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An investor holds a Treasury bond with a face value of $5000, a coupon rate of 4%, and semiannual payments that matures on 15/01/2012. How much will the investor receive on 15/01/2012?
Refer to the information above. Assuming that the film maker issues the new security, the net present value (NPV) for this project is closest to what amount? Should the film maker make the investmen
If Acme's free cash flow is expected to be $7 million next year and is expected to grow at a rate of 3% per year, what is Acme's WACC?
Suppose you add a new stock to your portfolio. NewCo now accounts for 50% of your total portfolio. The expected dollar return on NewCO stck is 19% and its standard deviation is 30.
Weisbro and Sons common stock sells for $24 a share and pays an annual dividend that increases by 4.9 percent annually. The market rate of return on this stock is 10.60 percent. What is the amount o
The outstanding bonds of Roy Thomas, Inc. provide a real rate of return of 3.6 percent. The current rate of inflation is 2.1 percent. What is the nominal rate of return on these bonds?
After that time, they feel the business will be worthless. Marko has determined that a rate of return of 13 percent is applicable to this potential purchase. What is Marko willing to pay today to bu
You borrow $5,830 to buy a car. The terms of the loan call for monthly payments for 6 years a rate of interest of 7 percent. What is the amount of each payment?
Included in AOL's assets was $1.5 billion in cash and risk-free securities. Assume that the risk-free rate of interest is 3% and the market risk premium is 4%.
What is the price of a treasury STRIPS with a face value of $100 that matures in ten years and has a yield to maturity of 3.5%.
Thomans preferred stock dividend is $15,000. Its weighted-average common shares outstanding were 250,000. What is Thoman cash flow per share?
Engstrom Company began fiscal 2013 with a $40,000 balance in Retained Earnings. During 2013, its net income was $167,890 and it declared and paid dividends of $50,000. What is the ending balance of
You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck. since you are not an expert on industrial vehicles, you hire a consulting fi
Calculate the required pre-tax earnings to cover debt and preferred stock obligations, before and after the recapitalization?
Mandesa, Inc., has current liabilities of $8 million, current ratio of 2 times, inventory turnover of 12 times, average collection period of 30 days, and credit sales of $64 million.
Shara Miselle Co. just paid a dividend of $1.65 on it's common stock. This companys dividend are expected to grow at a constant rae of 3% indefinately. If the required rate of return on this stock i
A $1,000 bond has a coupon rate of 10 percent and matures after 8 years. Interest rates are currently 7%.
You are serving on a jury. A plaintiff is suing the city for injuries sustained after falling down an uncovered manhole. In the trial, the doctor testified that it will be 5 years before the plainti
As president of Madison Corp. your finance people tell you that Madison is 30% debt and 70% common stock. In addition they tell you the cost of the common stock is 11% and the cost of the debt is 5.
The merger is expected to increase net income of the combined companies by $275,000 (in synergistic benefits). What is the maximum exchange ratio TNT can offer and what is the minimum exchange ratio
The new machine will be depreciated using the simplified straight-line method over its 5 year useful life, resulting in expected to increase by $10000 at the inception of the project, but this amoun
Shara Miselle Co. just paid a dividend of $1.65 (D0) on its common stock. This company's dividends are expected to grow at a constant rate of 3% indefinitely. if the required rate of return on this
Zhdanov Inc. forecasts that its free cash flow in the next two years will be, Year FCF t=1 -$10 million t=2 $20 million After Year 2, FCF is expected to grow at a constant rate of 4% forever.
PV of financial distress=800,000 x (D'V)^2. What is the firm's levered value if it issues $200,000 of perpetual debt to buy back stock?
The dividend is expected to grow at a constant rate forever. What is the growth rate for this stock?