Finance question and answers for July 01, 2023
- Q Badger Corp. has an issue of 6% bonds outstanding with 6 monthsleft to maturity. The bonds are currently priced at $993.54, andpay interest semiannually. The firm's marginal tax rate is...
- Q explain briefly regarding the ethical reaponsibilities financialmanagers have in relation to the firms stakeholders( considerquestions as “ all stakeholders are equally important”, what shouldbe done when the financial managers best...
- Q Cox Media Corporation pays a coupon rate of 10 percent ondebentures that are due in 20 years. The current yield to maturityon bonds of similar risk is 8 percent. The...
- Q 4. You are the CEO of Valu-Added Industries, Inc. (VAI). Yourfirm has 10,000 shares of common stock outstanding, and the currentprice of the stock is $100 per share. There is...
- Q Describe the difference between a line item budget and aperformance budget
- Q Badger Corp. has an issue of 6% bonds outstanding with 6 monthsleft to maturity. The bonds are currently priced at $987.85, andpay interest semiannually. The firm's marginal tax rate is...
- Q last year you purchased a 10 year semi-annual coupon bond withcoupon rate of 12% and face value of $1000. the bonds yield tomaturity was 11% then. a year past and...
- Q For Asset A and for Asset B, compute the average annual return,variance, standard deviation, and coefficient of variation for theannual returns given below. a. Asset A: 5%, 10%, 15%, 4%...
- Q Adjusted WACC. Lewis runs an outdoor adventure company and wantsto know what effect a tax change will have on his? company's WACC.Currently, Lewis has the following financing? pattern:?Equity: 41?% and...
- Q Cost of debt with fees. Kenny Enterprises will issue a bond witha par value of ?$1,000?, a maturity of twenty? years, and a couponrate of 8.6?% with semiannual? payments, and...
- Q You must analyze a potential new product—a caulking compoundthat Cory Materials’ R&D peopledeveloped for use in the residential construction industry.Cory’s marketing manager thinks theycan sell 115,000 tube per year at...
- Q Linda Roy received a$205,000 inheritance after taxes from her parents. She invested itat 6.5% interest compounded quarterly for 8 years. A year later,she sold one of her rental properties for...
- Q Discuss the use of transfer pricing and its application todecision making
- Q Union Local School District has bonds outstanding witha coupon rate of 4.6 percent paid semiannually and 21 years tomaturity. The yield to maturity on these bonds is 3.9 percent andthe...
- Q A bond has a face value of $1,000, a coupon of 4% paid annually,a maturity of 33 years, and a yield to maturity of 7%. What rate ofreturn will be...
- Q Evaluate the Pear Computer Company proposal.2) Conduct a sensitivity analysis that focuses on the cost ofcapital. For a best case scenario, decrease the cost of capital bythree percentage points. For...
- Q Burton, a manufacturer of snowboards, is considering replacingan existing piece of equipment with a more sophisticated machine.The following information is given. · The proposed machine willcost $120,000 and have installation...
- Q Project L costs $75,000, its expected cash inflows are $9,000per year for 8 years, and its WACC is 13%. What is the project'sMIRR? Do not round intermediate calculations. Round your...
- Q Possible outcomes for three investment alternatives and theirprobabilities of occurrence are givennext. Alternative 1Alternative 2Alternative 3OutcomesProbabilityOutcomesProbabilityOutcomesProbabilityFailure60.2070.2080.20Acceptable60.40220.40250.60Successful130.40240.40415.20 Using the coefficient of variation, rank the three alternatives interms of risk from lowest to...
- Q Compared with the sole proprietorship and partnership forms ofbusiness organization, the corporate form generally faces with________ difficulty in raising capital and transferring ownership,________ taxation, and _______ agency problems. a. Less;...
- Q A project has annual cash flows of $3,000 for the next 10 yearsand then $6,500 each year for the following 10 years. The IRR ofthis 20-year project is 13.95%. If...
- Q The financial statements of Isabella Painting Supply are shownin the table below. For simplicity, “Costs” include interest.Assume that Isabella’s assets are proportional to its sales. (10points)Income StatementSales$3,950Costs1,750Pretax income$2,200Taxes (at 40.0%)880Net...
- Q Operating cash flow? (growing each? year; MACRS). MigliettiRestaurants is looking at a project with the following forecasted?sales: ? first-year sales quantity of 31,000? with an annual growthrate of 4.00?% over...
- Q Lena Tucker contributed $20,000 in cash and land with anadjusted basis of $100,000 and a fair market value of $140,000 to anewly formed corporation in return for 1,000 shares of...
