Finance question and answers for July 03, 2023
- Q - What is the difference between a spot market and a futuresmarket?- What is the difference between a pure risk and a speculativerisk?
- Q What is the standard deviation of the returns on a $40,000portfolio which consists of stocks C and D? Stock C is valued at$22,000.State ofEconomyProbability ofState of EconomyReturns if State OccursStock...
- Q Problem 20-6Suppose you think Apple stock is going to appreciatesubstantially in value in the next year. Say the stock’s currentprice, S0, is $40, and a call option expiringin one year...
- Q Market Value Capital StructureSuppose the Schoof Company has this book value balancesheet:Current assets$30,000,000Current liabilities$20,000,000Fixed assets70,000,000Notes payable$10,000,000Long-term debt30,000,000 Common stock (1 millionshares)1,000,000Retained earnings39,000,000Total assets$100,000,000Total liabilities and equity$100,000,000The notes payable are to banks,...
- Q Develop a five-year strategic plan with cost estimatesand a time line. It should be 5-7 double-spaced, typed (12 point)pages plus exhibits. Your plan should include/address the followingpoints:Describe the situation facing...
- Q You have been observing the progressive gentrification of yourcity with interest. You realize that the time is ripe for you toopen and run an aerobic exercise center. You find an...
- Q How do you calculate the average return of a bond perweek/month?How do we also get the sharpe ratio once the average return incalculated.
- Q (12-8) Stevens Textile Corporation’s 2016 financial statementsare shown below:Balance Sheet as of December 31, 2016 (Thousands ofDollars)Cash $ 1,080 Accountspayable $ 4,320Receivables 6,480 Accruals 2,880Inventories 9,000 Line ofcredit 0Total current assets $16,560 Notes payable 2,100Net fixed assets 12,600 Total currentliabilities $...
- Q Ghost, Inc., has no debt outstanding and a total market value of$308,100. Earnings before interest and taxes, EBIT, are projectedto be $46,000 if economic conditions are normal. If there is...
- Q You have been given the following return information for amutual fund, the market index, and the risk-free rate. You alsoknow that the return correlation between the fund and the market...
- Q 1. What action ensures that interest rate parity holds?2. What is the difference between a Eurodollar and aEurocurrency? What interest rate is tied to Eurodollars?3. List two strategies a company...
- Q Kubin Company’s relevant range of production is 15,000 to 19,000units. When it produces and sells 17,000 units, its average costsper unit are as follows: Average Cost per UnitDirect materials$7.60Direct labor$4.60Variable manufacturing...
- Q Sell-side analysts are frequently criticised for being toooptimistic or biased, which is manifested in a disbalance betweenthe frequency of their ‘Sell’ vs. ‘Buy’ investment recommendations.List at least three different types...
- Q YOU MUST SHOW ALL WORK (CALCUATIONS) AND DRAW TIME LINES. WRITEWITH THE CORRECT FORMULA TO BE USED1) Jane is 25 years old and was able to save$25,000. After doing some...
- Q You have been given the following return information for amutual fund, the market index, and the risk-free rate. You alsoknow that the return correlation between the fund and the market...
- Q ***Please do not round calculations or the final answersKolby's Korndogs is looking at a new sausage system with aninstalled cost of $910,000. This cost will be depreciatedstraight-line to zero over...
- Q You have just been hired as a financial analyst for BarringtonIndustries. Unfortunately, company headquarters (where all of thefirm's records are kept) has been destroyed by fire. So, your firstjob will...
- Q A company is considering purchasing a new machine that wouldcost $60,000 and the machine would be depreciated (straight line)down to $0 over its four year life. At the end of...
- Q A 3.60 percent coupon municipal bond has 14 years left tomaturity and has a price quote of 95.45. The bond can be called infour years. The call premium is one...
- Q Colsen Communications is trying to estimate the first-year cashflow (at Year 1) for a proposed project. The financial staff hascollected the following information on the project:Sales revenues$15 millionOperating costs (excluding...
- Q A 3.60 percent coupon municipal bond has 14 years left tomaturity and has a price quote of 95.45. The bond can be called infour years. The call premium is one...
- Q What are Nike Inc. Price and Financing policy? Describeand explain. THANK YOU!!!!!!!!!!!
- Q Find the break even point ?Rent is $10,000. Salaries to be paid is $50,000. Misc. Fixedcosts are $40,000.Raw Materials are $4 per unit. Packaging is $.10 cents per unit.Direct Labor...
- Q Project 1 Calculations must be done in ExcelFergy Smith, the financial advisor to Uncovered Car Rentals isevaluating the following types of cars toadd to the fleet:-Topless:- A sporty convertible with...
- Q The Quick Buck Company is an all-equity firm that has been inexistence for the past three years. Company management expects thatthe company will last for two more years and then...
