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The firm's marginal tax rate is 34 percent and its required rate of return is 12%. What is the net incremental tax cash flow?
An asset cost $200,000 and is classified as a 10-year asset. What is the annual depreciation expense for the first three years under the straightline and the modified accelerated cost recovery syste
A stock has an expected return of 13.5 percent, a beta of 1.40, and the expected return on the market is 11.5 percent. What must the risk-free rate be? (Do not round intermediate calculations and ro
The price of the stock subsequently fell to $38 before rising to $49 at which time Graham covered the position that is closed the short position. What was the percentage gain or loss on the investme
You purchase 100 shares for $50 a share ($5000), and after a year the price rises to $60. what will be the percentage return on your investment if you bought the stock on margin and the margin requi
which is heavily weighted in stocks that pay substantial dividends. Which of the following dividend policies would you prefer?
Investment Forecasted Returns for Boom Economy Forecasted Returns for Stable Growth Economy Forecasted Returns for Stagnant Economy Forecasted Returns for Recession Economy Stock 23% 10% 7% -11% Cor
The stock of Big Joe's has a beta of 1.50 and an expected return of 12.60 percent. The risk-free rate of return is 5.1 percent. What is the expected return on the market?
The 12-month, 15-month, 18-month zero rates are 4.5%, 4.6%, 4.7% with continuous compounding. What is the value of an FRA that enables the holder to earn 5.6% (with semiannual compounding) for a 3-m
The Lo Sun Corporation offers a 5.3 percent bond with a current market price of $858.50. The yield to maturity is 6.29 percent. The face value is $1,000. Interest is paid semiannually. How many year
The U.S. Treasury bill is yielding 6 percent and the market risk premium is 9 percent. Jack's tax rate is 35 percent. What is Jack's weighted average cost of capital?
What are the portfolio weights for a portfolio that has 205 shares of Stock A that sell for $98 per share and 180 shares of Stock B that sell for $138 per share? (Round your answers to 4 decimal pla
Next, compare the level of capital spending across the two firms. Point out how the spending was similar and/or different and speculate why the similarities or differences might exist.
The present value of a 11-year annuity is $200,958. If the interest rate is 10% and payments are made at the end of each period, what is the amount of each payment?
Based on the information give what is the current market price of Hack's preferred stock and what is Endowment's tax liability on its dividend income?
The 6-month LIBOR rate at the last payment date was 10.2% (with semiannual compounding). What is the current value of the swap?
Johnny's Pizza shop has sales of $531,000 and costs of $358,000. The profit margin is 4.8 % and teh accounts payable period is 41 days. What is the average accounts payable balance?
The beta of the stock is 1.4. How many futures contract does he have to purchase? If it's a short position, report a negative number.
BC Company has $627,440 of operating income after all costs but before $35,259 of interest income, $34,204 of dividend income, and taxes. What is the tax expense?
ABC Company earned $884,215 in taxable income for the year. How much tax does the company owe on this income?
The 6-month, 12-month, 18-month, and 24-month zero rates are 3%, 4%, 5%, and 6% with semiannual compounding. What is the continuous compounding forward rate for the six-month period beginning in 12
A 2-year long forward contract on a non-dividend-paying stock is entered into when the stock price is $138 and the risk-free interest rate is 9.3% per annum with continuous compounding. 1 year later
At the expiration, the stock price becomes $18.99. Calculate the option profit to the trader.
The 12-month, 15-month, 18-month zero rates are 4.5%, 4.6%, 4.7% with continuous compounding. What is the value of an FRA that enables the holder to earn 6.1% (with semiannual compounding) for a 3-m
Suppose the 6-m LIBOR rates were 5.7% on 6/1/2013 and 6% on 12/1/2013. What is the net cash flow of the swap contract on 12/1/2013?