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The Evanec Company's next expected dividend is $2.93; its growth rate is 6.42%; its common stock now sells for $36.34. What is Evanec's cost of retained earnings (existing equity), rs?
If the firm intends to issue new shares to finance the project, how many shares must the firm issue?
Pierre dupont just received a gift from his grandfather. He plans to invest in a five year bond issued by venice corp that pays annual coupons of 5.5 percent. If the current market rate is 7.25 perc
You decide on the alpha to be used for exponential smoothing. For time series regression, use the data for all four fiscal years. Which forecast will you use? Why?
Common stock A has an expected return of 10%, a standard deviation of future returns of 25%, and a beta of 1.25. Common stock B has an expected return of 12%, a standard deviation of future returns
At year-end 2011, total assets for Harley Davidson Inc. were $1.9 million and accounts payable were $340,000. Sales, which in 2011 were $2.5 million, are expected to increase by 20% in 2012.
Now you are approached by Studebaker Capital Corp., which proposes a fixed-price contract to supply raw materials at $10 million per year for 10 years.
Bret thinks that Medtrans will begin paying a dividend in four years, that the dividend will be $1.00, and that it will grow at 4% annually. James and Bret agree that the required return for Medtran
You are considering an annuity which costs $160,000 today. The annuity pays $18,126 a year at an annual interest rate of 7.50 percent. What is the length of the annuity time period?
The firm does far better than expected and bondholders receive all of the promised interest and principal payments. What is the realized return on your investment?
You have made regular monthly payments and periodic repairs that have kept the book value of your home at $200,000. Assuming the home is your only asset, what is your book debt-asset ratio?
The enterprise-value-to-EBITDA ratio is higher for Firm E than for Firm F. If both firms are in the same industry, which of the following explanations is (are) plausible?
Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown
Thatcher Corporation's bonds will mature in 12 years. The bonds have a face value of $1,000 and an 11.5% coupon rate, paid semiannually. The price of the bonds is $1,050. The bonds are callable in 5
A Treasury bond that matures in 10 years has a yield of 3%. A 10-year corporate bond has a yield of 10%. Assume that the liquidity premium on the corporate bond is 0.6%. What is the default risk pre
By how much does the required return on the riskier stock exceed the required return on the riskier stock exceed that on the less risky stock? Round your answer to two decimal places.
The portfolio's beta is 1.15. Now, suppose you sell one of the stocks with a beta of 1.0 for $7,500 and use the proceeds to buy another stock whose beta is 1.55. Calculate your portfolio's new beta.
The following information is available in general and about investments in stocks J and K.
A firm is planning to lower its ACP by ten days next year. Receivables are currently $15M on credit sales of $120M Credit sales are expected to grow by 20% next year. Calculate next year's ending re
Analyze the process of forecasting financial statements and make at least one recommendation for improving the accuracy of forecasts.
What are the major constants in designing the optimal merchandise mix?
A firm has targeted a 20% growth in sales this year. Last year's cash as a percent of sales was 10%, accounts receivable 30%, and inventory 25%. What percentage growth in current liabilities is requ
Given the estimated sales forecast and the estimated relationship between inventories and sales, what are your forecasts of the company's year-end inventory level? Round your answer to the nearest h
The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2.6 million and net plant and equipment equals $2.1 million.
Calculate Brauer's profit margin assuming the firm uses only debt and common equity. Round your answer to two decimal places.