Finance question and answers for July 31, 2023
- Q Green Tree Corporation is paying a dividend of $4 today. Itexpects dividends to grow at 25 percent for the next three yearsand to stabilize at 10 percent per year thereafter....
- Q Question 7A stock's current price is 209 and it hasdeclared dividends of $0.8/share each to be paidin 38 days, 158 days, and 278 daysfrom now. You are purchasing a 300-day forward contract.(Assume that the risk free rate is 2%.)What is the...
- Q Case 3: We find the data for a municipal bond issued by theIllinois state government. The bond’s “last trade date” (i.e.,settlement date) is June 05, 2019. The bond’s “maturity date”...
- Q 3. KrugerIndustrial Smoothing has a target capital structure consisting of30% debt, 5% preferred stock, and 65% common equity. Kruger has20-year, 7.25% semiannual coupon bonds that are selling for $875.Kruger’s preferred...
- Q In your own words, explain Flash Trading and Dark Pools. Do youthink they are fair? Why or why not? How should the governmentregulate them? In your own words , explain...
- Q Angie Corporation is evaluating whether to lease or purchaseequipment. Its tax rate is 30 percent. If the companypurchases the equipment for $2,000,000 it will depreciate it over 4years, using straight-line depreciation....
- Q Explain how agency conflicts arise in anorganization. What are the appropriate solutions to reduce agencycosts? Cite appropriate examples from SaudiFirms.
- Q You are shown the following data. If the correlationcoefficient between the combined portfolio of A+B and C is 0.2,what would happen to the overall volatility of the new portfolio ifwe...
- Q if I were to tell you that a stock hs a significantly positivealpha but and extremely high beta, is this still stock a good oneto own ? why or why...
- Q How much is your arbitrage profit in Euros atexpiration, if you know that the current exchange rateis Euro 1.2 / GBP, the 60-day forwardrate is Euro 1.18 /GBP, the risk free rate in Europe is...
- Q Assume Nike is exposed to a currency portfolio weighted 50percent in Canadian dollars and 50 percent in Mexican pesos. Nikeestimates the standard deviation of quarterly percentage changes tobe 4 percent...
- Q Some recent financial statements for Gutfeld Golf, Inc.,follow.GUTFELD GOLF, INC.Balance Sheets as of December 31, 2016 and 2017 2016 2017 2016 2017AssetsLiabilities and Owners’ Equity Current assetsCurrent liabilities Cash$6,407$9,410 Accounts payable$3,413$3,846 Accounts receivable6,7028,149 Notes payable2,7683,416 Inventory13,75715,930 Other138165 Total$26,866$33,489 Total$6,319$7,427Long-term debt$25,200$27,366Owners’ equity Common stock and paid-in...
- Q Greentop Inc. plans on increasing its annual dividend by 15percent a year for the next four years and then decreasing thegrowth rate to 2.5 percent per year. The company just...
- Q You are scheduled to receive annual payments of $8,600 for eachof the next 27 years. The discount rate is 7.0 percent. What is thedifference in the present value if you...
- Q Angie Corporation is evaluating whether to lease or purchaseequipment. Its tax rate is 30 percent. If the companypurchases the equipment for $2,000,000 it will depreciate it over 4years, using straight-line depreciation....
- Q Shown below are exchange rates for severalcurrencies. US$ per 1 euroUS$ per 1 francMexican peso per US$1Spot rate1.211.0319.6830-day forward rate1.191.0620.1560-day forward rate1.151.0721.28A U.S. company purchases goods from several foreign companieswith payment...
- Q Calculation of individual costs and WACC:Dillon Labs has asked its financial manager to measure the cost ofeach specific type of capital as well as the weighted average costof capital. The...
- Q The Marcus Company is evaluating the proposed acquisition of anew machine. The machine's base price is $350,000, andit would cost another $125,000 to modify it for specialuse. The machine falls into the...
- Q Assume that the United States invests heavily in government andcorporate securities of South Korea (hereafter, ‘Korea’). Inaddition, residents of Korea invest heavily in the United States.Approximately $20 billion worth of...
- Q Rackin Pinion Corporation’s assets are currently worth $1,065.In one year, they will be worth either $1,000 or $1,340. Therisk-free interest rate is 3.9 percent. Suppose the company has anoutstanding debt...
- Q Why is operating leverage so crucial to profit growth? Shouldcompanies be ready to replace variable costs such as labor withfixed costs such as technology and automation?
- Q ATT is considering a project. The project requires to purchasean equipment with a cost of $1.55 million. The equipment will bedepreciated straight-line to a zero book value over the 9-year...
- Q Currently the level of the S&P 500 Index is 1300, and theyield on the 90-day treasury bill is 2.75%. The following tablelists the forecasts of an economist for the S&P...
- Q Jim Ohlson is leaving tomorrow for a three day business trip toChicago and is trying to decide the most economical way to get toand from the airport and his home....
- Q Jennifer K. is analyzing a project and has determined that theinitial cost will be $1,519,000 and the required rate of returnneeds to be 14 percent. The project has a 60...
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