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Planners may be subject to a malpractice action regardless of the level of care exercised in dealings with clients. However, which of the following actions are justifiable precautions to be taken by
Assess the structural characteristics of the American financial system, including both institutions and markets, that lead to its efficiency and effectiveness.
Davis Gas & Electric issued preferred stock in 1985 that had a par value of $50. The stock pays a dividend of 7.875%. Assume that shares are currently selling for $62.50. What is the preferred s
The dividend is expected to grow at a constant rate of 5 percent, and the stock has a required return of 9 percent. What is the expected price of the stock five years from today?
Discuss the positive and negative effects of the future value of an investment, for duration of a) a single period and b) a double period.
Upstate Water Company just sold a bond with 80 warrants attached. The bonds have a 20-year maturity and an annual coupon of 12%, and they were issued at their $1,000 par value. Currently, the yield
A stocks average return is 10 percent. the average risk-free rate is 7 percent, the standard deviation of the stock's retrun is 4 percent, and the stock's beta is 1.5 . what is the treynor index for
The Green Hills Co. has just gone public. Under a firm commitment agreement, Green Hills received $22.10 for each of the 8 million shares sold. The initial offering price was $24 per share, and the
What is the maximum possible subscription price? What is the minimum? If the subscription price is set at $30 per share, how many shares must be sold? How many rights will it take to buy one share? W
The Woods Co. and the Garcia Co. have both announced IPOs at $40 per share. One of these is undervalued by $8, and the other is overvalued by $5, but you have no way of knowing which is which.
A proposed new investment has projected sales of $830,000. Variable costs are 60% of sales, and fixed costs are $181,000; depreciation is $77,000. Prepare a pro forma income statement assuming a tax
Based on the forward price, is this put option in the money, out of the money or at the money? What are the intrinsic value and time value of the option?
Marcel Co. is growing quickly. Dividends are expected to grow at a 21 percent rate for the next 3 years, with the growth rate falling off to a constant 5 percent thereafter.
Determine the car payment and mortgage payment with the following conditions: your monthly household income, 10 percent for the car payment, and 28 percent for the mortgage payment. Also, assume a 1
What is the profitability index of a capital investment project that cost the firm $100,000 and has cash flows of $20,000, $25,000, $40,000, $50,000 in years one through four, respectively? The cost
Harris and Smith Incorporated's balance sheet shows total fixed assets of $50,000, total current and long term debt (including current liabilities) of $25,000, common stock of $20,000, and retained
White Wedding Corporation will pay $3.05 per share dividend next year. The company pledges to increase its dividends by 5.25 percent per year, indefinitely.
What is the ex-rights stock price? What is the price of one right? When will the price drop occur? Why will it occur then?
Calculate the future value of the following: What conclusions can be drawn about the frequency of compounding interest? What conclusions can be drawn about the length of time an amount is compoundin
So Much, Inc., has declared a $4.60 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15 percent. New IRS regulations require that taxes be withheld at the time the
Assume Poland's currency (the zloty) is worth $.17 and the Japanese yen is worth $.008 what is the cross rate of the zloty with respect to the yen? That is, how many yen equal a zloty?
Williamson has projected sales to increase 50% and expects the new cost ratio to decrease by 2% due to increased efficiency. Assuming that Williamson wants to maintain an inventory turnover at 5.0,