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Calculate the total variance for an increase of .15 in its beta? Calculate the total variance for an increase of 5% in its residual standard deviation?
Two stocks with actual returns as follows are being considered by an investor. Assist them by calculating the standard deviation and the coefficient of variation and advise them based on a compariso
Cardwell Corporation manufactures a variety of products. Last year, the company's variable costing net operating income was $63,900 and ending inventory increased by 900 units. Fixed manufacturing o
The book store's directors believe that the store should earn a profit margin of 10% on sales, and they want the store's managers to pay a royalty rate that will produce that profit margin. What roy
What is the probability of the stock returning more than -10%? What is the probability of the stock returning between -10% and +30%?
Alpha has an expected return of 13.0% and a beta of 1.50. The total value of your current portfolio is $90,000. What will the expected return and beta on the portfolio be after the purchase of the A
You manage an equity fund with an expected risk premium of 10.5% and an expected standard deviation of 16%. The rate on Treasury bills is 5.5%. Your client chooses to invest $69,000 of her portfolio
In the country of Drazah Larom (moral hazard spelled backward), health insurance is nonexistent and all medical markets are perfectly competitive. Use supply and demand analysis to explain the impac
Assume the sale of human organs is legalized and a free market develops. Furthermore, assume the market is in equilibrium. Trace through the price and output effects of the following: (unnecessary t
What is your company's weighted average flotation cost? What is the true cost of building the new assembly line after taking flotation costs into account? Does it matter in this case that the entire
Discuss those statements, being sure (a) to discuss the interrelationships among cost of capital, investment opportunities, and new investment and (b) to explain the implied relationship between di
McCanna Corp., a U.S. firm, has french subsidiary that produces wine and exports to various European countries. All of the countries where it sells its wine use the euro as their currency, which is
What are the four key facts in a firm's credit policy? How would an easy policy differ from a tight policy? Give examples how the four factors might differ between the two policies.
Explain the cash conversion cycle (CCC) and net working capital. Why is this important to the contemporary executive? How do executive decisions regarding CCC and net working capital affect the comp
Explain what capital structure is. Find two publicly traded companies and compare and contrast their capital structures.
Make a model that will help you price a bond in each of the following situations: For the sake of this exercise use 6% as the coupon rate, five years as the maturity, annual interest payments and a
Two years ago, you took out a 3-year, $60,000 interest-only loan. The interest rate on the loan is 7.5 percent and payments are to be made annually. What is the amount of the loan payment that is du
A 6-month put option on Makler Corp.'s stock has a strike price of $45 and sells in the market for $8.90. Makler's current stock price is $41. What is the exercise value of the option?
Describe and compare the market movement implications of options trading. Evaluate the risk of loss and the opportunity for profit when traders buy or sell puts and calls. Evaluate call and put option
Explain the process of cross-hedging. What are indicators of effective cross hedging? Evaluate how purchasers of financial futures contracts can offset their position and how their gain or loss is det
Bartley Barstools has an equity multiplier of 2, and its assets are financed with some combination of long-term debt and common equity. What is its debt-to-assets ratio? Round your answer to two dec
Which of the following statements concerning preferred stock is true? Preferred stockholders have a prior claim on the income and assets of the firm, as compared to the claims of lenders.
Calculate the present value of the future payoff, if the discount rate is 5%. Calculate the present value, if the discount rate is 6%
It can instead buy the truck for $50,000. The truck will be valueless after 7 years. The lease payments are an annuity due, so that the first payment comes immediately. What is the present value of
Calculate the present value of the payments, if you can borrow or lend funds at a 7% interest rate. Assume the product sells for $100.