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James Corporation has the following terms with its suppliers: 2/10, net 60. It normally takes the discount and pays within ten days. However, due to cash shortage, it intends to delay the payment. F
You are going to be given $79,000 in 15 years. Suppose the inflation rate of 2.4%, what is the present value of this amount?
Calculate the cost of internally generated equity (retained earnings) using DCF (Discounted Cash Flow) approach.
A firm evaluates its investment by using the IRR rule. if required rate of return on aninvestment is 18% should firm accept a project which has the initial cost of $30,000.00 and cash flow.
Find the present value of an income stream which has a negative flow of RM100 per year for 3 years, a positive flow of RM200 in the 4th year, and a positive flow of RM300 per year in Years 5 through
If firm borrowed $50,000 at rate of 9%, simple interest, with monthly interest payments and 365-day year, find the effective annual rate on this loan?
Fair and Equitable has to find out its cost of capital using following information. Compute cost of capital for firm. Fair and Equitable has 20 million common shares outstanding.
What dividend payout ratio is necessary to achieve this growth rate under these constraints? What is the maximum growth rate possible?
What will be the effect of the price increase on the firm's FCF for the year?
Each member should prepare a brief description of the country risk methodology to be used, which includes factors, variables, and quantitative and qualitative models.
Calculate the company's after-tax weighted-average cost of capital (WACC) and determine which of three projects company should accept. The relevant tax rate is 30%.
What are some of the major differences between futures and forward contracts? How do these contracts differ from spot contracts?
The company's bankers assure Rienegar management that it can raise $3,000,000 by issuing 25-year Original Issue Discount (OID) bonds bearing a 6.25% semiannual coupon. What will be the par value of
Assume Federal Reserve Board increases money supply, causing risk-free rate to drop to 9 percent and rM to fall to 12 percent. What would this do to price of the stock?
Olga's cost recovery deduction for 2012, except for cost recovery with respect to new seven-year assets, is $95,000. Determine her total cost recovery for 2012 with respect to seven-year class asset
Pearson Brothers recently reported an EBITDA of 7.5 million and net income of 1.8 million.?It had 2.0 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreci
Now suppose that TTC's period of supernormal growth is to last another 5 years rather than 2 years. How would this affect price, dividend yield, and capital gains yield?
The dividend should grow rapidly at a rate of 50% per year during Years 4 and 5. After Year 5, the company should grow at a constant rate of 8% per year. If the required return on stock is 15%, what
These bonds make annual payments and mature 13 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 11 percent. If the inflation rate was 3.4 percent
Mr. Art Deco will be paid $100,000 one year hence. This is a nominal flow, which he discounts at an 8% nominal discount rate: PV = 100,000/1.08 = $92,593 The inflation rate is 4%.
In mid March 2007, the U.S. dollar equivalent of euro was $1.3310. In mid July 2009, the U.S. dollare equivalent of a uro was $1.4116. Using indirect quotation method, estimate currency per U.S. dol
In the U.S., 90-day investments of similar risk have 4% annualized return and 1% quarterly (90-day) return. In the 90-day forward market, 1 British pound equals $1.65. If interest rate parity holds,
One way of getting required funds would be to forgo the discount, and firm's owner believes she could delay payment to 40 days without adverse effects. What would be the effective annual percentage c
Compute value of stock today,ˆP0. Proceed by finding present value of dividends expected at t = 1, t = 2, t = 3, t = 4, and t = 5 plus present value of stock price.
What would be the maximum amount of checkable deposits after deposit expansion, and what would be the money multiplier?