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Talmud Book Company borrows $16,000 for 30 days at 9 percent interest. What is the dollar cost of the loan?
After a 5-for-1 stock split, the Strasburg Company paid a dividend of $0.75 per new share, which represents a 9% increase over last year's pre split dividend. What was last year's dividend per shar
The company is contemplating a 3-for-2 stock split. Assuming the stock split will have no effect on the total market value of its equity, what will be the company's stock price following the stock s
How can you calculate the cost of debt? What methods can you use? Provide at least two examples.
The earnings, dividends and stock prices are expected to grow at 7% per year in the future. using the discounted cash flow approach, what is the equity?
A company pays a constant annual dividend of $1.60 a share and currently sells for $28.50 a share. What is the rate of return?
One year ago, you bought a bond for $10,000. You received interest of $400 at the end of the year, as well as your $10,000 principal. If the inflation rate over the last year was five percent, calcu
Use the capital-asset pricing model to predict the returns next year of the following stocks, if you expect the return to holding stocks to be 12 percent on average, and the interest rate on three-m
Lifeline, Inc., has sales of $604,000, costs of $254,000, depreciation expense of $61,500, interest expense of $28,500, and a tax rate of 35 percent. What are the earnings per share?
Why should financial decision makers obtain a good estimate of a firm's cost of capital?
What are the merits and demerits of investment on the financial market via different types of mutual funds?
You are given the following information: Stockholders equity = $3.75 billion, price/earnings ratio = 3.5, common shares outstanding = 50 million, and market/book ratio = 1.9. Calculate the price of
Graser Trucking $12 billion in Assets, and its tax rate is %40. Its Basic Earning Power (BEP) ratio is 15%, and its return on assets (ROA) is 5%. What is its times-interest-earned (TIE) ratio?
What are the differences between common stock and preferred stock? In which situations do corporations use each kind of stock to raise funds?
Calculate the risk premium for each of the following rating classes of long-term securities, assuming that the yield to maturity (YTM) for comparable Treasuries is 4.51%.
A firm has after-tax cash flow from operations equal to $100,000. Operating working capital increased by $20,000, and the firm purchased $30,000 of fixed assets. The firm's free cash flow (asset per
A coupon rate of 6% has a par, or face, value of $20,000. Interest is paid annually. If you required a return of 8% on this bond, what is the value of this bond to you?
A Cash Flow Statement can be used to answer a variety of questions. Which of the following would this statement not be likely to answer?
Find the expected dividend for each of the next 3 years; that is, calculate D1, D2, and D3, Note that D0=$2.00.
Explain the rationale behind that statement as it relates to a company undergoing a decline in its quick asset ratio while at the same time maintaining a stable current ratio.
Preferred stock is said to be a hybrid security having similarities to both common stock and bonds. Explain the similarities and differences between preferred stock, bonds, and common stock.
Thompson, Inc. has Return on Equity (ROE) = 17 percent and an equity multiplier = 2.3. Compute Thompson's Return on Assets (ROA)?
Determine the amount of money in a savings account at the end of five years, given an initial deposit of $3,000 and an 8% annual interest rate when interest is compounded
Receivables are currently $15M on credit sales of $120M Credit sales are expected to grow by 20% next year. Calculate next year's ending receivables balance.
Assume a project has earnings before depreciation and taxes of $10,000, depreciation of $40,000, and that the firm has a 30 percent tax bracket. What are the after-tax cash flows for the project?