- Q Depreciation expense. ? Richardses' Tree? Farm, Inc. has justpurchased a new aerial tree trimmer for $95,000. Calculate thedepreciation schedule using a? seven-year life for both?straight-line depreciation and? MACRS, Use the?...
- Q How does the industry impact a company’s risk? Would therisk associated with the industry/company you selected influenceyour decision to invest? Explain.
- Q Expected ReturnStandard DeviationPortfolio A12%20%Portfolio B6%12%T-bill3%0%You are an investment adviser and you have the three investmentsabove to recommend to your clients. The correlation between A and Bis -0.5.Solve for the optimal...
- Q A gradient payment series is received monthly for 20 years anddeposited into an account. The first payment is $2,000 and thegradient factor is $100 per month. What is the balance...
- Q Randy currently has an obligation that he will pay $1 million ayear for the next 3 years, what is the duration of his obligationif the appropriate discount rate is 5%?If...
- Q Ramblin Wreck is a firm specializing in engineering components.The firm is publicly traded and is considering the followingproject:The project will last 5.00 years with an annual cash flow of$40.00 million....
- Q A project with an up-front cost at t = 0 of $1500 is beingconsidered by Nationwide Pharmaceutical Corporation (NPC). (Alldollars in this problem are in thousands.) The project's subsequentcash flows...
- Q In broad terms, why is some risk diversifiable? Why are somerisks nondiversifiable? Does it follow that an investor can controlthe level of unsystematic risk in a portfolio, but not the...
- Q Bill Clinton reportedly was paid $15.0 million to write his bookMyLife. The book took three years to write. In the time he spent?writing, Clinton could have been paid to make...
- Q Gluon Inc. is considering the purchase of a new high pressureglueball. It can purchase the glueball for $160,000 and sell itsold low-pressure glueball, which is fully depreciated, for $28,000.The new...
- Q Johnny’s Lunches is considering purchasing a new,energy-efficient grill. The grill will cost $37,000 and will bedepreciated according to the 3-year MACRS schedule. It will be soldfor scrap metal after 3...
- Q Assume that Firm XYZ’s ROE= 15%, its beta = 2, the market return= 15%, the risk-free rate = 5%. The firm’s current Dividend PayoutRatio = 60%. If the firm increases...
- Q As discussed in the text, in the absence of market imperfectionsand tax effects, we would expect the share price to decline by theamount of the dividend payment when the stock...
- Q home / study / business / finance / finance questions andanswers / assume gillette corporation will pay an annual dividendof $0.63 one year from now. analysts ...Question: Assume Gillette Corporation...
- Q Jim's Espresso expects sales to grow by 9.7% next year. Assumethat Jim's pays out 83.9% of its net income. Use the followingstatements and the percent of sales method to forecast:A....
- Q A stock pays a dividend of $50 at the end of the first year,with each subsequent annual dividend being 5% greater than thepreceding one. Mandy buys the stock at a...
- Q You are analyzing the U.S. equity market based upon the S&PIndustrials Index and using the present value of free cash flow toequity technique. Your inputs are as follows:Beginning FCFE: $90k...
- Q Solid and Hazardous Waste Management:What is the difference between direct and indirect sitecharacterization methods?Give an example of direct measurement method?Give an example of indirect measurement method?
- Q Nonconstant Growth Stock Valuation Assume that the average firmin your company's industry is expected to grow at a constant rateof 7% and that its dividend yield is 5%. Your company...
- Q Hodgkiss Corporation is evaluating an extra dividend versus ashare repurchase. In either case, $27,000 would be spent. Currentearnings are $2.70 per share, and the stock currently sells for $96per share....
- Q A pension fund manager is considering three mutual funds. Thefirst is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money...
- Q Year Cash Flow 0 ?$8,600 1 4,400 2 4,700 3 4,000a. What is the profitability index for the cash flows if therelevant discount rate is 7 percent?b. What is the...
- Q Assume Gillette Corporation will pay an annual dividend of $0.62one year from now. Analysts expect this dividend to grow at 12.6%per year thereafter until the 55th year.? Thereafter, growth willlevel...
- Q A pension plan is obligated to make disbursements of $4 million,$9 million, and $7 million at the end of each of the next threeyears, respectively. Find the duration of the...
- Q (Annuity payments) Mr. Bill S.? Preston, Esq., purchased a newhouse for ?$100,000. He paid ?$15,000 upfront and agreed to pay therest over the next 25 years in 25 equal annual...
- Q ??(Loan amortization)??On December? 31, Beth Klemkosky bought ayacht for ?$100,000. She paid ?$20,000 down and agreed to pay thebalance in 14 equal annual installments that include both theprincipal and 15...
- Q what type of implications did the Dodd-Frank act have onwall-street? Be specific please. The answer must at least be apage.
