• Q : Representing an after-tax risk premium....
    Finance Basics :

    The corporate investors require an after-tax return on the preferred that exceeds their after-tax return on the bonds by 1.0%, which would represent an after-tax risk premium. What coupon rate must

  • Q : Paid-in capital in excess of par value-preferred stock....
    Finance Basics :

    The entry to record the transaction will consist of a debit to Cash for $600,000 and a credit or credits to 1) preferred stock for $600,000. 2) preferred stock for $500,000 and Paid-in capital in exce

  • Q : What is the conversion value of the bond....
    Finance Basics :

    Orient Airlines' common stock currently sells for $33, and its 8% convertible debentures (issued at par, or $1,000) sell for $850. Each debenture can be converted into 25 shares of common stock at a

  • Q : What factors determine the value of stock....
    Finance Basics :

    Problem: What factors determine the value of stock? What do you think is the most important factor and why?

  • Q : Goal of wealth maximization....
    Finance Basics :

    Problem: Describe the 10 basic principles of finance. how does these principles relate to the goal of wealth maximization.

  • Q : What is interfaces product....
    Finance Basics :

    Then go to the part of the company's website about its efforts toward sustainable development at What is Interface's product?

  • Q : Standard devaiation of expected returns....
    Finance Basics :

    1) Calculate the expected rate of return r^y1 for stock Y (r^x = 12%) 2) Calculate the standard devaiation of expected returns ax for stock x (ay = 20.35%)

  • Q : Extraordinary items for external reporting purposes....
    Finance Basics :

    Q1. Are the items above extraordinary items for external reporting purposes? Discuss. aQ2. Show how the extraordinary items section of the income statement should have been reported (the tax rate is 3

  • Q : Banks offer and the investment....
    Finance Basics :

    Question 1: How much ahead will Joe be if he takes the bank's offer and the investment does turn out to yield 18%?

  • Q : Prepare the bank reconciliation....
    Finance Basics :

    During October, he recorded a $290 check for the salary of a part-time employee by debiting Salary Expense and crediting Cash for $29. Nicosia's Cash account shows an October 31 cash balance of $5,1

  • Q : Evaluate wal-marts diversification....
    Finance Basics :

    Problem 1: Construct a comparison of Wal-Mart's and the industry's income statements around 1990 and quantify Wal-Mart's advantages. Problem 2: Evaluate Wal-Mart's diversification into Sam's Clubs an

  • Q : Strategies for testing internal controls....
    Finance Basics :

    A) Briefly describe three strategies for testing internal controls when information technology is used for significant accounting processing.

  • Q : Determine earnings per share on common stock....
    Finance Basics :

    Determine the earnings per share of common stock, assuming income before bond interest and income tax is $400,000. What is the earnings per share on common stock for plan 1 and plan 2

  • Q : Compute the coefficients of the variation....
    Finance Basics :

    Q1. Why should the coefficient of the variation be used to compare the dispersion in the prices? Q2. Compute the coefficients of the variation. What is your conclusion?

  • Q : Expect analysts forecasts for a company....
    Finance Basics :

    Problem: In general, do you expect analysts' forecasts for a company like KKD to be optimistic, pessimistic or unbiased? Why?

  • Q : What is the expected value of xyz sales for coming year....
    Finance Basics :

    Weather forecasters project that the probability of an unseasonably hot summer is 30% and an unseasonably cool summer is 25%. What is the expected value of XYZ's sales for the coming year?

  • Q : What is each bond worth today....
    Finance Basics :

    Q1. What is each bond worth today? (No calculations should be necessary.) Q2. If interest rates were to rise to 12% today, estimate without making any calculations what each bond would be worth.

  • Q : Annual renewal of memberships and payment of fees....
    Finance Basics :

    Once the plan is implemented, annual renewal of memberships and payment of fees would take place as each individual or family membership expires.

  • Q : Inverse demand equation....
    Finance Basics :

    The Stafford coal seam contains 25,000 tons of coal. It costs $100 per ton to extract the coal and deliver it to the market. (This is a constant marginal cost). The demand for coal can be represente

  • Q : What would be the payback period....
    Finance Basics :

    Problem: Jenark Inc. project has the following cash follow: What would be the payback period?

  • Q : Reconciling analyst views....
    Finance Basics :

    You are a junior analyst at a well-known mutual fund company (i.e., a buy-side analyst) and are assigned to value, say, the stock of General Electric. You look around at what famous analysts have wr

  • Q : Firm remains unhedged for gold prices....
    Finance Basics :

    Q1. What will be total revenues if the firm remains unhedged for gold prices of $280, $300, and $320 an ounce?

  • Q : Annual rate of return on the investment....
    Finance Basics :

    Estimate the value of the new venture at the end of year 5. Estimate the present value of the venture at the end of year 0 if the venture capitalist wants a 40 percent annual rate of return on the i

  • Q : Estimate the value of a privately-held firm....
    Finance Basics :

    Estimate the value of a privately-held firm based on the following information: total market value (or capitalization value) of a comparable firm = $200,000; net income of a comparable firm = $40,00

  • Q : Investing in long-term corporate bonds....
    Finance Basics :

    You have just purchased shares in the Hi-Tech Long-Term Bond Fund, a mutual fund that invests in long-term corporate bonds. Your purchase constitutes

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