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Both firms think they will have earnings of $55,000 a year continuously and because of their costs, neither firm pays any taxes. For the purposes of this problem, investors can also borrow money at
LSI recently issued $195,000 of perpetual 9% debt and used the cash to do a stock repurchase. Earnings for LSI are anticipated to be $83,000 annually before interest and taxes.
You borrow $285,000; the annual loan payments are $38,022.04 for 30 years. What interest rate are you being charged? Round your answer to two decimal places.
A stock has paid dividends of $1.80, $1.85, $2.00, $2.20, and $2.25 over the past five years, respectively. What is the average capital gains yield?
Backwater Corp. has 10 percent coupon bonds making annual payments with a YTM of 9.3 percent. The current yield on these bonds is 9.65 percent.
If NHC earns $13,500,000 in the coming year after taxes but before dividends, and this is all paid out to the preferred stockholders, how much will the company be in arrears (behind in payments)? Ke
What happens to the value of a perpetuity when interest rates increase? What happens when interest rates decrease. Explain why these changes occur.
Calculate the NPV of going directly to market and the NPV of test marketing before going to market.
What is the financial break-even point for the project? (Do not round intermediate calculations and round your final answer to nearest whole number.
It has been said that a balance sheet is a snapshot of the firm at some point in time. What does this mean? How does it differ from what the income statement is showing?
There are several different groups that use financial ratio analysis. Who are these groups and what are the primary concerns of each?
how might one start including more cost-based financial information in a decision-making processes? is the information needed available today? If not, how would one get this information?
What are the advantages & disadvantages of each estate planning strategy? What would likely happen without your plan being implemented?
What are the expected return and standard deviation of a portfolio with half of its funds invested in each of these securities?
If market interest rates rise by 0.75%, find the percent change in the price of each bond. Express your answers as percentages rounded to two decimal places.
Find the payback period. Explain what this means in your own words without quoting the definition of payback period. In addition, state whether or not this is considered to be an acceptable payback
What would a fully-taxable corporate bond have to yield in order to produce the same after-tax return as the 5% municipal bond? Show work. Express your answer as a percentage rounded to two decimal
What dollar amount of interest will he receive from this bond every six months? Explain or show work.
You have just purchased a 10-year TIPS with face value $1,000 and a 4% coupon rate. Inflation for the year turns out to be 6%. What will your interest payments be next year? Show work and explain.
A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 7% (3.5% per half-year).
Why does the cost of equity increase with an increased use of debt in the capital structure?
Homer's Trucking Company bonds have a 11% coupon rate. Interest is paid semi-annually. The bonds have a par value of $1,000 and will mature 8 years from now. Compute the value of Homer's Trucking Co
Solar Corporation earned a 4% profit margin on sales of $30 billion, turned over its assets 6 times, had a current ratio of 3.4, an EPS of $4.25, and a return on equity of 15%. Calculate Solar's ret
Suppose the returns for Stock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%.