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Assume that both portfolios a and b are well diversified? that E(rA)=12% and E(rB)=9%. If the economy has only one factor and beta=1.2 whereas beta=.8, what must be the risk-free rate?
Are liquidations likely to be more common for public utility, railroad, or industrial corporations? Why?
As the difference between the costs of short- and long-term debt becomes smaller, which financing plan, aggressive or conservative, becomes more attractive?
Against what types of risks should a wealth-maximizing firm try to purchase insurance? What types of risks should be self-insured?
A mortgage company offers to lend you $85,000; the loan calls for payments of $8,273.59 per year for 30 years. What interest rate is the mortgage company charging you?
A 6-year bond pays interest of $80 annually and sells for $950. What are its coupon rate, current yield, and yield to maturity?
If the firm has a target capital structure of 70% equity, and 30% debt, the firm's optimal dividend payout ratio (assuming only retained earnings will be used) under the residual model is?
Mallard has lease total lease payments of $ 120,000 and sinking fund payments totaling $ 100,000. Using the information from "A" and "B" above, their fixed coverage charge ratio is?
The city will pay for the supplies from available expendable financial resources. What is and shows the appropriate journal entry needed to record this information?
The risk-free rate is 8%, the average market return is 12%, and the projects's beta is 1.5. The project's NPV is?
Based solely on the information below, and assuming that the projects are mutually exclusive, if the firm's cost of capital is 14% it will?
What format is this company using to prepare the statement of cash flows? Do you agree with you colleague's thinking? Why or why not?
Year 0 = $5,000 ; Year 1-3 = $8,000 ; Year 4 = $12,000. If payment is made at the end of each period, the present value of the cash flow stream is?
An investor who requires a 10% rate of return on an investment of this type, is willing to pay_________today for this investment?
Empirical research on CAPM indicates that: Beta is an accurate predictor of a portfolio's future volatility.
Using the Du Pont Identity Y3K, Inc., has sales of $4,800, total assets of $2,685, and a debt-equity ratio of 1.20. If its return on equity is 16 percent, what is its net income?
Tinker's Bells has sales of $27 million, total assets of $19 million, and total debt of $6.4 million. If the profit margin is 8 percent, what is net income? What is ROA? What is ROE?
The market is expected to rise over the coming year. For a stock with a Beta of -0.8 : the expected value of the stock's rate of return will exceed the market rate of return in the coming year.
At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars). On the basis of this information, what will be the forecast for Robert's year-end net income?
If Homer reports net income of $2,000,000 and it follows a residual dividend payout policy, what will be its divident payout ratio?
Project L costs $52,125, its expected net cash inflows are $12,000 per year for 8 years and its WACC is 12 percent. What is the project's NPV? What is the project's discounted payback?
The Rangoon Timber Company has the following ratios: Sales/Total assets = 2.23; ROA = 9.69%; ROE = 16.4%What are Rangoon's profit margin and debt ratio?
The Pawlonia Tree Company has an ROA of 12 percent, a 7 percent profit margin, and an ROE of 17 percent. What is the company's total asset turnover? What is the equity multiplier?
Smith believes it could issue new bonds at par that would provide a smiliar yield to maturity. If its marginal tax rate is 35 percent, what is Smith's after-tax cost of debt?
The Printing Company stock is selling for $32.60 a share based on a 14 percent rate of return. What is the amount of the next annual dividend if the dividends are increasing by 2.5 percent annually