A bond is priced at 885 and pays interest semiannually, with each payment being 32.50. It matures in 12 years and has a yield to maturity of 8.01%. What is the current yield on the bond?
04 Sep 2020Aine would like to create a portfolio that is equally invested in a risk-free asset and two stocks. The one stock has a beta of 0.94. What does the beta of the second stock have to be if Aine wants the portfolio risk to equal that of the overall market
04 Sep 2020A bond for IBM maturing in 12 years and 3 months has quarterly coupon payments of $11.50. If the current interest rate on this bond is 5.5% (yield to maturity), which of the following is true?
04 Sep 2020what is mean by foreign exchange risk? how can forwrd exchange contracts be used to manage foreign exchange risk?Asked on 31 Dec 2019
04 Sep 2020Documenting ownership of bonds can be handled by a registrar and transfer agent.True or False
04 Sep 2020Which of the following would be most likely to result in an increase in a firms dividend payout ratio? Its access to the capital markets decreases. It has more high-return investment opportunities Its accounts receivable increase due to a change in its credit policy. It has fewer...
04 Sep 2020Choose one financial topic (i.e., Stocks, Bonds, US Economy, Oil, China Economy, Interest Rates, Foreign Currencies, Japan Economy, Precious Metals, European Econom, etc.) and answer the following questions: What is the history of your topic (include necessary references, charts,...
04 Sep 2020Nicholson Roofind Materials Inc is considering two mutually exlusive projects, each with an initial investment of $160,000. The companys board of directors has set a 4 year payback requierement and has set its cost of capital at 7%. The cash inflows associated with the two projec...
04 Sep 2020Hannah inc. has warrants outstanding that are selling at a $3 premium above intrinsic value. Each warrant allows its holder to purchase 1 share of common stock for $25. if the common stock currently sells for $29, what is the warrant price?
04 Sep 2020Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows of $9,550 per year for 8 years, and a cost of capital of 8.35%. Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer...
04 Sep 2020Tinker Bell uses a discount rate of 7.2%. Assuming that the company used that to calculate the PV of the following cash flows, what is their present value:YearCash Flow1$10,0002$11,0003$12,0004$13,0005$14,0006-15$15,000 each year(Points : 3)$144,818 $129,723 $127,176 $ 90,937 ...
04 Sep 2020Zippy Pasta Corporation (ZPC) has a constant growth rate of 7%. The company retains 30% of its earnings to fund future growth. ZPCs expected EPS (EPS1) and rs for various capital structures are given below. What is the optimal capital structure for ZPC?
04 Sep 2020You own a factory in Miami. The monthly production of the factory is $100,000 except during June-September, when it falls to $80,000 due to the heat in the factory. In January 2016 you get an offer to install an air-conditioning system in your factory. The cost of the system is $...
04 Sep 2020What are the advantages and disadvantages of financing through the use of âtermâ loans?
04 Sep 2020What is the price of the Corporate Bond if it trades for 103.5and 87.75 ?
04 Sep 2020A firm is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO wants to use the IRR criterion, while the CFO favors the NPV method. You were hired to advise the firm on the best procedure...
04 Sep 2020According to your textbook, which of the following converted to a corporate form in order for better access to capital from the LLP form? (Points : 3)PriceWaterhouseCoopers Baker and Botts Proctor and Gamble Goldman Sachs None of the above
04 Sep 2020The CFO normally distributes the financial responsibilities between: (Points : 3)controller and CEO CEO and Treasurer controller and Treasurer It is not the CFOs job to distribute this responsibility. It is the prerogative of the Board of Directors.A firm has revenue of $82,00...
04 Sep 2020Which of the following statements is CORRECT?A. One of the disadvantages to a corporation owning preferred stock is that 70% of the dividends received represent taxable income to the corporate recipient, whereas interest income would be tax free.B. A major disadvantage of financi...
04 Sep 2020Problem 21-1 MM Model with Zero TaxesAn unlevered firm has a value of $475 million. An otherwise identical but levered firm has $75 million in debt. Under the MM zero-tax model, what is the value of the levered firm? Enter your answer in millions. For example, an answer of $1.2 ...
04 Sep 2020Assume that you are a consultant to Morton Inc., and you have been provided with the following data: dividend expected to be paid, D1 = $1.00; current stock price, P0 = $25.00; and expected dividend growth rate, g = 6% (constant). What is the cost of equity from retained earnings...
04 Sep 2020Amy Jennings is purchasing her first home. It costs $130,000 and she will make a 10% down payment. Her bank has offered her an interest rate 4.5% fixed with 2 points. She has asked you to compute the cost of the two points.A) $2,600B) $2,340C) $5,265D) 5,850E) $1,170
04 Sep 2020If you want to calculate the beta of a stock using Excel, you should use:the "beta" commandthe "ROR" commandthe "regression" commandthe "slope" commandyou need to write your own formula in Excel
04 Sep 2020For a typical firm, which of the following is correct? All rates are after taxes, and assume the firm operates at its target capital structure. (rd: cost of debt; re: cost of common equity; rs: cost of retained earnings; WACC: weighted average cost of capital)A. WACC > rd > rs > ...
04 Sep 2020The Internal Growth rate of a firm is a function of:1) b, the "plowback ratio"2) the Dupont ratio3) the equity multiplier4) the EPS5) the PE ratio
04 Sep 2020Several years ago the Haverford Company sold a $1,000 par value bond that now has 25 years to maturity and an 8.00% annual coupon that is paid quarterly. The bond currently sells for $900.90, and the companyâs tax rate is 40%. What is the component cost of debt before adjusted ...
