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You have a depreciation expense of $506,000 and a tax rate of 35%. What is your depreciation tax shield?
A company's 4% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $645.58. The company's federal-plus-state tax rate is 60%. What is the firm's after
Assume that the firm has a tax rate of 35 percent. Compute the cash flows to investors from operating activity.
Required: (a) Calculate the NPV of going directly to market now. (Do not include the dollar sign ($). Enter your answer in dollars, not millions of dollars. (e.g., 1,234,567)) NPV $ (b) Calculate th
callaghan Motors' bonds have 10 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 8%, and the yield to maturityis 9%. What is the bond
If the liquidity theory is correct, what should the current rate be on 2-year Treasury securities?
Your company uses the 3-year MACRS method to depreciate the machine and equipment which are 33% 45%, 15% and 7%. The cost of capital is 11%.
Use a two-step tree to value a six-month European call option and a six-month European put option. In both cases the strike price is $150.
Consider an option on a non-dividend-paying stock when the stock price is $30, the exercise price is $29, the risk-free interest rate is 5% per annum, the volatility is 25% per annum, and the time t
The maturity risk premium is 0.65 percent on 5-year securities and increases by 0.05 percent for each additional year to maturity. Calculate the liquidity risk premium on Tom and Sue's Flowers, lnc.
The company is in the 40% tax bracket. What is the weighted average cost of capital (WACC) for the company?
Explain how rulings by the courts and regulators have made the markets served by both commercial and investment banks more competitive.
Other cultures and legal systems absolutely refuse to allow a decendant, man or woman, to disinherit a child, minor or adult. Which system resonates with you personally?
If your tax rate is 30 percent and your required return is 11 percent on your investment, what bid price should you submit?
What benefit did the Venezuelan regime in power gain from the repeated devaluation of the Bolivar?
Why must a country's currency be devalued? What is failing in the economy?
Lease or Buy [LO3] What is the NAL for Wildcat? What is the maximum lease payment that would be acceptable to the company?
Verbal Communications, Inc., has 14,000 shares of stock outstanding with a par value of $1 per share and a market value of $32 per share. The firm just announced a 100 percent stock dividend. What i
The Peace River Corporation has 62,000 shares of stock outstanding at a market price of $48 a share. The company has just announced a 3-for-2 stock split. How many shares of stock will be outstandin
The Peanut Shack has 6,5000 shares of stock outstanding with a par value of $1 per share. The current market value of the firm is $145,600. The company just announced a 3-for-2 stock split. What wil
The offer price is $45 per share and the company's underwriters charge a spread of 7 percent. The SEC filing fee and associated administrative expenses of the offering are $550,000. (Enter your answ
A financial managermust decide what to do with the cash flows of her company. The anticipated rate of inflation exceeds the anticipated rate of return on investment. What might that manager reasonab
If the firms sales average $2 million a month, what is the average investment in acounts receivable? What is the annual cost to the firm of offering the trade discount?
will be used to repurchase. Assuming that individuals have the same borrowing opportunities as coprations, explain how an investor can undo the leverage that is proposed by Magnifence Inc. Under tho
Consider a four-year project with the following information: initial fixed asset investment = $440,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $25; v