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The firm had no amortization charges. What was the EBITDA coverage ratio?
How much do you need to raise the price of the set during the sale in order to earn your usual combined return on the sale and the financing?
Explain your view of financial management as it relates to decisions in the areas of capital budgeting, human resources needs, and health care policy?
Characteristics of corporate bonds include
Explain the five models of capital budget including the benefits and disadvantages of each model. Identify an ideal business scenario that would be appropriate for each model.
This system is expected to have a 5-year life and will be depreciated to zero using straight-line depreciation. What is the amount of the earnings before interest and taxes for this project?
What is the spread on this issue in percentage terms? What are the total expenses of the issue as a percentage of total value (at retail)? If the firm wanted to net $18 million from this issue, how
Southampton Publishing Corporation has tax rate of 40%, debt-to-equity ratio of 40%, and has (leveraged) beta of 1.25. The riskless rate is 9% and the market return is 16%. Victoria Publishing Compa
Assume a simple world in which the U.S. exports soft drinks and beer to France and imports wine from France. If the U.S. imposes large tariffs on the French wine, explain the likely impact on the va
Construct a Replicating Portfolio (RP) to replicate a 1.5-year Bond-0 that pays 11.59 percent of coupon per year. The available bonds for replication are: a one year zero coupon Bond-1, a 1.5-year B
The firm paid a down payment of 15 percent in cash and financed the balance. The loan terms require monthly payments for 15 years at an annual percentage rate of 7.75 percent, compounded monthly. Wh
What was the initial cost to Mitchell Labs to go private? What is the total value of the company from (1) the proceeds of the divisions that were sold, as well as (2) the current value of the 3 mill
What beta should Allen use in evaluating this project? What is the required return on the project if the riskless rate is 10% and the expected return on the market is 20%?
The company will maintain this dividend for the next eight years and will then cease paying dividends forever. If the required return on this stock is 10%, what is the current share price?
Discuss the effect of this change on the variability of the firm's net income stream, other factors being constant. Discuss how the change would affect your required rate of return on the common sto
Project B costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. Zellars, Inc.'s required rate of return for these proj
What are the differences between shareholder wealth maximization and profit maximization? If a firm chooses to pursue the objective of shareholder wealth maximization, does this preclude the use of
Discuss possible mistakes in the process of bond valuation and suggest a few best practices that could keep those mistakes from occurring.
What is the current PE ratio for each company? Pacific Energy Company has a new project that will generate additional earnings of $100,000 each year in perpetuity. Calculate the new PE ratio of the
You are thinking of building a new machine that will save you $5000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 3% per year forever. What is t
These could include any combination of new accounts receivable, accounts payable, inventory, or cash management strategies. One popular strategy is to simply stop paying the bills altogether. Discu
Today, at maturity, the exchange rate is 1.324 Swiss francs per dollar. What is the annualized rate of return to the Swiss investor?
Assuming that the security is held until maturity, the investor will receive $100,000 (face amount). Determine the percentage holding period return on this investment.
St. Vincent's Hospital has a target capital structure of 35 percent debt and 65 percent equity. Its cost of equity (fund capital) estimate is 13.5 percent and its cost of tax-exempt debt estimate is
Walters Umbrella Corp. issued 12-year bonds 2 years ago at a coupon rate of 7.8 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the Y