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Flotation costs are expected to be 5 per cent; these costs can be amortized for tax purpose during 8 years at a uniform rate. The corporate tax rate is 35 per cent. Determine the costs of preference
Consider the following two, completely separate, economies. The expected and volatility of all stocks in both economies is the same. In the first economy, all stocks move together-in good times all
If no new debt was issued during the year, the cash flow to creditors is $ and the cash flow to stockholders is $.Interpret and explain the positive and negative signs of your answers in a) and d)
Write the equation of the returns on your portfolio if you place only five stocks in it. Write the equation of the returns on your portfolio if you place in it a very large number of stocks that all
Suppose 10-year T-bonds have a yield of 5.30% and 10-year corporate bonds yield 8.90%. Also, corporate bonds have a 0.25% liquidity premium versus a zero liquidity premium for T-bonds, and the matur
However, the ratio of variable costs to sales will increase from 68% to 80%. What will happen to break-even level of revenues?
A 12-year bond pays an annual coupon of 8.5 percent. The bond has a yield to maturity of 9.5 percent and a par value of $1,000. What is the bond's current yield?
Which of the following is NOT included in the calculation of free cash flows from an asset perspective?
From a financial manager's perspective, discuss the capital budgeting process used to identify projects that add to the firm's value? How do capital budgeting decisions help to define a firm's strat
Management efficiency ratios need 160 word on Verizon and Mc Donalds Fast food. This the information I needit to cover. inventory turnover ratio (cost of goods sold divided by inventory), days sales
A company has capital of $200 million. It has an EROIC of 9%, forecasted constant growth of 5%, and a WACC of 10%. What is its value of operations? What is its intrinsic MVA?
Assume market prices dor not change and that the haircut is 1%. Assume the amount of the trade is $1,000,000. Compute the dollar earning and the rate of return on invested capital
Calculate earnings per share for each level of indebtedness. Use Equation 12.12 and the earnings per share calculated in part a to calculate a price per share for each level of indebtedness. Choose t
What is his after-tax yield (interest rate) on the bonds? Suppose Twin Cities Memorial Hospital has issued tax-exempt bonds that have an interest rate of 6 percent. With all else the same, should Jo
Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $0.67; P0 = $27.50; and g = 8.00% (constant). What is the cost of common from retained earni
Taggart is considering borrowing funds at a cost of 6% and using these funds to repurchase existing shares of stock. Assume perfect capital markets. If Taggart borrows until they achieved a debt -to
Suppose you bought a 20 year 8% annual coupon bond for $950. If you reinvested the coupon payments at 7% and sold the bond for $980 after holding it for 4 years, what was your total return?
You buy 300 shares of Qualitycorp for $30 per share and deposit initial margin of 50%. The next day Qualitycorp's price drops to $25 per share. What is your actual margin?
The monthly cash budget that you have prepared assumes that all cash flows occur on the 15th of each month. Suppose MacAdam's outflows tend to cluster at the beginning of the month, while collection
Assume Green Leaf Nursery anticipated sales of $630 in the first quarter. Accounts receivable at the beginning of the year was $373. Assuming a collection period of 60 days, which is the approximate
Assume that you are an NBA team owner who wants to build an arena with a budget of $400 million. You will provide $200 million. ... You will provide $200 million of your own funds, but must finance
What is the net cost of an average demand deposit? If the bank can invest the deposit balance (after adjusting for reserve requirements) at 5%, what is the break-even deposit balance?
Pearson Brothers recently reported an EBITDA of $9.0 million and net income of $2.25 million. It had $3.6 million of interest expense, and its corporate tax rate was 40%. What was its charge for dep
You sold ten put option contracts on PLT stock with an exercise price of $32.50 and an option price of $1.10. Today, the option expires and the underlying stock is selling for $34.30 a share. Ignori