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Your portfolio has a beta of 1.33. The portfolio consists of 14 percent U.S. Treasury bills, 25 percent stock A, and 61 percent stock B. Stock A has a risk level equivalent to that of the overall ma
Jensen's Travel Agency has 9 percent preferred stock outstanding that is currently selling for $30 a share. The market rate of return is 10 percent and the firm's tax rate is 34 percent. What is Jen
find an article about a company reporting key financial news (e.g. landing a large contract, reporting unusual profits or losses, expressing concern for future profitability, etc.).
Assume that for a 5-year period, large-company stocks had annual rates of return of 21.04 percent, -9.10 percent, -11.89 percent, -22.10 percent, and 28.89 percent. What is the variance of these ret
Why should companies use a project's net cash flows rather than its accounting income when determining a project's NPV? What are the major types of project risk?
You estimate that you will owe $42,800 in student loans by the time you graduate. The interest rate is 4.25 percent. If you want to have this debt paid in full within six years, how much must you pa
Discuss an advantage or disadvantage of the probate process, OR, Discuss the properties of a valid will, OR, describe the consequences of dying intestate in your State.
Discuss the Roth IRA, stating who can contribute and the advantages or disadvantages.
Company A needs $30 million at a floating-rate to fund a 5-year project while Company B desires $30 million at a fixed rate to complete its 5-year construction plans.
Avicorp has a $11.2 million debt issue outstanding, with a 5.8% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is current
Fox uses the net present value method and has a discount rate of 11.25%. Will Fox accept the project?
You estimate that the little drive-through coffee kiosk you own will generate ordinary annuity after-tax cash flows of $150,000 per year for the next ten years. If you discount these cash flows at a
Net income = $825; after-tax operating income [EBIT (1-T)] = $925; EBITDA=1,700; Gross fixed assets = $2,500; and Net operating working capital (NOWC) = 350. Tax rate is 40%. How much free cash flow
If the company's proxy for retained earnings is calculated at 15%, with a 50/50 debt to equity split in capital structure, what is the WACC?
what financial tool(s) would be the best available for hedging? Show how many U.S. dollars Crown Co. would receive, net of cost, under each of the tools you have just identified.
You own a portfolio that is 34 percent invested in Stock X, 24 percent in Stock Y, and 42 percent in Stock Z. The expected returns on these three stocks are 7 percent, 20 percent, and 16 percent, re
The current price of a 10-year, $1,000 par value bond is $1,000. Interest on this bond is paid every six months, and the simple annual yield is 14 percent. Given these facts, what is the annual coup
who would not have switched if the new product had not been introduced. What is the relevant sales level to consider when deciding whether or not to introduce Crunch Stuff n' stars?
If the company maintains a constant 6 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?
Antiques R Us is a mature manufacturing firm. The company just paid a $15 dividend, but management expects to reduce the payout by 12 percent per year indefinitely. Required : If you require an 19 p
Buchanan Corp. is refunding $12 million worth of 10% debt. The new bonds will be issued for 8%. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium?
The underwriters charge a 7.8 percent spread, the administrative costs are $411,000, and the offer price is $35 per share. How many shares of stock must be sold if the firm is to raise the funds it
A stock has a correlation with the market of .25. The standard deviation of the market is 20%, and the standard deviation of the stock is 45%. What is the stock's beta?
Assume the risk-free rate is 2% and the expected rate of return on the market is 12%. A share of stock is now selling for $100. It will pay a dividend of $9 per share at the end of the year. Its bet
A portfolio P generates an annual return of 16%, a beta of .8, and a standard deviation of 25%. The market index return is 15% and has a standard deviation of 21%. T-bill rate is 3%.