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Suppose In a Found Ltd. just issued a dividend of $1.43 per share on its common stock. The company paid dividends of $1.05, $1.12, $1.19, and $1.30 per share in the last four years.
The Up and Coming Corporation's common stock has a beta of 1.05. If the risk-free rate is 5.3 percent and the expected return on the market is 12 percent, Up and Coming's cost of equity is ____perce
Suppose that the price of a non-dividend paying stock is $32, its volatility is 30%, and the risk-free rate for all maturities is 5% per annum. Use DerivaGem to calculate the cost of setting up the
Assume RHM is expected to pay a total cash dividend of $5.60 next year and its dividends are expected to grow at a rate of 6% per year forever. Assuming annual dividend payments, what is the curren
Mullineaux Corporation has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Its cost of equity is 14 percent, the cost of preferred stock is 6 p
Assume that the industry has an average receivables turnover of six times per year. If this knowledge has been available in 2007, along with knowledge of the company's receivable turnover rate, do y
Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $2.7 million at the end of the first year, and these savings will grow at a rate of 4 percent per year in
Fama's Llamas has a weighted average cost of capital of 8.9 percent. The company's cost of equity is 12 percent, and its pretax cost of debt is 7.9 percent. The tax rate is 35 percent.
Sixx AM Manufacturing has a target debt-equity ratio of 0.65. Its cost of equity is 15 percent, and its cost of debt is 9 percent. If the tax rate is 35 percent, the company's WACC is ___ percent.
The riskless return is currently 6%, and Chicago Gear has estimated the contingent returns given here.
Determine the EBIT indifference point. Discuss the implications of EBIT above and below this point
The local hamburger fast-food restaurant purchases 20,000 boxes of hamburger rolls every month. Order costs are $50 an order, and it costs 25 cents a box for storage.
Stover Electricals is a company with no growth potential. Its last dividend was $3.75, and it expects no change in future dividends. What is the current price of the company's stock given a discount
Filer Manufacturing has 11 million shares of common stock outstanding. The current share price is $68, and the book value per share is $6. Filer Manufacturing also has two bond issues outstanding.
Commodore Corporation is deciding whether it makes sense to invest in a project today, or to postpone this decision for one year. Which of the following statements best describes the issues that Com
What was your realized return? How much of the return came from dividend yield and how much came from capital gain?
Rockwell Corporation had net income of $150,000 for the year ending 2008. The company decided to payout 40% of earnings per share as a dividend. Rockwell has 120,000 shares issued and outstanding. W
Calculate the present value of the increased cash flows. If the company requires an 11 percent return for such an investment, should it undertake the revision?
A company has bonds outstanding that have a 7% coupon and 10 years left until maturity. The interest payments are made annually. If the YTM is 9%, what is the current bond price?
Oklahoma Instruments (OI) is considering a project that has an up-front cost of $250,000. The project's subsequent cash flows critically depend on whether its products become the industry standard.
A long-term debt issue in the amount of $200 million calls for mandatory redemption payments of $30 million each at the end of years 7, 8, and 9 and repayment of the remaining balance (called the ba
If you can buy a car today for $ 5,000; and it is worth $10,000 in extra income next year to you because it enable you to get a job as traveling anvil seller, should you take out a loan from Eddy th
A portfolio's expected return is 12 %, its standard deviation is 20%, and the risk-free rate is 4%. Which one of the following would make for the greatest increase in the portfolio's Sharpe ratio?
Centennial Brewery produced revenues of 1,145,227 in 2008. It has expenses (excluding depreciation) of 812,640, depreciation of 131,335, and interest expense of 81,112. It pays a marginal tax rate
Nachman Industries just paid a dividend of D0 = $4.75. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The r