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From the corporate financial officer's viewpoint, which of the following is not an advantage of issuing convertible debentures?
An investor receives a 15% total return by purchasing a stock for $40 and selling it after one year with a 5% capital gain. How much was received in dividend income during the year?
The project requires a $7000 working capital investment in year 0 and another $5000 in year 5. The company's marginal tax rate is 40%. Calculate the expected total(operating plus terminal) cash flow
How much would you need to invest to get a return of $1.00 from an investment with a price per share of $36 with earnings per share of $1.80?
Net working capital for the PDAs will be 20 per- cent of sales and will occur with the timing of the cash flows for the year (i.e., there is no initial outlay for NWC).
Alabaster Incorporated has an equtiy cost of capital of 14%. The debt to value ratio is .6, the tax rate is 35%, and the cost of debt is 8%. What is the cost of equity if Alabaster was unlevered?
A project requires buying a $30,000 equipment, which will be depreciated straight-line to zero over its 5-year life. The project also requires an immediate increase in net working capital of $4,000,
Can the company maintain its current capital structure, maintain the $3.00 DPS, and maintain a $10 million capital budget without having to raise new common stock?
LEE Corporation intends to purchase equipment for $1,000,000. The equipment has a 5 year useful life and will be depreciated on a straight-line basis to a salvage value of $250,000.
A friend has decided to start a new business, and has asked you to assist him. His primary concern is what type of entity to use for the business: sole proprietorship, Partnership, S Corporation or
Prestopino Corporation produces motorcycle batteries. Prestopino turns out 1,900 batteries a day at a cost of $6 per battery for materials and labor.
Mad inc. has a capital structure consisting of 30 percent debt and 70 percent common equity financing. The company has $400 million in net income and plans to pay out 47.5 percent of their net incom
Assume your firm is zero-growth and pays all its net income in dividends each year Also assume your firm can borrow money when it needs to at an interest rate of 7%. Currently your firm's cost of
Jack's Construction Co. has 100,000 bonds outstanding that are selling at par value. The bonds yield 10.1 percent. The company also has 4.6 million shares of common stock outstanding.
Kelley wants to purchase shares in Classic Kars, Inc., but is torn between buying shares of common stock or shares of preferred stock. What should he consider before determining the type of share h
Last year Brenmar Sales Company has a gross profit margin of 30% and sales of $9million. 75% of the company's sales on credit and the remainder 25% is in cash sales.
The Taylor corporation is using a machine that originally cost $88,000. The machine is being depreciated by the straight-line method over 8 years ($11,000 per year) and has 4 years of depreciation r
You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 17 percent.
A company purchased $25,000 worth of inventory. The terms of sale were 2/5, net 45. What's the implicit interest if a buyer does not take the cash discount?
A company has after-tax earnings of $39,400 for the year. The firm adheres to a residual dividend policy with a debt-equity ratio of 0.7. The firm needs $56,300 for new investments. What is the amo
Based on the information in the question above, what will be the total value of your holdings of Berkshire Hathaway stock after the stock split?
If you have 1 share of Berkshire Hathaway Inc. (BRKa). The stock is traded at $173,000. We assume that the firm will announce 1000:1 stock split. What's total number of share you will have after th
A company is considering a new inventory system that will cost $120,000. The system is expected to generate positive cash flows over the next four years in the amounts of $35,000 in year one, $55,00