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Analysts project that price per ton could vary from $1,250 to $1,500. A September call option can be purchased with a $1,300 strike price for a premium of $145. What is Hershey's worst-case scenario
It can borrow at a rate of 7.5%, but the bank requires it to have a TIE of at least 4.0, and if the TIE falls below this level the bank will call in the loan and the firm will go bankrupt. What is t
Floyd Industries stock has a beta of 1.43. The company just paid a dividend of $0.90, and the dividends are expected to grow at 4 percent. The expected return of the market is 12 percent, and Treasu
Which of the following collective choice rules is likely to incur the highest political transactions costs (require the highest effort to reach an agreement)?
A payroll tax taxes a worker's wages at 14 percent until the worker earns $60,000 per year. All labor earnings in excess of $60,000 are not subject to tax. The tax rate structure of the payroll tax
Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables; and a 365-day year. Calculate the firm's operating cycle. Calculate the firm's cash conve
Since new stock has a higher cost than retained earnings, Bankston would like to avoid issuing new stock. Which of the following actions would REDUCE its need to issue new common stock?
The Gonzalez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its requir
Explain your views, especially along with what you have learned in this class, on mergers and acquisitions (M&As). Examine the related issues and implications both from the perspective of manage
Von Bora Corporation is expected pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year. You expect Von Bora's stock price to be $25.00 at the
An investor buys a U.S. Treasury bond whose current yield to maturity is 10 percent. The investor is subject to a 33 percent federal income tax rate on any new income received. His real after-tax re
The Motor Works is considering an expansion project with estimated annual fixed costs of $71,000, depreciation of $38,500, variable costs per unit of $16.25 and an estimated sales price of $26 per u
The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $765. What is the operating cash flow based on this analysis?
What is the net present value of a project that has an initial cash outflow of $33,800 and the following cash inflows? The required return is 16.40 percent.
The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year?
Use marginal cost-benefit analysis to make your decision regarding whether you should authorize the $10,000 expenditure to continue the project.
The IBBS Co. needs to raise $65 million to finance its expansion into new markets. The Company will sell new shares of equity via general cash offering to raise the needed funds. If the offer price
Again Inc is proposing a rights offering. Presently, there are 450,000 shares outstanding at $90 each. There will be 80,000 new shares offered at $84 each. What is the new market value of the compan
What will be the amount of interest paid in nominal dollars each year of the bond's life? What will be the face (nominal) value of the bond at the end of each year of its life?
Calculate the value of duration for a four-year, $1,000 par value U.S. Government bond purchased today at a yield to maturity of 15 percent. The bond's coupon rate is 12 percent, and it pays interes
The preferred stock has a market price of $33 a share compared to a price of $24 a share for the common stock. What is the weight of the preferred stock as it relates to the firm's weighted average
The US government provides a grant for $10,000 of the tuition. Moreover, the university pays $20,000 of the $30,000 tuition in salary to your instructors. Being in the program is so much fun, you wo
The bulldozer will need to maintain a small inventory of parts, $10,000, the keep it in the field with minimum down time. What is the total after tax cash flow for capital budgeting at the time of t
McConnell Corp has a book net worth of $10,380. Long-term debt is $7,500. Net working capital, other than cash, is $2,105. Fixed assets are $15,190. How much cash does the company have? If current
Suppose Shaan invested just $10,000 of his own money and had a $90,000 mortgage with an interest rate of 8.5 percent. If after three years he sold the property for $120,000.