- Q Titan Mining Corporation has 9.1 million shares of common stockoutstanding and 350,000 4.7 percent semiannual bonds outstanding,par value $1,000 each. The common stock currently sells for $39 pershare and has...
- Q Both Bond Sam and Bond Dave have 8 percent coupons, makesemiannual payments, and are priced at par value. Bond Sam has 4years to maturity, whereas Bond Dave has 18 years...
- Q Phil contacts Evan, who does lawn maintenance work, and makesthe following offer: “After my law is mowed, I’ll pay you $25.”Evan responds by saying, “I accept your offer.” Is there...
- Q Olsen Outfitters Inc. believes that its optimal capitalstructure consists of 50% common equity and 50% debt, and its taxrate is 40%. Olsen must raise additional capital to fund itsupcoming expansion....
- Q Shisman Designs is considering a project that has the followingcash flow and WACC data. What is the project's discounted payback?WACC: 8.00%Cash flows Year 0: -$650 Year 1: $400 Year 2:...
- Q The balance sheet for Pie Crust, Inc., is shown here in marketvalue terms. There are 15,000 shares of stock outstanding.Market Value Balance Sheet Cash$140,000 Fixed assets470,000 Equity$610,000 Total $610,000 Total$610,000 In lieu of a dividend of $1.20,...
- Q The following company is expected to grow rapidly for the firstfour year. The EPS is expected to grow at 30, 18, 12, and 9percent, respectively for the first four years....
- Q Consider the following information regarding the performance ofa money manager in a recent month. The table presents the actualreturn of each sector of the manager’s portfolio in column (1), thefraction...
- Q Kelli Blakely is a portfolio manager for the Miranda Fund(Miranda), a core large-cap equity fund. The market proxy andbenchmark for performance measurement purposes is the S&P 500.Although the Miranda portfolio...
- Q The TP Company is looking to replace an existing machine with anew, more efficient version. TP feels the new will extend theproduction life by one year while increasing cash flows....
- Q You have two potential investment projects, Project A andProject B. You can take one, but not both. The annual cash flowsfor the two projects are:Year0123Project A Cash Flow-$50,000$45,000$5,000$5,000Project B Cash...
- Q Last month, Durmus Systems analyzed the project whose cash flowsare shown below. However, before the decision to accept or rejectthe project, the Federal Reserve took actions that changed interestrates and...
- Q Left Bank has a standing rate of 7.9% (APR) for all bank loansand requires monthly payments. What is the monthly payment if aloan is for?(a?) $140,000 for 5 ?years(b?) $255,000...
- Q Suppose the RedRock mutual fund holds the following longpositions: Shares/Company 72,500 shares of Microsoft (MSFT) 42,300shares of Archer Daniels Midland (ADM) 18,320 shares of Abercrombie& Fitch (ANF) 32,000 shares of...
- Q 1. What are the reasons for international capital markets?Explain each reason.2. What is an offshore center? Why do you think that attracts alot of business activities?
- Q Universal Electronics is considering the purchase ofmanufacturing equipment with a 10-year midpoint in its assetdepreciation range (ADR). Carefully refer to Table 12–11 todetermine in what depreciation category the asset falls....
- Q You have always been told that the cost of capital for ClarkUpholstery is 9%, so you started to evaluate the two alternatives(renew or replace) using the 9% cost of capital....
- Q 1) Bruce Wayne is going public with his new business. BerkmanInvestment Bank will be his banker and is doing a best efforts salewith a 3.9% commission fee. The SEC has...
- Q A stock's returns have the following distribution:Demand for theCompany's ProductsProbability of ThisDemand OccurringRate of Return IfThis Demand OccursWeak0.2(42%)Below average0.2(6) Average0.313 Above average0.122 Strong0.247 1.0Assume the risk-free rate is 2%. Calculate the stock's expectedreturn, standard...
- Q Apple has just paid an annual dividend of $3.5. Dividends areexpected to grow by 22% per year for the next 4 years, and thengrow by 14% thereafter. Apple has an...
- Q A man is planning to retire in 20 years. He wishes to deposit aregular amount every three months until he retires, so that,beginning one year following his retirement, he will...
- Q Pat Radigan is planning to buy a Toyota hybrid for $18,749 with$1,500 down and plans to finance the car. Citizens’ Financial Bankquoted a finance charge at 8.5% for 48 months;...
- Q Question: Artistic Clothing is considering an extension projectwhich includes the construction of a new manufacturing warehouse.The required initial investment for the construction is $2 million.the warehouse will be depreciated over...
- Q 7 Balance sheet preparation Adam andArin Adams have collected their personal asset and liabilityinformation and have asked you to put together a balance sheet asof December 31, 2015. The following information...
