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A company has a beta of 1.75. If the market return is expected to be 18.0 percent and the risk-free rate is 6.00 percent, what is the company's risk premium?
A bond issued 10 years ago has a coupon rate of 8% and a face value of $1,000. The bond will mature in 15 years. What is the value to an investor with a required return of 12.5%?
Bonds outstanding that pay a 5% semiannual coupon, have a 5.5% yield-to-maturity, and a face value of $1,000. The current rate of inflation is 4%. What is the real rate of return on these bonds?
Business During the month of July, a home improvement store sold a great many air-conditioning units, but some were returned. The following table shows the probability distribution for the daily num
You are considering a project with an initial cash outlay of $80000 adn expected free cash flows of $20000 at the end of each year for 6 years. The required rate of return for this project is 10%.
Bonds comprise 74% of total long-term debt, what would be the average cost of the term loans if the weighted average after-tax cost of debt is 4.578%?
Cindy and Max have a 300,000 home loan for 30 years at nominal interest rate 7.2% convertible monthly. Find their monthly payment.
Casino Games Company preferred stock pays a perpetual annual dividend of 3.5% of its par value. If investors' required rate of return on this stock is 11%, what is the value per share?
Lamar could have issued bonds without warrants attached with a 15% coupon rate. What is the implied value of each warrant?
Assuming the following ratios are constantm, what is the sustainable growth rate?
Champagne, Inc., had revenues of $12 million cash operating expenses of $8 million, and depreciation and amortization of $1.5 millionn during 2008. The firm purchase $700,000 of equipment during th
Current liabilities are $900, sales are $5,320, profit margin is 9.4 percent, and ROE is 18.2 percent. What is the amount of the firm's net assets?
The bond has a 6.50% nominal yield to maturity but it can be called in 6 years at a price of $1,120. What is the bond's nominal yield?
A company bonds are currenlty selling for $1,157.75 per $1000 par-value bond. The bonds have a 10% coupon rate and will mature in 10 years. What is the approx. yiled to maturity?
A company's current stock price is $85.10 and it is likely to pay a $4.10 dividend next year. Since analysts estimate the company will have a 12% growth rate, what is its expected return?
What is the Dollar Sales volume to reach the break-even point. What is the degree of operating leverage for a production and sales level of 5,000 units.
What is the Economic Order Quantity? Using the data from above, assume that Company Products operates 250 days per year and its total usage is 1,100 units per year. The lead time is 2 days and Compa
Their nominal yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $975. What is the bond's nominal coupon interest rate?
What is the monthly payment for a $150,000 home with a 7% fixed annual interest rate for a 30 year note?
Diane Carter is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 7.27 percent. Assume annual c
What happens to the future value of an annuity if you increase the rate r? What happens to the present value?
Consider two firms, With and Without, that have identical assets that generate identical cash flows. Without is an all-equity firm, with 1 million shares outstanding that trade for a price of $24 p
Operating cash flows rather than accouting income are listed. Why do we focus on cash flows as opposed to net income in capital budgeting?
In capital budgeting, should we recognize this fact by estimating daily project cash flows and then using them in the analysis? If we do not, are our results biased? If so,would the NPV be biased
Cite and briefly discuss six factors that can be especially difficult to quantify for inclusion in a capital budgeting NPV calculation.