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A 12- year, 5% coupon bond pays interst annually. The bond has a face value of $1,000. What is the change in the price of this bond if the market yield rises to 6% from the current yield of 4.5%? &
Compute the accounts receivable balance before and after the change in the cash discount policy. Use the net sales (total sales - cash discounts) to determine the average daily sales and the account
The current market value of the old machine is $25,000 but the book value is $32,000. The firm's tax rate for ordinary income is 30%. What is the net cash outflow for the new machine after consider
Swan's Bicycle Boats had a degree of accounting operating leverage equal to 1.50 during the most recent period. If the firm's EBITDA was $5,000 and its fixed costs were equal to $1,750, then what wa
A particle is moving along the curve y= 5 sqrt{2 x + 1}. As the particle passes through the point (4, 15), its x-coordinate increases at a rate of 5 units per second. Find the rate of change of the
Motor Homes Inc. (MHI) is presently enjoying abnormally high growth because of a surge in the demand for motor homes. The company expects earnings and dividends to grow at a rate of 20% for the next
The table below shows the average return on U.S. stocks and bonds for 25-year periods ending in 1925, 1950, 1975,and 2000. Calculate the equity risk premium fo each quarter century. What lesson emer
The company's last dividend, D0, was $2.00. MHI's beta is 1.5 , the market risk premium is 6%, and the risk-free rate is 4%. What is the current price of the common stock
Natural Footware has total fixed costs of $30,000 per month, including $3,000 per month of depreciation expense. It sells natural sole shoes for $29 a pair, and the variable cost of each pair of sho
Scotto Manufacturing is a mature firm in the machine tool component industry. The firm's most recent common stock dividend was $2.40 per share. Because of its maturity as well as its stable sales an
Complex Systems has an outstanding issue of $1,000-par-value bonds with a 12% coupon interest rate. The issue pays interest annually and has 16 years remaining to its maturity date.
Determine the proposal's appropriateness and economic viability. For all scenarios, assume spending occurs on the first day of each year and benefits or savings occurs on the last day. Assume the di
What are the two projects' net present value, assuming the cost of capital is 5%? 10%? 15%? What are the two projects' IRRs at these same costs of capital?
Niko Enterprises' bonds currently sell for $1,050. They have a 6-year maturity, an annual coupon of $75, and a par value of $1,000. What is their current yield
You purchase 1,000 shares of Spears Grinder, Inc. stock for $45 per share. A year later, the stock pays a dividend of $1.25 per share, and it sells for $49. Calculate your total dollar return.
Resources: Financial Management: Principles and Applications, student website, Electronic Reserve Readings, and the Internet
You are a hard working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost structure information for this com
The federal government sometimes taxes dividends and capital gains at different rates. Other things held constant, if the tax rate on dividends is high relative to that on capital gains, then indivi
Boudreaux, age 30, wants to retire at age 60. He currently makes $50,000 per year. He has an objective to live on 75 percent of his preretirement income when he retires.
Dahlia Inc. has a 12-year, 10% annual coupon bond outstanding. The bond has a face value (FV) of $1,000, and a yield to maturity (YTM) of 9%. What is the current market price of the bond?
Phillips Equipment has 80,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 6.75 percent. The company also has 750,000 shares of 7 percent preferred stoc
What is the firm's EOQ? What is Latest Fashionable Clothes' minimum cost of ordering and holding inventory?
Profit margins turnover ratios vary from one industry to another. What differences would you expect to find between a grocery chain, such as Safeway, and a steel company? Think particularly about tu
Herbert has opened a retirement fund account which pays 7 percent interest and requires $5,000 annual deposits. Herbert will retire in 15 years and expects 10 years of retirement life. What is the m
Gary's Pipe and Steel company expects sales next year to be $800,000 if the economy is strong, $500,000 if the economy is steady, and $350,000 if the economy is weak. Gary believes there is a 20 per