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Corporate bonds have a 0.25% liquidity premium versus a zero liquidity premium for T-bonds, and the maturity risk premium on both Treasury and corporate 10-year bonds is 1.15%.
In two years Rocky plans to enroll in college. If the current tuition is $23,500 per yer and is expected to increase at a rate of 6% per year, how much will Rocky pay in tuition his first year of s
What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 9% of par, and a current market price of (a) $52, (b) $86, (c) $96, and (d) $147? R
Assume now that the recap increases total firm cash flows, which adds $100 million to the value of the firm. Now what is the market value of the firm? What is the market value of the equity?
Historically high return stocks have exhibited lower risk than low return stocks....just the opposite what the SML (Security Market Line) predicts.
If Stock A had a price of $120 at the beginning of the year, $150 at the end of the year and paid a $6 dividend during the year, what would be the annualized holding period return?
An investment project requires a net investment of $100,000. The project is expected to generate annual net cash flows of $28,000 for the next 5 years. The firm's cost of capital is 12%.
You are offered an investment that will make you three payments of $ 5,000 each. These payments would occur from now at the end of 4th, 5th, and 6th year respectively. If you can re-invest it @11%,
Morningside nursing home,a not-for profit corporation,is estimating its corporate cost of capital.Its tax-exempt debt currently requires an interest rate of 6.2
You want to have $80,000 in your savings account 11 years from now, and you're prepared to make equal annual deposits into the account at the end of each year.
At year-end 2013, Wallace Landscaping's total assets were $2.17 million and its accounts payable were $560,000. Sales, which in 2013 were $3.5 million, are expected to increase by 35% in 2014.
A company has $100,000 invested in a 2 stock portfolio. $35,000 is invested in Stock A and the remaining is invested in Stock B. A's beta is 1.50 and B's beta is 0.07. what is the portfolios beta?
Robert and Rebecca finalized their divorce last year. Under a Divorce Agreement entered by the Court as part of their final divorce, Rebecca was required to pay Robert $ 60,000 last year, $ 30,000 t
At the beginning of the year, you bought a $1,000 par value corporate bond with a 6 percent annual coupon rate and a 10-year maturity date.
Calculate Midland's corporate WACC. Be prepared to defend your specific assumptions about the various inputs to the calculations. Is Midland's choice of EMRP appropriate? If not, what recommendation
Houma Bio-Control has hired you as a consultant to assess the economic feasibility of investing $2,500,000 to purchase a fully operational toad ranch.
The Board for Colton Industries is considering a proposal by the CEO to sell the firm's boat manufacturing division. An anonymous buyer has offered through a business broker to purchase the boat di
A firm has the following balance sheet: Cash $ 200 Accounts payable $ 200 Accounts receivable 200 Notes payable 400 Inventory 200 Long-term debt 800 Fixed assets 1,800 Common stock 8
Lat year the Bulls Business Bureau retained $400,000 of the 1 million net income it generated. This year BBB generated net income equal to $1.2 million.
vA firm has dividends forecast to be $3.00 and $3.20 at the end of the next two years. Analysts also project its stock price in 2 years to be $55.
Pat's twins, Sherry and Katie, finished their first year of school at an accredited university in 2013. She paid $9,000 in qualified educational expenses for Sherry and $3,000 of qualifying expenses
Tangier Manufacturing's common stock has a beta of 1.8. If the expected risk free return is 5% and the expected return on the market is 16%, what is the expected return on Tangier's stock?
Kay corporation 5-year bonds yield 6.20% and 5-year T-bond yield 4.40%. The real risk rate is r*=2.5% the inflation premium for 5-years bonds is IP= 1.50%, the default risk premium for Kay's bond