historical price movements offinancial instruments to predict future price movements instead oftrying to calculate the instrument's fair price? Historical PriceChartist Chartalist Market price
- Q XYZ firm has EBIT of $33 and assets of $200. The firm's debtcarries an interest rate of 6% and the firm has $1.90 of debt forevery dollar of equity. The...
- Q Refunding Analysis Mullet Technologies is considering whether ornot to refund a $250 million, 15% coupon, 30-year bond issue thatwas sold 5 years ago. It is amortizing $3 million of flotationcosts...
- Q As a result of certain debt obligation a company must pay $15000a year for the next 10 years. The next payment is due one year fromnow. The company wants to...
- Q Combined Communications is a new firm in a rapidly growingindustry. The company is planning on increasing its annual dividendby 23 percent a year for the next 4 years and then...
- Q Calculating Interest Rates Solve for the unknown interest ratein each of the following:Present Value Years Future Value189 4 287410 8 88751,700 14 152,18421,400 27 538,600
- Q Albert Co. is considering a four-year project that will requirean initial investment of $9,000. The base-case cash flows for thisproject are projected to be $12,000 per year. The best-case cashflows...
- Q How do taxes impact your accumulation? Why are marginal taxrates important instead of average?What rate should you use for an expected return?
- Q One of the ways to reduce economic and transaction exposure isto restructure. This restructuring involves shifting sources ofrevenues and costs to other locations in order to match cashinflows and outflows...
- Q A wealthy parent is trying to fund a trust fund for his oldestson. The parent has set aside $460,300.00 today in an account thatpays 7.00% annual interest. His oldest son...
- Q Rex inc currently has one product, low-priced stoves. Rex Inchas decied to sell a new line of medium-priced stoves. Sales forthe new line of stoves are estimated at 6 million...
- Q Assume that you hold a. diversified 90,000 portfolio with a betaof 1.20 and that you are in the process of buying 1000 shares of ahigh tech stock at $10 a...
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