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A company has $30 million portfolio with a beta of 1.5. The futures price for a contract on the S&P index is 900. Futures contracts on $250 times the index can be traded. What trade is necessary
Suppose earthquakes are predicted based on the seismic test information;i.e., an earthquake is predicted if a fault line is 1 mile or less away, and no earthquake is predicted otherwise. What is the
Barry Company is considering a project which has the following cash flow and WACC data. What is the project's NPV? Note that a project's expected NPV can be negative, in which case it will be reject
Page Enterprise has bonds on the market making annual payments, with 9 years to maturity, and selling for $948. At this price, the bonds yield 5.9 percent. What must the coupon rate be on the bonds?
Heinz Corporation bonds carry a coupon of 8% and will mature in 5 years at $1,000. Newly issued 5-year bonds with similar characteristics are yielding 4%. Calculate today's market price of the Heinz
The YTM of a 15 year 9% bond that is currently selling for $1,134,hold it for four years, and then sell it for $1080. What is your total return (or "realized compound yield") if you reinvested your c
Using Internet sources (you might want to start with the following article from SmartPros), discuss this issue and prepare a 3-4 page management brief for Acme's upper management group on the curren
What are the pros and cons of each of these 3 methods of capital budgeting: Simple Payback, Net Present Value, IRR
W.C. Cycling had $37,000 of cash at year-end 2011 and $29,000 in cash at year-end 2012. The firm invested in property, plant, and equipment totaling $280,000. Cash flow from financing activities tot
If total liabilities and capital were $14 million, and $1 million of deposits were withdrawn from the bank, what would be the amount of the owners' capital?
Suggest the co. the alternative that maximizes the EPS of the firm. Compute the EPS-EBIT indifference point.
Find the market price of the bond if the yield rate is 5% compounded semi-annually. Is this bond selling at a discount or at a premium.
The study of annual reports reviewed in this course indicates that wide differences of opinion exist on how many ratios should be computed and by whom. Do you agree or disagree? Why?
The IPO process is characterised by information asymmetries. Explain how these asymmetries may be reduced through the book-building process.
Both firms sell 10,000 units of output at $2.50 per unit. The variable costs of production are $1, and the fixed production costs are $12,000. (To ease the calculation, assume no income tax.)
Considering the sources of funds available to East Coast Bank Holding Corporation, which of these funds do you feel is more significant in determining the value of a bank?
You talk to your client, Alice, about starting to invest her money. You want her to have a diversified portfolio. You explain to her that any good portfolio is a combination of various investment ve
In 2011, what is the maximum amount of employee pretax contribution (elective deferral) that may be made to a traditional profit-sharing Section 401(k) plan by an individual younger than age 50?
On the bases of past experience, 50% of the accounts receivable are collected the month after the sale and the reminder are collected 2 months after the sale. purchases are paid 30 days after they a
Plan A: is an all common equity structure with $2.4 million being raised by selling 80,000 shares of common stock
What is the annual opportunity cost of a checking account that requires a $350 minimum balance to avoid service charges? Assume an interest rate of 6.5 percent.
You have been asked to value a firm with expected annual after-tax cash flows, before debt payments, of $100 million a year in perpetuity.
Which of the following statements accurately describes a reason for the suitability of an asset class in a qualified retirement plan portfolio?
An emergency that lasted an hour and patients who had appointments during this time were told to come back later. How can you measure the doctor's performance in the surgery?
The CEO has strongly encouraged that you buy lighting products for the new municipal stadium from a supplier that belongs to the CEO's country club. How would you handle this attempt to influence