04 Sep 2020Explain the source effects. Based on this explanation suggest a source to use for an advertisement for the following products, services, or ideas (explain your rationale):(a) Golf shoes(b) Weight-loss product(c) Hair salon(d) Breast cancer awareness
04 Sep 2020Explain the source effects. Based on this explanation suggest a source to use for an advertisement for the following products, services, or ideas (explain your rationale):(a) Golf shoes(b) Weight-loss product(c) Hair salon(d) Breast cancer awareness
04 Sep 2020If the expected dividend next year is $3.00, the current price is $20, and the growth rate is 3%, what is the ROR of a share of common stock?options:10%12%14%16%18%
04 Sep 2020The Jelly Jar has total assets of $79,600 and an equity multiplier of 1.35. What is the debt-equity ratio?
04 Sep 2020Which of the following statements is INCORRET regarding a public policy exception for wrongful discharge? It is an exception to employment-at-will doctrine. It is developed simultaneously in different states. All states recognize this tort and define it consistently. States do no...
04 Sep 2020You purchase 100 shares of stock for $50 a share. The stock pays a $2 per share dividend at year-end. What is the rate of return on your investment for the end-of-year stock prices listed below? What is your real (inflation-adjusted) rate of return? Assume an inflation rate of 3%...
04 Sep 2020Janice and Steve Lester are planning on purchasing their first home and are interested in determining the maximum monthly mortgage payment they can qualify for given that the lender has indicated that their total installment loan payments cannot exceed 35% of gross monthly income...
04 Sep 2020The Porcelain Company, Inc. makes five remittances to the bank each month. As the companyâs Chief Financial Officer, you are conducting a review of the current system being utilized. Your accounting department has provided you with the following information: (assume each month ...
04 Sep 2020Titan Mining Corporation has 8.9 million shares of common stock outstanding and 330,000 5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $37 per share and has a beta of 1.45, and the bonds have 15 years to maturity and sell for 1...
04 Sep 20201.What are the differences between sales and operations planning and budgeting?2.A gear manufacturer schedules production of one of the gears in batches of 200 units whenever the projected ending inventory balance in a month falls below 30 units. It takes one month to make a batc...
04 Sep 2020One-year Treasury bills currently earn 3.05 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.55 percent and that two years from now, 1-year Treasury bill rates will increase to 3.95 percent. If the unbiased expectations theory is correct, ...
04 Sep 2020The Wall Street Journal reports that the rate on 7-year Treasury securities is 1.70 percent and the rate on 9-year Treasury securities is 2.65 percent. According to the unbiased expectations theory, what does the market expect the 2-year Treasury rate to be seven years from today...
04 Sep 2020Bond Valuation with Semiannual PaymentsRenfro Rentals has issued bonds that have a 7% coupon rate, payable semiannually. The bonds mature in 7 years, have a face value of $1,000, and a yield to maturity of 8%. What is the price of the bonds? Round your answer to the nearest cent.
04 Sep 2020Arnot Internationals bonds have a current market price of $1,250. The bonds have an 12% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).What is the yield to maturity? Roun...
04 Sep 2020A)The monthly total cost for your companys cash collection system:-= Total Variable costs Fixed costs= Number of remittances * [(Face value * total float days * opportunity cost) Bank charges] Fixed costs= 2000 * [ 10000 * 10(NOTE 1) * 0.05 / 365 0.25 ] 300= 2000 * [ 10000 *...
04 Sep 2020National Imports, Inc. is a medium-size national auto repair shop for company of fleet cars with its corporate headquarters located in Orlando, Florida. The company operates in five states in the Northeastern United States. As the chief cash manager for the company; one of your r...
04 Sep 2020When several independent banks operate under a contractual agreement to provide lockbox services for each others custumers, this arrangement is know as a :B.The measurement that incorporates both the time lag and the dollar amount of remittances is known as a:
04 Sep 2020Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 8%, E(2r1) = 9%, E(3r1) = 9.4%, E(4r1) = 9.75% Using the unbiased expectations theory, calculate t...
04 Sep 2020Find the time it takes for $5,800 to double when invested at an annual interest rate of 11%, compounded continuously. years= Find the time it takes for $580,000 to double when invested at an annual interest rate of 11%, compounded continuously. years=
04 Sep 2020How would you change the Cash Conversion Cycle (CCC)? Would you prefer longer or shorter CCC?
04 Sep 2020Your department is budgeting miscellaneous expenses for the next 5 years. Your best guess at the annual inflation rate is 3.9%, and the combined MARR is 15%. Expenses currently run $14,500 per year. Assume that expenses are end-of-year payments. Determine the then-current dollar ...
04 Sep 2020Henredon purchases a high-precision programmable router for shaping furniture components for $250,000. It is expected to last 12 years and have a salvage value of $7,000. It will produce $70,000 in net revenue each year during its life. All dollar amounts are expressed in real do...
04 Sep 2020A company purchases special equipment for $75,000. The equipment will be subjected to wear and will need to be replaced in five years. Using MACRS depreciation rates of 25% for first year, 30% for second year, 18% for third year, 11.37% for fourth year, 11.37% for fifth year and ...
04 Sep 2020You are given an investment to analyze. The cash flows from this investment are End of year $1,860 $3,522 $764 $3,963 $1,173 What is the future value of this investment at the end of year five if 15.46 percent per year is the appropriate interest (discount) rate?
04 Sep 2020
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