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Suppose a firm has a retention ratio of 45 percent, net income of $30.3 million, and 5.3 million shares outstanding. What would be the dividend per share paid out on the firm's stock?
The company's beta is 1.65, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price?
Sorenson Corp.'s expected year-end dividend is D = $4.00, its required return is r = 11.00%, its dividend yield is 6.00%, and its growth rate is expected to be constant in the future. What is Sorens
Your grandmother put $35,000 aside for you 13 years ago. Today, the account is worth $76,432.16. Assuming the money was invested with a daily compounding, what was the rate of return on the funds yo
High Mountain Foods has an equity multiplier of 1.55, an asset utilization rate of 1.1', and a profit margin of 7.5%. What is the return on equity?
Your auto finance company is quoting you an Annual Percentage Rate (APR) of 8%. You are borrowing $45,000 and the payment is $845 per month. You will make monthly payments. Which is the Effective An
The opportunity cost of capital is 10.3 percent. Calculate the NPV of each choice and suggest when should Predator sell the company?
You are planning to make annual deposits of $6,210 into a retirement account that pays 8 percent interest compounded monthly. How large will your account balance be in 25 years?
what is its self-supporting growth rate? Do not round intermediate steps. Round your answers to the nearest whole.
The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 65%. What would be the additional funds needed? Do not round intermediate calculations. Round your answer to th
An investment pays $2,500 per year for the first 6 years, $3,000 per year for the next 8 years, and $5,000 per year the following 10 years (all payments are at the end of each year). If the discount
Using the following information, find the Expected Return, Variance, and Standard Deviation for the returns on Stock 1 and Stock 2. Also, find the Covariance and Correlation Coefficient between the
The project's WACC is 10.5%. What is the project's net present value (NPV)? What is the IRR? Should the project be accepted? Why or why not?
All of Division A's projects are equally risky, as are all of Division B's projects. However, the projects of Division A are less risky than those of Division B. Which of the following projects shou
A pension plan is obligated to make disbursements of $3.0 million, $3.8 million, and $3.0 million at the end of each of the next three years, respectively. Find the duration of the plan's obligation
However, Stock A's standard deviation of returns is 12% versus 8% for Stock B. Which stock should this investor add to his or her portfolio, or does the choice not matter?
Assume that the risk-free rate remains constant, but the market risk premium declines. Which of the following is most likely to occur?
The company uses the CAPM to calculate its cost of equity, and its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would REDUCE its WACC?
Your father is about to retire, and he wants to buy an annuity that will provide him with $85,000 of income a year for 25 years, with the first payment coming immediately. The discount rate on such
On January 1, 2009, your brother's business obtained a 30-year amortized mortgage loan for $250,000 at a nominal annual rate of 7.0%, with 360 end-of-month payments. The firm can deduct the interest
The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its require
ABC Corp believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock?
The CFO thinks the WACC should be based on market value weights, but the president thinks book weights are more appropriate. What is the difference between these two WACCs?
Barry Company is considering a project that has the following cash flow and WACC data. What is the project's NPV? What is IRR? What is MIRR? Should this project be accepted? Why?
The firm expects to operate the machine for 4 years and then to sell it for $12,500. If the marginal tax rate is 40%, what will the after-tax salvage value be when the machine is sold at the end of