- Q Jim's expresso expects sales to grow by 9.9% next year. Usingthe following statements. and the percent of sales method,forecast:a. Costsb.Depreciationc. Net Incomed. Cashe. Accounts Receivablef. Inventoryg. Property, plant, and equipmentIncome...
- Q Calculate the five different criteria for evaluating projects(regular payback,discounted payback, NPV, IRR, and MIRR) for the two projects listedbelow. The firm’sWACC is 9.90%. If the projects are mutually exclusive and...
- 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 NowAfter-Tax CF0–231–9101020The project's beta is 1.7. Assuming rf...
- Q Caspian Sea Drinks' is financed with 69.00% equity and theremainder in debt. They have 12.00-year, semi-annual pay, 5.42%coupon bonds which sell for 98.37% of par. Their stock currentlyhas a market...
- Q Charles Freeman, portfolio manager for Windsor Fund, wasconsidering the purchase of CISCO’s common stock. Freeman believedthat CISCO’s earnings can grow at 20 percent per year over the nextfive years after...
- Q Pork Soda Inc. produces a single product and sells it for $98.00a unit. Variable costs are $62.00 per unit and fixed costs are$12,000,000a. calculate the break even point (number of...
- Q Find portfolio variance You invest $6,000 in the stock and$4,000 in the bondoutcomePRsRbrecession30%-11%16%normal40%13%6%boom30%27%-4%
- Q Caspian Sea Drinks is considering the purchase of a new waterfiltration system produced by Rube Goldberg Machines. This newequipment, the RGM-7000, will allow Caspian Sea Drinks to expandproduction. It will...
- Q A(n) 10.0?%, ?25-year bond has a par value of? $1,000 and a callprice of $1,075. ?(The bond's first call date is in 5? years.)Coupon payments are made semiannually? (so use...
- Q Technology Corporation expects to order 126,000 memory chips forinventory during the coming year, and it will use this inventory ata constant rate. Fixed ordering costs are $200 per order; thepurchase...
- Q Companies U and L are identical in every respect except that Uis unlevered while L has $12 million of 7% bonds outstanding.Assume that all of the original M&M assumptions are...
- Q Bohemian Interior Design has projected the following quarterlysales. The accounts receivable at the beginning of the year is$1,030,000 and the collection period is 58 days. What arecollections for the first...
- Q 14.7-California Health Center, a for ?profit hospital, is evaluatingthe purchase of new diagnostic equipment. The equipment, whichcosts $600,000, has an expected life of 5 years and an estimatedpretax salvage value...
- Q NEW PROJECT ANALYSISYou must evaluate a proposal to buy a new milling machine. Thebase price is $125,000, and shipping and installation costs wouldadd another $15,000. The machine falls into the...
- Q Time Value??Personal Finance Problem?? Misty needs to have?$15 comma 00015,000in55years to fulfill her goal of purchasing a small sailboat. She iswilling to invest a lump sum today and leave the...
- Q A New York City taxi medallion, which gives the owner a licenseto operate a taxi, is a valuable commodity. Medallions trade in aweekly market at about a $1M each. There...
- Q 1. It is April 2019. A US company needs to borrow $100,000,000for three months starting five months from now. The current 3-monthLIBOR is 2.5%. The company is afraid that rates...
- Q Consider the following information on three stocks:State ofEconomyProbability ofState of EconomyRate of Returnif State OccursStock AStock BStock CBoom.25.27.15.11Normal.65.14.11.09Bust.10?.19?.04.05A portfolio is invested 45 percent each in Stock A and Stock Band...
- Q Bob's Taco Shop is considering a two-year project with aninitial cost of $102,000 and cash inflows of $65,000 in year oneand $74,000 in year two.The firm's debt-equity ratio is 0.45...
- Q Case 1The Johnsons Consider Retirement PlanningHarry Johnson’s father, William, was recently forced into earlyretirement at age 63 because of poor health. In addition to thepsychological drawbacks of the unan- ticipated...
- Q FINANCIAL LEVERAGE EFFECTS: Firms HL and LL are identical exceptfor their financial leverage ratios and the interest rates they payon debt. Each has $20 million in invested capital, has $4...
- Q Talking about the revenue drivers and profit margin, we haveincurred certain costs for the production of recycled sneakers. Wewill gather all the recycled materials where it will cost us around$3-5...
- Q Company XYZ has a target capital structure of 30% equity and 70%debt. Its cost of equity is 10%, and cost of debt is 5%. What wouldhappen to XYZ’s WACC if...
- Q The table below offers EBIT for a potential capital investmentfor Fake Company Alpha. You should be able to determine a fewthings once you consider the following:The initial investment is $12,000.Depreciation...
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