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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?
Judy Johnson is choosing between investing in two Treasury securities that mature in five years and have par values of $1,000. One is a Treasury note paying an annual coupon of 5.06 percent. The oth
you can add dividend yield to expected growth rate to get expected total rate of return. Find stock's expected total rate of return?
You are serving a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial doctors testify that it will be five years before the plaintiff is ab
The dividend is expected to grow at constant rate of 7 percent a year. Required rate of return on stock, rs, is 15 percent. Find the value per share of the company's stock?
Assume that Kish Inc. hired you as a consultant to help estimate its cost of common equity. You have obtained the following data: D0 = $0.90; P0 = $27.50; and g = 7.00% (constant). Based on the DCF
Immediately after she bought bonds, interest rates fell to 7 percent. Find percentage change in price of each bond after decline in interest rates?
A very small country's gross domestic product is $12 million. a. If government expenditures amount to $7.5 million and gross private domestic investment is $5.5 million, what would be the amount of
Sosa Corporation recently reported EBITDA of $31.8 million and $9.7 million of net income. The company has $6.8 million interest expense, and corporate tax rate is 35 percent. What was the company's
A new bank has vault cash of $1 million and $5 million in deposits held at its Federal Reserve District Bank.
Antivirus, Inc., expects its sales next year to be $2,000,000. Inventory and accounts receivable will increase by $430,000 to accommodate this sales level.
A 30-year, $1,000 par value bond has 9.5% annual payment coupon. The bond currently sells for $875. If the yield to maturity remains at its current rate, what will the price be nine years from now?
Tidewater Home Health Care, Inc., has a bond issue outstanding with eight years remaining to maturity, a coupon rate of 10% with interest paid annually, and a par value of $1,000. The current market
Video Concepts, Inc.(VCI) manufactures a line of DVD recorders (DVDs) that are distributed to large retailers. The line consists of three models of DVDs. The following data are available regarding t