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Firms often involve themselves in projects that do not result directly in profits. For example, IBM and ExxonMobil frequently support public television broadcasts. Do these projects contradict the
Compute labor, material, machine and overhead productivity. Compute the overall productivity.
Dallas Company has a total value of $65 million. Its debt is in the form of zero-coupon bonds, which will mature in 9 years. The face value of bonds is $15 million. The riskless rate is 3.5% at pres
What are the Legal Rights and Privileges of Common Stockholders? What are possible capital components in the WACC equation? why WACC is important in the corporate finance world. How easy do you think
Doublewide Dealers has an ROA of 10 percent, a 2 percent profit margin, and an ROE of 15 percent. What is the total assets turnover? What is it's equity multiplier?
Assume that sales, operating costs, total assets, and the tax rate would not be affected, but the interest rate would rise to 8.0%. By how much would the ROE change in response to the change in the
Papa Roach Exterminators, Inc., has sales of $704,000, costs of $345,000, depreciation expense of $37,000, interest expense of $26,000, and a tax rate of 30 percent. If the firm paid out $80,000 in
Construct a balance sheet and estimate the annual take-home income of the Williams' family from the information presented below:
The customer's borrowing base is the product of these two entities. Calculate the customer's borrowing base in the situations described below:
Calculate the dollar value of the company's cash flows at an exchange rate of C$/US$.90; (2) Would the dollar value of the company's cash flows increase or decrease with an exchange rate of C$/US$.9
Ziegler's Supply has a beta of 1.06, a variance of .0124, a dividend growth rate of 2.8 percent, a stock price of $27 a share, and an expected annual dividend of $1.10 per share next year. The marke
Use the binomial option pricing model to find the value of a call option on £10,000 with a strike price of €15,000. The current exchange rate is €1.50/£1.00 and in the next per
Helen intends to invest in a project with initial cash outlay of 100000 and to sell it for 120000 six years later. She estimates that she will receive the following cash flows in the coming 6 years.
The best indication of the operational efficiency of management is
The company's stock has a beta equal to 2, the risk-free rate is 6.5 percent, and the market risk premium is 6 percent. What is your estimate is the stock's current price? Round your answer to the n
The text says that there is greater concern today about the possibility of deflation than there is about inflation. Do you agree? Why does the prospect of falling prices concern economists?
One tool of financial analysis is common-sized financial statements. Why do you think common-sized income statements and balance sheets are used?
Graser Trucking has $12 billion in assets, and its tax rate is 40%. Its basic earning power (BEP) ratio is 15%, and its return on assets (ROA) is 5%. What is its times-interest-earned (TIE) ratio?
After three years the dividend is expected to grow at a constant rate of 4% per year indefinitely. Stock holders require a return or 14% to invest in Bayboro's common stock. Compute the value of Bay
Irving Company has total value $325 million, and it has $100 million (face value) of zero-coupon bonds maturing after 10 years. The σ of Irving is .45 and the risk-free interest rate is 5%. Us
The year-end balance sheets shows an increase in deferred taxes of $2.6 million to a total of $14.2 million. What is Curative Technologies' after-tax cash flow for last year? Assume a marginal tax r
To raise capital, corporate officers have two basic sources of funding from which to choose: (1) debt (i.e., issue bonds, take out a loan) or (2) equity (i.e., issue more stock). What are the trade-
Bonner's new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring th
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?
What rate of return would you expect on a 1-year Treasury security, assuming the pure expectations theory is NOT valid? Disregard cross-product terms, i.e., if averaging is required, use the arithmeti