Finance question and answers for July 02, 2023
- Q Harrods PLC has a market value of £121 million and 5 millionshares outstanding. Selfridge Department Store has a market valueof £31 million and 2 million shares outstanding. Harrods iscontemplating acquiring...
- Q You invest in a mutual fund that charges a 3% front-end load, 1%total annual fees, and a 0% back-end load on Class A shares. Thesame fund charges a 0% front-end...
- Q Use a 2-step binomial tree to price an american style put optionwhen the current stock price is $50 and the stock price will moveup or down by 20 percent at...
- Q What kinds of reports should I expect to write in the Financeprofession? Why?
- Q Flashtronics is trying to determine its optimal capitalstructure. The company’s capital structure consists of debt andcommon stock. In order to estimate the cost of debt, thecompany has produced the following table:Debt-to-total- Equity-to-total- Debt-to-equity Bond B-Tcostassets...
- Q ThefollowingforecastsforGassonTronicsweretakenfromanalyst’sreportsinthefourthquarterof2018 ($ millions).IncomeStatement:20192020202120222023Revenues19002075231125982919OperatingExpenses(befint. &dep.)13711546174719752240Depreciation100107111114107BalanceSheet:Change inNetWorkingCapital8191103116129Additions toGrossFixedAssets (CAPEX)174190205220225OtherInformationExpectedeffectivetaxrate30%Debt / TotalCapital40%Marginal DebtRate 4%Beta0.70Risk FreeRate2.75%ExpectedMarketReturn 9.75%Cash &Non-Operating Assets (mil) 150Outstandingshares(mil) 70Usetheaboveinformationtoanswerthefollowingquestions:A.UsingtheCapitalAssetPricingModel,estimatethecostofequity. B.Estimatetheweightedaveragecostofcapitalassumingthecompanymaintainsitscurrentcapitalstructure.C. Estimate theshare price using Free Cash Flows toall providersofc apita landassuming the company’s cash flows continue...
- Q you are evaluating two different silicon wafer millingmachines. The Techron I costs $245,000, has a three- year life anda pretax operating costs of $63,000 per year. The Techron II cosr$420,000,...
- Q Question 1:Corporate Bonds Which of thefollowing describes the call feature of a bond?a- The issuing company may choose to call the bond and requirethe bondholder to turn in the bond...
- Q Was your answer well developed 3-5 Paragraphs in length. Did youanswer with reflection and with examples given in class and textbook??. ?Do you have Spelling and punctuation errors on theassignment...
- Q To pay off a loan of $8,900 due in five years, a person willmake a deposit at the end of each year into an account paying 9.3%interest compounded annually. Determine...
- Q What is the value of the following $1000 par value bonds: Interestrate Required rate ofreturn Years to maturityValue? 4% 7% 10 4% 5% 10 4% 9% 10
- Q National Electric Company (NEC) is considering a $45.12 millionproject in its power systems division. Tom Edison, the company’schief financial officer, has evaluated the project and determinedthat the project’s unlevered cash...
- Q You have analyzed the following four securities and haveestimated each security?s beta and what you expect each security toreturn next year. The expected return on the market portfolio is13%, and...
- Q Client’s Financial Questions:? What is the Capital Asset Pricing Model (CAPM) and how is itused to evaluate whether the expected return on an asset issufficient to compensate the investor for...
- Q As a new junior analyst for a brokerage firm, you are excited todemonstrate the skills you learned in college and prove that youare worth your attractive salary. Your first assignment...
- Q Caspian Sea Drinks is considering the production of a dietdrink. The expansion of the plant and the purchase of the equipmentnecessary to produce the diet drink will cost $23.00 million....
- Q Viserion, Inc., is trying to determine its cost of debt. Thefirm has a debt issue outstanding with 18 years to maturity that isquoted at 109 percent of face value. The...
- Q Bart Software has 9.3 percent coupon bonds on the market with 24years to maturity. The bonds make semiannual payments and currentlysell for 112.5 percent of par.a.What is the current yield...
- Q Youfind a zero coupon bond which is a poor value of $10,000 and 12years to maturity on this bond is 4.9% assuming that is the semiannual compound what is the...
- Q Bellwood Corp. is comparing two different capital structures.Plan I would result in 26,000 shares of stock and $85,500 in debt.Plan II would result in 20,000 shares of stock and $256,500...
- Q Capital Structure AnalysisThe Rivoli Company has no debt outstanding, and its financialposition is given by the following data:Assets (Market value = book value)$3,000,000EBIT$500,000Cost of equity, rs10%Stock price, Po$15Shares outstanding, no200,000Tax...
- Q Q1. Keenan Industries has a bind outstanding with 20years to maturity, an 8.75% coupon paid semiannually, and a 1000$par valuem The bind has 6.50% nominal yeild to maturity, but it...
