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What is the contribution margin calculated on a variable-costing income statement? What is the ending inventory figure for the period assuming they adopt absorption-costing?
Beckham Corporation has semiannual bonds outstanding with 13 years to maturity and are currently priced at $746.16. If the bonds have a coupon rate of 8.5 percent, then what is the after-tax cost of
The cost of equity: Radical IvenOil, Inc., has a cost of equity capital equal to 22.8 percent. If the risk-free rate of return is 10 percent and the expected return on the market is 18 percent, then
Price of my stock is currently a 100 dollars a share while dividends are at 5 dollars per share. There remains a constant growth of 7 percent a yr.
Starr, Co. is considering a five-year project that has an initial after-tax outlay of $250,000. The respective future cash inflows from its project for years 1, 2, 3, 4 and 5 are: $5,000, $5,000, $1
The risk free rate of return is 2.5% and the market risk premium is 8%. Penn Trucking has a beta of 2.2 and a standard deviation of returns of 28%. Penn Trucking's marginal tax rate is 35%.
Jpix management is considering a stock split. JPix currently sells for $120 per share and a 3- for -2 stock split is contemplated. What will be the company's stock price following the stock split,
The price of Garner stock is $40. There is a call option on Garner stock that is at the money with a premium of $2.00. There is a put option on Garner stock that is at the money with a premium of $1
Hedging Interest Rate Risk- Assume a savings institution has a large amount of fixed-rate mortgages and obtains most of its funds from short-term deposits.
Describe a call option on interest rate futures. How does it differ from purchasing a futures contract? Describe a put option on interest rate futures. How does it differ from selling a futures contra
Hedging with Put Options- Why would a financial institution holding the stock of Hinton Co. consider buying a put option on that stock rather than simply selling it?
Leverage of Options- How can financial institutions with stock portfolios use stock options when they expect stock prices to rise substantially but do not yet have sufficient funds to purchase more
Describe some specific techniques that can be used to lessen the person's reluctance, thereby reducing the need for a third party to intervene and manage negotiations.
Atlas Corp. wants to raise $4 million via a rights offering. The company currently has 450,000 shares of common stock outstanding that sell for $40 per share.
You expect Company XYZ stock prices to decrease below the current stock price level of $50. In order to take advantage of this expectation, you purchase a put option on Company XYZs stock, with an e
Hampton Corp. is considering two mutually exclusive projects. Both require an initial investment of $10,000 at t=0. Project X has an expected life of 2 years with after-tax cash inflow of $6,000 and
How aggressively should corporations seek to avoid taxes? Is it morally acceptable to set up legal and financial structures for the sole purpose of avoiding taxes? How can we distinguish between ta
If you have time, next time you go to a medical facility or any other service place that requires you to sign a contract, read the contract before you sign it.
OXO pricing strategy. Given OXOs competitive environment, do you think they are priced right or would you recommend changes to their pricing strategy? What would you recommend and why?
Last year Vagabond Veggie's had an ROE of 18%. The net profit margin was 8% with a Total Asset Turnover of 1.75. What is the firm Equity multiplier and find the total debt ratio knowing the equity
What is organizational politics all about? Why do people tend to see organizational politics as negative? Could an organization really exist without organizational politics?
What is the maximum monthly charge Cookie Cutter should pay for this lockbox system if the payment is due at the beginning of the month?
Your investment bankers have determined that the stock should be offered at a price of $50 per share and that you should anticipate paying a dividend of $1 per share in one year.
ABC Corporation is considering an expansion project. To date they have spent $150,000 investigating the viability of the project and have decided to proceed.
Your firm has an avarage collection period of 33 days. Current practice is to factor all receivables immediately at a 1.40 percent discount. What is the effective cost of borrowing in this case?