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You've observed the following returns on Yasmin Corporation's stock over the past five years: 5 percent, -8 percent, 28 percent, 17 percent and 13 percent. Calculate the variance.
What is the weight of the preferred stock as it relates to the firm's weighted average cost of capital?
Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return is 12%. What is the best estimate of t
Property insurance on the building is $9,000 per year and will not change because of the new activity. How much of the insurance premium should be allocated to the new product line?
If Do=$2.25, g (which is constant) = 3.5% and Po=$78, what is the stocks expected divident yield for the coming year?
The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return?
The firms Class Ann bonds have the same risk,maturity, nominal interest rate, and par value, but these bonds pay interest annually. Neither bond is callable. At what price should the annual payment
Frazier Fudge has a project with an initial outlay of $40,000, followed by three years of annual incremental cash flows of $35,000. The terminal cash flow of the project is $10,000. Assuming a cost
Assume that the appropriate discount rate is 10% and that the firm's tax rate is 40%. What is the project's discounted payback period?
Tucker Corporation is planning to issue new 20-year bonds. The current plan is to make the bonds noncallable, but this may be changed. If the bonds are made callable after 5 years at a 5% call premi
An offering of 699,029 shares will be sold at $15.45 to provide approximatey 10.8 million. What dollar return on the net proceeds of the offering must be earned to bring earnings per share up to 1.0
A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital 12 %. What is the project's IRR? and What is the project's PI?
Suppose that the current value of a certain asset is $45000. The annual effective rate of interest is 4.5%. You are offered a 2 year long forward contract at a forward price of $50000. How much woul
The current price of a share of stock is 5, and the stock is expected to pay a dividend of 1 per share in 2 months and again in 5 months. The risk free annual effective rate of interest is 6%.
Find the prepaid forward price and the forward price of a 30 month forward contract for a stock currently priced at $36, assuming that the risk free rate is 4% compounded continuously and that divid
If a banker's spread is 6.5% of the total issue size, with $60,000 out-of-pocket exp, what is the total issue size necessary to yield 10 million in cash? Use formula.
The price of a nine month forward contract on one share of this stock is $47.56. Is there an arbitrage opportunity on the forward contract? If so, describe the strategy to realize profit and find th
The corporate tax rate is 30 percent. What is the weighted average flotation cost?
Central Systems, Inc. desires a weighted average cost of capital of 8 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 11 percent. What debt-equity ratio is neede
The accounting manager of Gateway Inns has noted that every time the inn's average occupancy rate increases by 3 percent, the operating cash flow increases by 7.11. What is the degree of operating l
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 33 percent, what is the aftertax
Flotation costs for issuing new common stock are 8 percent, for new preferred stock, 7 percent, and for new debt, 4 percent. What is the true initial cost figure Southern should use when evaluating
What is the accounting break-even level of revenues for a firm with $6 million in sales, variable costs of $3.9 million, fixed costs of $1.2 million, and depreciation of $1 million?
ABC Service can purchase a new assembler for $15,052 that will provide an annual net cash flow of $6,000 per year for five years. Calculate the NPV of the assembler if the required rate of return is
What is the appropriate discount rate to use in evaluating the acquisition? Explain clearly and concisely why this is the appropriate discount rate.