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The security's liquidity risk premium is .25 percent and maturity risk premium is .85 percent. The security has no special covenants. Calculate the security's default risk premium.
New York: £1 = $1.6895 Euro 1 = $1.1797 Frankfurt: £1 = Euro 1.4629. Do you see any arbitrage opportunities? If so, what transactions should the United States arbitrageur undertake?
How do investment bankers generate enthusiasm among investors for initial public offerings? How would you go about accomplishing this?
Assuming that the market price of the firm's stock is $95, and flotation costs are 10 percent of the market price, how many shares would have to be issued?
Describe and compare the three (3) most important factors that affect the forecasting of interest rates.
What are the MIRR's advantages and disadvantages vis-A?-vis the NPV?
Evaluate the effect of interest rates in foreign countries and the rate of exchange with foreign currencies on investment in the United States.
Discuss the various financial instruments and the impact of speculation on availability of funding for companies.
Which of the following methods of evaluating investment projects can properly evaluate projects of unequal lives?
A semi annually compounded yield of 3.5985% offered,coupons are paid semi annually, how do you calculate the bond's price?
What are the differences between cash flows used in capital budgeting calculations and past accounting earnings?
According to the pecking order theory, if additional external financing is required, what type of securities should a firm issue first? Last?
The city street corporation's common stock has a beta 1.2. If the risk-free rate is 4.5 percent and the expected return on the market is 13 percent, what is the company's cost of equity capital?
Assume the following capital proportions and costs for Alpha company. Assuming Alpha's marginal tax rate is 34%, calculate its WACC.
What is the present value of the following future amount? $2,000 to be received 7 years from now discounted back to the present at 7%.
A company has a project that costs $10,000. Assume a cost of capital of 10 percent and the following cash flow stream. What is the project's MIRR?
Assuming that the project is new information that it is independent of other expectations about the company,, what is the effect of the new project on the value of the stock?
Stone's Stones and Rocks buys on terms of 2/10, net 30 from its suppliers. If it pays on the 8th day, taking the discount, what is the percent cost of the trade credit that it receives?
The Pawlonia Tree Company has an ROA of 12 percent, a 7 percent profit margin, and an ROE of 17 percent. What is the company's total asset turnover? What is the equity multiplier?
500 stock market index is 13%, and the stock of Joe's Junkyard has a Beta of 1.4. Given these conditions what is the required rate of return for Joe's stock?
What is a firm's fundamental, or intrinsic, value? What might cause a firm's intrinsic value to be different than its actual market value?
Your firm plans to borrow money at an interest rate of 14%, before-tax. If your firm's effective tax rate is 40%, what is the aftertax cost in percent of the new loan?
What is the equation for ROA in the DuPont system, and how do the factors in that equation influence the ratio?
Consider the following condensed Income Statement: If COGS is assumed to vary directly with sales, then Gross Profit for 2005 will be?
Vigo Vacations has an equity multiplier of 2.5. The company's assets are financed with some combination of long-term debt and common equity. What is the company's debt ratio?