• 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

  • Q : What is your monthly payment....
    Finance Basics :

    Question: You buy a house for $500,000 and put 20% down payment. You get a 30 year fixed rate mortgage at 6.2% . Question 1: What is your monthly payment?

  • Q : Growth and success in adjacent businesses....
    Finance Basics :

    How has the software market been volatile in the United States? In what ways? Can you find examples of Microsoft's foundation for growth and success in adjacent businesses?

  • Q : What is xyz expected return....
    Finance Basics :

    XYZ Inc.'s stock has a 50% chance of producing a 30% return, a 25% chance of producing a 9% return, and a 25% chance of producing a -25% return. What is XYZ's expected return?

  • Q : Desired required rate of return....
    Finance Basics :

    The manager expects to receive an additional $5.0 million which she plans to invest in a number of stocks. After investing the additional funds, he wants the fund's required return to be 13.00%. Wha

  • Q : What is the slope of the best feasible cal....
    Finance Basics :

    Given an optimal risky portfolio with expected return of 14% and standard deviation of 22% and a risk free rate of 6%, what is the slope of the best feasible CAL?

  • Q : Discuss margin buying of common stocks....
    Finance Basics :

    Discuss margin buying of common stocks. Include in your discussion the advantages and disadvantages, the types of margin requirements, how these requirements are met, and who determines these requir

  • Q : Exploiting the opportunity-market inefficiency....
    Finance Basics :

    Problem: If a stock is incorrectly priced by $0.05 and it costs $0.25 to exploit the opportunity, is the market inefficient?

  • Q : Stock price problem....
    Finance Basics :

    Problem: Garrett Corp. has been going through a difficult financial period. Over the past three year, its stock price has dropped from $50 to $18 per share.

  • Q : What is the current value of preferred stock....
    Finance Basics :

    What was the orginal issue price and what is the current value of this preferred stock?

  • Q : Calculate the current price per share for the stock....
    Finance Basics :

    FastGrow is a no growth firm and has 2 million shares outstanding. It is expected to earn a constant $20 million per year. If all earnings are paid out as dividends and the cost of capital is 10%, c

  • Q : What is the per-share stock price....
    Finance Basics :

    (a) What is the per-share stock price if the firm does not undertake the new investment? (b) What is the per-share present value of the investment?

  • Q : Compare your column of principal balances....
    Finance Basics :

    Compare your column of principal balances with the car's value after each month. What do you notice when you do the comparison month after month?

  • Q : Markets in equilibrium....
    Finance Basics :

    Problem: For markets to be in equilibrium (that is, for there to be no strong pressure for prices to depart from their current levels),

  • Q : Distributors in terms of stock availability....
    Finance Basics :

    What level of customer service is Trader Joe's providing to its distributors in terms of stock availability? What's their average inventory of frozen organic chocolate waffles?

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