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Determine the times-interest-earned ratio for each probability. What is the probability of not covering the interest payment at the 30% debt level?
Quinn Auto expects to pay dividends during the next 12 months of $2.50 per share. The current price of their stock is $50.00 per share and they expect a constant growth of 5%.
Using the constant growth model, a firm's expected (D1) dividend yield is 3% of the stock price, and it's growth rate is7%, if the tax rate is .35% what is the firm's cost of equity?
How do bust up takeovers and subsequent liquidation of the parts increase the total value realized over the market price of the firm prior to its sale by parts?
Sao Paulo Sporting Goods is getting ready to produce a new line of soccer equipment by investing $1.5 million. The investment will result in additional cash flows of $435,000, $782,500, and $1,000,0
Harrison also plans to increase the debt ratio of what would be its Van Buren subsidiary--the effect of this would be to raise Van Buren's beta to 1.1. What is the per-share value of Van Buren to Ha
Valuation Van Buren currently expects to pay a yearend dividend of $2.00 a share ( D1=2.00). Van Buren dividend is expected to grow at a constant rate of 5% a year and its beta is .9. What is the cu
Evaluate the firm's approach to pollution control. Does it seem to be ethical? Why might incurring the expense to control pollution be in the best interests of the firm's owners despite its negative
The flotation costs associated with issuing preferred stock increase.
What was Bertin's total debt in 2008? How much new, long-term debt financing will be needed in 2009? (Hint: AFN - New Stock = New long-term debt).
Morgan Entertainment has a levered beta of 1.20. The firm's capital structure consists of 40% debt and 60% equity and it has a corporate tax rate of 40%. What is Morgan's unlevered beta?
Nelson Manufacturing is considering a project which would require a $6.2 million investment today (t = 0). The after-tax cash flows the factory generates will depend on whether the state imposes a n
Annual net cash flows include depreciation expenses, Calculate NPV and IRR for each type of truck, and decide which to recommend.
The shoe co. has a beta of .96. The risk-free rate of return is 4.6 percent and the expected return on the market is 13.5 percent. What is the cost of the equity?
Kingston, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $814,322, $863,275, $937,250, $1,017,112, $1,212,960, and $1,22
As an all-equity firm, management believes the earnings before interest and taxes (EBIT) will be $31,000 if the economy is normal, $11,000 if it is in a recession, and $37,000 if the economy booms.
What discounted cash flow approach works best when projects require different amounts of initial cash investment? Explain.
In view of public welfare, should the government impose more restrictions against the entry of foreign banks into Hong Kong? Explain the rationale behind your answer.
A corporate bond maturing in 20 years with a coupon rate of 8.9 percent was purchased for $980. What is its current yield?
The projects are equally risky, and their cost of capital is 12%. You must make a recommendation, and you must base it on the modified IRR(MIRR). What is the MIRR of better project
Why stock index futures and options sometimes are referred to as derivative products? Why do some investors believe derivative products make the markets more volatile?
Assume tht there are always investors lookign for positivie alpha and no investor would invest in a fund with a negative alpha. In equilibrium, that is, when no investor either takes out money or wi
Consider a bond paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has 3 years until maturity.
A 20-year maturity bond with par value of $1,000 makes semiannual coupon payments at a coupon rate of 8%. Find the bond equivalent yield if the bond price is:
Smith Technologies is expected to generate $150 million in free cash flow next year, and the FCF is expected to grow at a constant rate of 5% per year indefinitely. Smith has no debt or preferred st