- Q ime Marsh 1 ?$1010 2 1212 3 1818 4 77 5 1010 a. Calculate theannual rate of return for each year from the above information. b.What is the arithmetic average...
- Q Your investment portfolio consists of $10,000 shares of Dell.The expected return on Dell is 11%, with a standard deviation(volatility) of 43%. Suppose the risk-free rate is 4%, the expectedreturn on...
- Q Master's machine shop is considering a four-year project toimprove its production efficiency. Buying a new machine press for$1,056,000 is estimated to result in $352,000 in annual pretax costsavings. The press...
- Q An electric utility is considering a new power plant in northernArizona. Power from the plant would be sold in the Phoenix area,where it is badly needed. Because the firm has...
- Q NPV.Grady Precision Measurement Tools has forecastedthe following sales and costs for a new GPS? system: annual salesof 46,000 units at ?$16 a? unit, production costs at 37?% of sales?price, annual...
- Q Fijisawa Inc. is considering a major expansion of its productline and has estimated the following cash flows associated withsuch an expansion. The initial outlay would be?$1,850,000?,and the project would generate...
- Q 1. a) Walker & Campsey wants to invest in a new computersystem, and management has narrowed the choice to Systems A and B.System A requires an up-front cost of $125,000,...
- Q WG Investors is looking at three different investmentopportunities. Investment one is a? five-year investment with acost of?$260 and a promised payout of $520 at maturity. Investment twois a? seven-year investment...
- Q Quad Enterprises is considering a new 3-year expansion projectthat requires an initial fixed asset investment of $3.402 million.The fixed asset will be depreciated straight-line to zero over its3-year tax life,...
- Q Seaborn Co. has identified an investment project with thefollowing cash flows.YearCash Flow1$950 21,060 31,340 41,200 (a) If the discount rate is 11 percent, what is the presentvalue of these cash flows?(b)What is the present...
- Q Canada's current account deficit increased by CAD 5.4 billion inthe fourth quarter of 2018 to CAD 15.5 billion from a downwardlyrevised 10.1 billion in the previous period and compared withmarket...
- Q You are a commercial real.estte broker, eager to sellan office building. An investor is interested but demand 20% returnof her equitt investment. The building's selling price is 25Million Pesos, and...
- Q A bond that matures in 19 years has a ?$1,000 par value. Theannual coupon interest rate is 12 percent and the? market'srequired yield to maturity on a? comparable-risk bond is...
- Q Harris Inc., has equity with,a market value of $23.2million and debt with,a market value,of $11.6 million . Treasurybills that mature in one year yield 4 percent per yearbandthe,expected return on...
- Q Suppose an investor creates a portfolio of two assets: Stock Aand Stock B. Calculate the expected return on the minimum varianceportoflio. (Enter percentages as decimals and round to 4decimals)StateProb(State)Stock AStock...
- Q The table below shows the closing monthly stock prices for IBMand Amazon. Calculate the simple three-month moving average foreach month for both companies. (Input all amounts aspositive values. Do not...
- Q Senior management asks you to recommend a decision on whichproject(s) to accept based on the cash flow forecasts provided.Thefirm uses a 3-year cutoff when using the payback method. The hurdlerate...
- Q Here is the situtation--- Choosing best public policyproposal to take --- READ ALL and show calculations. Assignment isbelowAs you know, Soundville currently has no municipal trashcollection and so residents must...
- Q Now consider the set of portfolios that can be obtained bycombining the stock and the bond. Please show your detailedcalculations or provide arguments to support youranswersAllocation to StockAllocation to BondPortfolio...
- Q Down Under Boomerang, Inc., is considering a new three-yearexpansion project that requires an initial fixed asset investmentof $2.64 million. The fixed asset falls into the three-year MACRSclass. The project is...
- Q Discuss the distinction between intellectual property andtangible property or real estate. What forms of intellectualproperty exist? Locate a high profile legal case (that actuallywent to court), where a form of...
- Q Suppose a U.S. investor wishes to invest in a British firmcurrently selling for £30 per share. The investor has $6,000 toinvest, and the current exchange rate is $2/£.Suppose now the...
- Q The Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$990,000, and it would cost another $20,500 to install it. Themachine falls into...
- Q X, Inc. is a volume manufacturer of high technology automotivemirrors (including cell link and voice activation). FX is lookingto expand their operations to add a second product line capable ofproducing...
- Q Down Under Boomerang, Inc., is considering a new three-yearexpansion project that requires an initial fixed asset investmentof $2.61 million. The fixed asset will be depreciated straight-lineto zero over its three-year...
- Q You are the financial analyst for a tennis racket manufacturer.The company is considering using a graphitelike material in itstennis rackets. The company has estimated the information in thefollowing table about...
