• Q : Differences-similarities of common stocks and bonds....
    Finance Basics :

    Problem 1. Contrast the differences/similarities of common stocks and bonds. Explain how they would be used in the corporate environment.

  • Q : Research online trading sites and drip....
    Finance Basics :

    You will evaluate the choices in purchasing stock via online brokerage accounts (where you can buy and sell stock via the Internet) and the use of dividend reinvestment plans (known as DIPs and DRIP

  • Q : Options affect capital budgeting process....
    Finance Basics :

    1. Identify potential real options that might arrive in this firm's business. 2. Are these options industry specific or company specific? 3. How would these options affect their capital budgeting proc

  • Q : Cost of capital-capital budgeting-capital structure....
    Finance Basics :

    a. What is the after-tax cost of debt?  (assume the company’s effective tax rate = 40%) b. Assuming a $4 dividend paid annually, what is the required return for preferred shareholders (i.

  • Q : Calculate the payback period and profitability index....
    Finance Basics :

    You have been approached by the president of the company with a request to analyze the project. Calculate the payback period, profitability index, net present value, and internal rate of return for

  • Q : Projects total nominal cash flow from assets....
    Finance Basics :

    All corporate cash flows are subject to a 34 percent tax rate. a. What is the project's total nominal cash flow from assets for each year?

  • Q : Business summary-srp system with cdc....
    Finance Basics :

    Put together a business summary of the following in the SRP System with CDC. Three to Four Paragraph each. a) Business Impact b) Measurable Gains

  • Q : What is the approximate total amount of money....
    Finance Basics :

    What is the approximate total amount of money the company raised from issuing these bonds? (Assume semi-annual compounding)

  • Q : How financial markets impact economy and businesses....
    Finance Basics :

    Problem 1. Describe how the U.S. financial markets impact the economy, businesses, and individuals. Problem 2. Explain the role of the U.S. Federal Reserve, the Federal Reserve Chairman, and Board,

  • Q : Calculate the incremental irr for the cash flows....
    Finance Basics :

    Because you are fully aware of the IRR rule's scale problem, you calculate the incremental IRR for the cash flows. Based on your computation, which project should you choose?

  • Q : Legitimate for local and national government agencies....
    Finance Basics :

    Is it legitimate for local and national government agencies to use taxpayer money to help small companies export?

  • Q : Calculate the average rate of return....
    Finance Basics :

    1) Calculate the average rate of return for each stock during the 5-year period 2) Suppose you had held a portfolio of 50% of stock A and 50% of stock B what would have been the realized rate of ret

  • Q : Capital structure and ratios....
    Finance Basics :

    Last year Wei Guan Inc. had $350 million of sales, and it had $270 million of fixed assets that were used at 65% of capacity. In millions, by how much could Wei Guan's sales increase before it is re

  • Q : Money to an alternative investment....
    Finance Basics :

    Enron employees were heavily invested in Enron stock through their 401(k) plans. While companies frequently provide a match in the form of company stock, employees are typically free to move the mon

  • Q : Present value of the dividends over the fast growth....
    Finance Basics :

    The company then expects to settle down to a constant-growth rate of 8 percent annually. If the required rate of return is 12 percent, what is the present value of the dividends over the fast growth

  • Q : Expected return for bp using capm....
    Finance Basics :

    1. Using all this information, what is the expected return for BP using CAPM? 2. Last week I estimated a required rate of return of 10% for BP using the dividend discount model. How does the CAPM nu

  • Q : Long-term instruments and short-term risks....
    Finance Basics :

    Compare long-term instruments and short-term risks, in terms of the various types of risk to which investors are exposed. Explain your answers.

  • Q : Calculate the adjusted present value....
    Finance Basics :

    The company has a target capital structure of 50% debt. Assume that the company will raise the needed funds using equity and debt based on the target capital structure and future cash flows will be

  • Q : Total rate of return on the bond....
    Finance Basics :

    (a) Find the bond's price today and six months from now after the next coupon is paid. (b) What is the total (six month) rate of return on the bond?

  • Q : How many years in a typical perpetuity....
    Finance Basics :

    Question 1. How many years in a typical perpetuity? Question 2. What is the relationship between the future value factor for five years at 5 percent and the present value factor for five years at 5

  • Q : Compound growth rate in patient revenues over time period....
    Finance Basics :

    In 2010 Lilliputian County Hospital's total patient revenues were $15 million. In 2019 patient revenues are expected to be $30 million. What is the compound growth rate in patient revenues over this

  • Q : Method to amortize the discount for bonds....
    Finance Basics :

    The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,862. Use the straight-line method to amortize the discount for these bonds?

  • Q : Net present value of the cash flows....
    Finance Basics :

    Problem: If the average annual rate of return for common stocks is 11.7%, and for treasury bills it is 4.0%, what is the market risk premium? What is the net present value (NPV) of the following cas

  • Q : Calculate the return on holding the stock for a day....
    Finance Basics :

    1. Obtain the closing price, the change in price from the previous day, and the beta. 2. Calculate the return on holding the stock for a day (this should be the change in price over the closing pric

  • Q : What is the operating income for both firms....
    Finance Basics :

    The variable costs of production are $1, and fixed production costs are $12,000. (To ease the calculation, assume no income tax.) 1) What is the operating income (EBIT) for both firms?

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