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An open-end fund has a net asset value of $10.70 per share. It is sold with a front-end load of 6%. What is the offering price?
What is a contagious run? what are the some potentially serious adverse social welfare effects of a contagious run? How does deposit insurance help mitigate the problem of bank runs?
What is the degree of financial leverage for each plan at $7,000,000 of EBIT? What is the financial breakeven point for each plan?
A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 7%, and if investors require a(n) 11% rate of return, what is the price of the stock
Southwest U's campus book store sells course packs for $16 each. The variable costper pack is $10, and at current annual sales of 50,000 packs, the store earns $75,000 before taxes on course packs.
Please justify how a firm should make financial decisions with respect to bond prices and interest rates. What approach would you recommend? Why?
Assuming there are no market frictions such as corporate or personal income taxes, calculate the expected return on equity for MEC shareholders, under both the current all-equity capital structure a
Tunney Industries can issue perpetual preferred stock at a price of $59.00 a share. The stock would pay a constant annual dividend of $6.00 a share. What is the company's cost of preferred stock, r
What issues arise when the firm is deciding how to partition profits between dividends and retained earnings?
What is the degree of operating leverage at 20,000 bags and at 25,000 bags? Why does the degree of operating leverage change as the quantity sold increases?
If the bonds are noncallable, what is the price of the bonds today? If the bonds are callable one year from today at $1,450, will their price be greater than or less than the price you computed in (a
Wilson Wonders's bonds have 12 years remaining to maturity. Interest is paid annually; the bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at a price of $850. What
Bartling Energy Systems recently reported $9,250 of sales, $5,750 of operating costs other than to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating depreci
The real risk-free rate, k*, is 2.5%. Inflation is expected to average 2.8 perecent a year for the next 4 years, after which time inflation is expected to average 3.75% a year. Assume that there is
The Canton Sundae Corporation is considering the replacement of an existing machine. The new machine, called an X-tender, would provide better sundaes, but it costs $120,000.
Find the financial statements for a publicly traded company, and examine its financial statements from the perspective of a potential investor. Find or prepare the price/earnings ratio, the dividend
Brandi Co. has an unlevered beta of 1.10. The firm currently has no debt, but is considering changing its capital structure to be 30% debt and 70% equity. If its corporate tax rate is 40%, what is B
What will be the effect of this action on Sooner's return on investment and its return on stockholder's equity if the funds received by reducing the average collection period are used to buy back it
The real risk-free rate is 3%. Inflation is expected to be 2 percent this year (Year 1) and 4 percent during the next two years (Years 2 and 3). Assume that the maturity risk premium is zero. What i
A sample of 12 students from a large group obtain an average of 56.9% in an exam, and the sample variance is 25%. Determine a 95% confidence interval for the mean exam mark for the whole group, assu
Barry's Steroids' Company has $1,000 par value bonds outstanding at 12 percent interest. The bonds will mature in 50 years. Compute the current price of the bonds if the present yield to maturity i
Consider a coupon bond that pays $105 every year and repays its principal amount of $1,500 at the end of 7 years. If the rate of discount is 7 percent, the present value of the bond is
What are the pro forma retained earnings for next year if Fake Stone, Inc. grows at a rate of 2.5 percent and both the profit margin and the dividend payout ratio remain constant?
Major Manuscripts, Inc. does not want to incur any additional external financing. The dividend payout ratio is constant. What is the firm's maximum rate of growth?