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Donor makes a gift to the donee. Which of the following is true with respect to the basis of the property?
In June 2006, David pops the question and gives Rebecca a $30,000 engagement ring. They marry in October of 2006 at which time David transfers $100,000 into Rebecca's checking account. What is the v
If subordinated debt securities are being issued, compare new subordination provisions with the provisions for other agreements for compatibility. Review the latest borrowing base certificates. Inqu
If the investor buys the bond at the going price and holds it to maturity, what will be his or her yield to maturity? Suppose the investor sells the bond at the end of 10 years for $950. What is the
If the company waits one year, there is a 60 percent probability that the contract price will generate an after-tax cash flow of $500 per ounce and a 40 percent probability that the after-tax cash f
Distinguish between a Eurbond, a foreign bond, and a Yankee bond. Which of these three represents the greatest volume of security issuance?
How many of the old shares must be given up for one new share to achieve the $25 price, assuming this transaction has no effect on total market value?
Develop a three-year moving average to forecast sales in year 12. Develop a 3-year weighted average to predict demand in year 12. Sales in the most recent year is given a weight of 2 and sales in the
What is the mix of the debt and equity financing? What type and mix of financing would you recommend for the company? Why?
Donaldson & Son has an ROA of 10%, a 2% profit margin, and a return on equity equal to 15%. What is the company's total assets turnover? What is the firm's equity multiplier?
What are the goals of cash management for a business? Should those goals be the same for every kind of business? Why or why not?
Develop a proforma for dollar general stores. Increase fixed assets by 2.5 for the comming year. Improve fixed asset turnover. Decrease inventories by 15% through just in time program.
Charlotte, who is in the 35% ordinary tax bracket (Federal and state combined) pays a 15% capital gains rate on dividends and on capital gains for holding periods longer than 12 months, realized $8.
Explain default risk, inflation risk, and interest rate risk as they relate to bonds. Assume you are the advertising manager of your local bank. Which rate do you prefer to advertise on monthly-comp
What is the company's federal income tax bill for the year? Assume the firm receives an additional $1 million of interest income from some bonds it owns. What is the tax on this interest income?
The Johnson and Baker Company increased investments in foreign securities by $ 120,000, funded fixed asset acquisitions by $ 1,500,000, and sold $ 90,000 of long-term debt. Also, the firm had a net
Bond Corporation issued a R1 000 par value bond bearing a coupon rate of 16% and paying coupons semi-annually.This bond has three years remaining to maturity, and is currently priced at R940 per bon
Explain what happens to a company's cost of capital when the company has no debt, when it first takes on some debt, and as it increases the level of debt.
By how much will the net income change as a result of the change in depreciation? The company uses the same depreciation calculations for tax and stockholder reporting.
What is the net investment for an extruder that costs $42,000, if shipping costs are $1,500 and installation is $4,800? Assume this efficient machine is replacing an older extruder with a book and m
Calculating Costs and Break-Even night Shades Inc. manufactures biotech sunglasses. The variable material cost is $5.43 per unit, and the variable labor cost is $3.13 per unit.
Your firm has the following balance sheet statement items: total current liabilities of $805,000; total assets of $2,655,000; fixed and other assets of $1,770,000; and long-term debt of $200,000. W
DayTop is rated A and can borrow money at 5%. The risk-free rate is 4.5% and the market risk premium is 4%; the corporate tax rate is 40%. Estimate the cost of capital for DayTop Inns.
What were total production costs? What is the marginal cost per pair? What is the average cost?
What is a strategy for managing risk? What are some potential future risks? How would you develop strategies to mitigate these risks?