- Q Problem 8-6 Expected returns Stocks A and B have the followingprobability distributions of expected future returns: Probability AB 0.1 -10% -29% 0.2 6 0 0.4 10 24 0.2 18 28...
- Q Costs can be categorized in various ways, including thefollowing:Fixed versus variable costsRelevant versus irrelevant costsDirect versus indirectDiscuss the following in your main Discussion Board post:Why is it important for a...
- Q Superior Clamps, Inc.,has a capital structure consisting of 8.4 million shares of commonstock and 914,000 warrants. Each warrant gives its owner the rightto purchase one share of newly issued common...
- Q Problem 15-17 Comparison of private and public debt offering[LO15-1]The Landers Corporation needs to raise $1.70 million of debt ona 20-year issue. If it places the bonds privately, the interestrate will...
- Q 10-4. Do you thinkthat currency speculators perform a valuable service by correctingovervalued or undervalued currencies?
- Q 1. A fund had the following annual prices and dividends(beginning of the year): 2002 2003 2004 2005* 2006 2007 $50 $55 $63$20 $24 $23 $1 $1 $.40 $.40 $.40 *...
- Q One year? ago, your company purchased a machine used inmanufacturing for $ 115,000. You have learned that a new machine isavailable that offers many? advantages; you can purchase it for...
- Q Instructions:You are required to use a financial calculator or spreadsheet(Excel) to solve the following capital budgeting problem (samplequestions and solutions are provided for guidance): WindrunnerCorp. is considering a new machine...
- Q The CBA Corporation is considering a change in its capitalstructure. They currently have $10 million (market value) in debtat an interest rate of 5.6%. Their stock price is $35 per...
- Q State of the economy Probability Stock P Stock Q Boom .7 32% 18%Recession .3 -14% -5% a. What is the expected return of Stock P? b.What is the expected return...
- Q onsider the following information regarding the performance of amoney manager in a recent month. The table presents the actualreturn of each sector of the manager’s portfolio in column (1), thefraction...
- Q Jane Heinlein is the payroll accountant for Sia Lights ofCarter, Nebraska. The employees of Sia Lights are paid biweekly. Anemployee, Melinda Gunnarson, comes to her on September 14 andrequests a...
- Q Expound on a holistic view of exchange rate determination.Address the technical, efficiency and fundamental views of ERs.Give examples of technical and efficiency determination of ERs
- Q 6. A project with an initial cost of $58,050 is expected togenerate annual cash flows of $15,480 for the next 7 years. What isthe project's internal rate of return?9. Rossdale...
- Q A prospective MBA student earns $55,000 per year in hercurrent job and expects that amount to increase by 7% peryear.She is considering leaving her job to attend businessschool for two...
- Q BETHESDA MINING COMPANYBethesda Mining is a midsized coal mining company with 20 mineslocated in Ohio, Pennsylvania, West Virginia, and Kentucky. Thecompany operates deep mines as well as strip mines. Most...
- Q Each product will have a life cycle, although its exact shapeand length is not known in advance. Briefly explain each phase ofthe product life cycle. What is competition-based pricing?Distinguish between...
- Q Assume that in 2017, The Shallonz Corporation reported netincome of $143 million, and paid dividends totaling $36.5 millionthroughout the year. Their net income has been growing at about 5%per year...
- Q Companies invest in expansion projects with the expectation ofincreasing the earnings of its business.Consider the case of McFann Co.:McFann Co. is considering an investment that will have thefollowing sales, variable...
- Q Assume that Atlas Sporting Goods Inc. has $820,000 in assets. Ifit goes with a low-liquidity plan for the assets, it can earn areturn of 13 percent, but with a high-liquidity...
- Q A $1,000 par value bond is currently valued at $1,050. The bondpays interest semi-annually, has 9 years to maturity, and has ayield to maturity of 7.72 percent. The coupon rate...
- Q Carmen’s Beauty Salon has estimated monthly financingrequirements for the next six months as follows: January$9,300April$9,300February3,300May10,300March4,300June5,300Short-term financing will be utilized for the next six months.Projected annual interest rates are: January7%April14%February8May12March11June12What long-term interest rate...
- Q Jetta production cost in 2002 and 2003 was 14,000 Euro perJetta. Jetta sold in US at $15,000 in 2002 and 2003. Forward hedgeexchange rate was 1 $/Euro in 2003. Rate...
- 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 Use the above information to answer Questions 1 - 17. KentuckyHardware Company (KHC) is considering an investment project thatrequires a new machine for producing special tools. This newmachine costs $1,000,000...
- Q Dorman Industries has a new project available that requires aninitial investment of $6.5 million. The project will provideunlevered cash flows of $875,000 per year for the next 20 years.The company...
- Q At times firms will need to decide if they want to continue touse their current equipment or replace the equipment with newerequipment. The company will need to do replacement analysis...
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