- Q Growth? Company's current share price is $ 20.25 and it isexpected to pay a $ 1.00 dividend per share next year. After? that,the? firm's dividends are expected to grow at...
- Q One year? ago, your company purchased a machine used inmanufacturing for $105,000. You have learned that a new machine isavailable that offers many advantages and you can purchase it for$140,000...
- Q You are a real estate agent thinking of placing a signadvertising your services at a local bus stop. The sign will cost$10,000 and will be posted for one year. You...
- Q Lease versus BuyBig Sky Mining Company must install $1.5 million of newmachinery in its Nevada mine. It can obtain a bank loan for 100% ofthe purchase price, or it can...
- Q Firm AAA is considering a new three-year new project thatrequires an initial fixed asset investment of $2.28 million. Thefixed asset will be depreciated straight-line to zero over itsthree-year tax life,...
- Q Jonna Vella, Inc. is raising $250,000 in early stage money tofund development of their prototype. The company is still in a veryearly stage, and doesn't feel ready to put a...
- Q Consider a bond that pays $50 semi-annual interest and has aremaining life of 10 years. The bond currently sells for $987 andhas a yield to maturity of 10.20%.a. What is...
- Q A tractor for over-the-road hauling is purchased for $90,000. Itis expected to be of use to the company for 6 years, after which itwill be salvaged for $4,000. Calculate the...
- Q 2. Calculate the expected return, variance, and standarddeviations of stock A, stock B, and obtain the expected return ofan equally weighted portfolio of both (meaning 50% in A, and 50%...
- Q Lobo is a leading manufacturer of positronic brains, a keycomponent in robots. The company is considering two alternativeproduction methods. The costs and lives associated with eachare:YearMethod 1Method 20$6,700$9,9001400620240062034006204620Assuming that Lobo...
- Q Walters Audio Visual Inc. offers an incentive stock option planto its regional managers. On January 1, 2018, options were grantedfor 24 million $1 par common shares. The exercise price is...
- Q RAK, Inc., has no debt outstanding and a total market value of$250,000. Earnings before interest and taxes, EBIT, are projectedto be $40,000 if economic conditions are normal. If there is...
- Q Drilling-Easy (DE) Inc. currently has two? products, low-priceddrills and a line of smart drill bits. DE Inc. has decided to sella new line of? high-priced drills. Sales for the new...
- Q Ah Cheung is the portfolio manager for large pension fund and isconsidering investing $100 million to purchase the following 3choices of ABC Ltd issued bonds:•ABC Bond A matures in 5...
- Q Ahomeowner can obtain a 250,000, 30 year fixed rate mortgage at arate of 6.0% with zero points or at a rate of 5.5% with 2.25points. How long must the owner...
- Q Ron Rhodes calls his broker to inquire about purchasing a bondof Golden Years Recreation Corporation. His broker quotes a priceof $1,140. Ron is concerned that the bond might be overpriced...
- Q You have just sold your house for$1,000,000 in cash. Yourmortgage was originally a? 30-year mortgage with monthly paymentsand an initial balance of$800,000.The mortgage is currentlyexactly? 18½ years? old, and you...
- Q You buy an asset with a purchase price of $5,000 and yourshipping is $1,000. It has a 3 year class life. Show a depreciationschedule below that includes both the depreciation...
- Q Construct the amortization schedule for a $15000 debt that is tobe amortized in 10 quarterly payments at 3% interest per quarter onthe unpaid balance.
- Q Sophia Johnson is 24 years old and single, lives in anapartment, and has no dependents. Last year she earned $41,100 as asales assistant for Office Furniture Rentals, $3,288 of her...
- Q A stock has an expected return of 18.00%. The risk-free rate is1.58% and the market risk premium is 8.24%. What is the ? of thestock?Answer format: Number: Round to: 2...
- Q Your division is considering two projects. Its WACC is 10%, andthe projects’ after-tax cash flows (in millions of dollars) wouldbe as follows:Time01234Project A-$30$5$10$15$20Project B-$30$20$10$8$6a) Calculate the projects’ NPVs, IRRs, MIRRs,...
- Q ABC Limited is seeking for a $10,000,000 finance. Two majorinvestors have put forward two bond terms for ABC’s considerationsand ABC can only choose either one. In both bond terms, ABC...
- Q Control Inc., has no debt outstanding and a total market valueof $100,000. EBIT is projected to be $6,000 if economic conditionsare normal. If there is a strong expansion in the...
- Q Finance question1. Historical overview - A brief overview and historicaltimeline with the key players contributing to the 2008 crisis.Provide bullet points with key factors / dates.Full answer, please
- Q Looking forward - What should we be thinking about to bebetter prepared for the next financial crisis? Consider what kindsof actions, education, awareness, accountability, transparency,oversight or regulations should be implemented...
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