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U.S. T-bill = 8%, 5-year U.S. T-note = 7%, IBM common stock = 15%, IBM AAA Corporate Bond = 12% and 10-year. Based on information, shape of yield curve
The greater the uncertainty of the future, the greater the need for alternative scenarios in projecting future cash flows.
A toxic spill results in a lawsuit and potential fines, and the beta of the stock jumps to 1.6. The new equilibrium price of the stock
Assuming that the shares can be repurchased at the price that existed prior to the recapitalization, what would be the share price following recapitalization?
The CAPM applies to the emerging market index, use the information in previous question to compute the beta and risk premium for emerging market index.
Calculate how much the swap value right now for the fixed payment side.
Describe the competitive forces in the industry including the company's relative advantages and disadvantages to its competitors
1) Prepare the appropriate journal entries for fiscal 2007. 2) Assume the marina operator is unsophisticated in business.
A. Find the present values of the following cash flow streams at 8% compounded annually. B. What are the PVs of the streams at 0% compounded annually?
What are three key inputs to the valuation model? How would you determine the valuation of an asset?
A firm offers terms of 2/15, net 48. What effective annual interest rate does the firm earn when a customer does not take the discount?
Applicable tax rate for the company is 38%. Q1. Calculate TCM's free cash flows (FCF) for 2007 and 2008
Fee Founders has perpetual preferred stock outstanding that sells for $60 a share and pays a dividend of $5 at end of each year. What is required rate of return
The pricing objective of maximizing profits: To stay in business, a company must have a selling price that is:
What role does a finance department play in valuing business opportunities (both internal such as projects and external such as acquisitions)?
Prepare a valuation of Rondo's securities using the methods demonstrated.
Case Scenario: The riskiness of an investment project is defined as the variability of its cash flows.
What is the discounted payback period, assuming that the required cost of capital is 10 percent?
The beta is .75, the market risk premium is 8% and the risk-free rate is 4%. What is the expected return of Transatlantic?
Use decision tree analysis to recommend a production schedule and decide whether to publish the book.
In general, what effect would the use of MACRS depreciation by the bank have on the rate of return it earns from the lease?
The store has a marginal tax rate of 30%. What is the operating cash flow of the project using the tax shield approach?
Treasury bonds with 5-year maturities offered a return about 8.65%; face value of $1,200; and 7.25% coupon rate. What would be the present value of bond?
What is your personal discount rate or rate of preferences? I.e. how much would you pay for a promise of $1000 to be received one year from now?
Explain why comprehending and managing cash flow is important for financial success.