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Solomon, Inc. has net sales of $745,100 and costs of $590,800. The depreciation expense is $82,600 and the interest paid is $15,500. What is the amount of the firm's operating cash flow if the tax r
The Friend Corporation issued $100 par value preferred stock 10 years ago. The stock provided an 8% yield at the time of issue. The preferred stock is now selling for $75. What is theh current yield
An additional lump sum payment of $13,500 at the end of the 5th year. What is the expected rate of return on this investment?
Medical Equipment Co. can issue preferred stock for $80 with an estimated floatation cost of $3. It is anticipated that the preferred stock will pay $6 per share in dividends. Compute the cost of pr
Suppose a State of California bond will pay $1,000 eight years from now. If the going interest rate on these 8-year bonds is 7.3%, how much is the bond worth today?
A magazine subscription is running out and you can renew it by sending $10 a year. How many years would you have to live to make the lifetime subscription the better buy?
An investment costs $500 and is expected to produce cash flows of $50 at the end of year 1. What rate of return would you earn if you bought this investment?
Douglass, Inc. has sales of $132,000, costs of $103,000, depreciation expense of $11,000, and interest paid of $4,100. The tax rate is 34 percent. How much net income did Douglass, Inc. earn for the
You just deposited $5,000 in a bank account that pays a 12% nominal interest rate, compounded monthly. How much will be in the account three years (36 months) from now?
If output rises to 64,000 units, what will the percentage change in operating cash flow be? Will the new level of operating leverage be higher or lower? Explain.
Stock A has an expected return of 12.45% and the portfolio has an expected return of 13.25%. Given this information, estimate the expected return of Stock B.
If one of the stocks has a beta of 1.05 and the total portfolio is equally as risky as the market, the beta for the other stock in your portfolio is?
What is the expected return of each stock? Calculate the variance and standard deviation for Stocks A and B.
What is the value of a 9-month call with a strike price of $45 given the Black-Scholes Option Pricing Model and the following information?
Earnhardt Driving School's 2010 balance sheet showed net fixed assets of $3.4 million, and the 2011 balance sheet showed net fixed assets of $4.2 million. The company's 2011 income statement showed
What would the annual percentage yeild for a savings account that earned $56 in interest on $800 over the past 365 days?
The firm can borrow at 9 %. If the corporate tax rate is 35 %, what is the value of the firm? What will the value be if Old School converts to 50 % debt?
Maxwell Industries has a debt-equity ratio of 1.5. Its WACC is 11 %, and its cost of debt is 8 %. What is Maxwell's unlevered cost of equity capital?
If the current market value of the equity is $ 25 million and there are no taxes, what is EBIT? Suppose the corporate tax rate is 35 %. What is EBIT in this case? What is the WACC? Explain.
A zero coupon bond matures in 5 years. The market interest for the bond is 10%. Suppose that the price of this zero is $700. What is the market interest rate implied here?
Alabama power company preferred stock with a 50 par value and a dividend of 2.8125 per year. What is the value of the preferred stock?
What is the risk premium on the market assuming CAPM is true? Using this information, what is the rate of return on the market?
If John is investing $200,000, then what is the dollar range of returns that John can have with 90 percent confidence at the end of the year?
Kevin purchased a stock a year ago that pays a dividend. He has earned a 50%. The stock was purchased for $16 and is now worth $21. What is the amount of dividends received during the year?
Each pie sells for $12.50 each. The firm expects to sell 400,000 pies annually. What is the break even point in the pies?