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Describe some of the ethical considerations of a financial manager selling collateralized debt obligations, such as sub-prime loans, to elderly clients.
Ratzell's Place has a market-to-book ratio of 2.7, net income of $68,400, a book value per share of $37, and 45,000 shares of stock outstanding. What is the price-earnings ratio?
Lever Age pays an 8 percent coupon on outstanding debt with face value $10 million. The firm's EBIT was $1 million. What is times interest earned? If depreciation is $200,000, what is cash coverage?
Assume that Apple is selling for $180 per share. Apple implements one of the following stock dividends or stock splits, and no other change in the value of the firm occurs. What is the value of one
A firm's production function is , where stands for output, for labour, and for capital. The firm is a monopolist in the output market but it hires the inputs in perfectly competitive markets at cons
Suppose a firm is considering two mutually exclusive projects. One has a life of 10 years. Would the failure to employ some type of replacement chain analysis bias an NPV analysis against one of the
A company's perpetual preferred stock currently trades at $80 per share and pays a $6.00 annual dividend per share. If the company were to sell a new preferred issue, it would incur a flotation cost
Akyol Corporation is undergoing a restructuring, and its free cash flows are expected to be unstable during the next few years. However, FCF is expected to be $50 million in Year 5,
The Morrissey Company's bonds mature in 7 years, have a par value of $1,000, and make an annual coupon payment of $70. The market interest rate for the bonds is 8.5%. What is the bond's price?
Midwest Bank also offers to lend you the $25,000, but it will charge an annual rate of 8.3%, with no interest due until the end of the year. What is the difference in the effective annual rates char
What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $2,950 at the end of Year 4 if the interest rate is 5%?
Explain DuPont Analysis and then work through the following: What is the percent return on total market value? Does this appear to be an adequate return on the actual market value of the firm?
What are the net savings to the corporation if a bank agrees to provide a 270-day SLC for an up-front fee of 20 basis points to back the commercial paper issue?
Fancy Food, Inc. has issued a bond with par value of $1,000, coupon rate of 9 percent paid semi annually, and matures in 10 years. What is the value of the bond if the required rate of return is 12
Current liabilities are $90,000 and long-term liabilities are $160,000. There is $90,000 in preferred stock outstanding and the firm has issued 10,000 shares of common stock. Compute book value (net
Assume that you are a consultant to Morton Inc., and you have been provided with the following data: D1 = $1.00; P0 = $25.00; and g = 6% (constant). What is the cost of equity from retained earnings
In 750 to 1,000 words, using APA format, explain the concept of duration and then comment on the statement, "It is possible that a bond with a shorter maturity than another bond may actually have a
What is each project's payback period? What is each project's net present value? What is each project's internal rate of return? What has caused the ranking conflict?
Rockmont Recreation Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC (and even negative),
How large can fixed costs be for the wholesaling operation and still allow the 26 percent operating profit margin to be achieved? What is the break-even point in dollars for the firm?
Microsoft's monopolistic behavior. established an oversight board responsible for improving auditing standards within companies.
A company wants to invest in a new advertising program. Using the NPV method of capital budgeting, determine the proposal's appropriateness and economic viability with the following information:
Compare and contrast the main policies of the US Federal Reserve and the European Central Bank over the last 10 years. Based on these policies, identify and contrast the main priorities of these ins
Identify the most important principles of managing operating exposure from the perspective of a financier. Provide examples not mentioned in the textbook of how companies employ these principles eff
Big Air Services is now in the final year of a project. The equipment originally cost $20 million, of which 75% has been depreciated. Big Air can sell the used equipment today for $6 million, and it