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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
After contemplating the risk of Petscan stock, Gail is willing to hold the stock only if it provides an annual expected return of at least 13%. Should she buy Petscan shares or not?
Arkansas Instruments (AI) can purchase a sonic cleaner for $1,000,000. The machine has a five-year life and would be depreciated straight line to a $100,000 salvage value.
Calculating present values A 5-year annuity of 10 $7,800 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now.
Discuss how currency futures or options can be used to hedge your business in a foreign country. (Pick a foreign country, assume any business you want to do, describe a situation you face to hedge y
Calculate the price corresponding to the bid and the price corresponding to the asked above (report the prices as a percent of face value). Which price is higher? Why does this make sense?
A four year annuity payment of $500 per year, with payment begin in year 6, assuming a 10% discount rate. What is the value of the annuity in year 6? What is the value of the annuity today?
You wish to display a continuous series of data showing weekly fluctuations in sales. The chart you will select is the
What would be the effects of eliminating all securities laws and regulations? Consider the effects on insider trading, disclosures such as financial statements and public information, risk of invest
Prepare a balance sheet for Alaskan Orange Corp. as of December 31,2010, based on the following information: cash = $193,000; patents and copyrights = $847,000; accounts payable = $296,000;
A bank lends a firm $500,000 for one year at 8 percent and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is
Kindle Fire Prevention Corp. has a profit margin of 4.6 percent, total asset turnover of 2.3, and ROE of 19.14 percent. What is the firm's debt-equity ratio?
What do you think about using the forward rate to forecast the future spot rate? for or against? Why?
Based on the unlevered beta (BU) of the proxy firm, what beta (BL ) should Pizza Express use to evaluate the project?
A company has capital of $200 million. It has an EROIC of 9% forecasted constant growthj of 5%, and a WACC of 10%. What is its value of operations? What is its intrinsic MVA?
BIM wishes to finance this project using its traditional debt-equity ratio of 1.5. The issue cost of equity is 6% and the issue cost of debt is 1%. What is the total flotation cost?
The company's stock has a beta of 1.2, the risk-free rate is 7.5%, and the market risk premium is 4%. What is your estimate of the stock's current price?
Suppose that each of these values is equally likely to happen. What is the most likely value of the future spot exchange rate if the current rate is $1.5845/£?
Construct a table showing a comparison of data (including location, square footage, total price, price per square foot, and specifications), for both houses and then write a 3-4-page paper detailing
What is meant by daily earnings at risk (DEAR)? What are the three measurable components? What is the price volatility component?
Would the WACC be different if the equity for the coming year will all come in the form of retained earnings versus some equity from the sale of new common stock? Would the calculated WACC depend in
Suppose a firm estimates its WACC to be 10 percent. Should the WACC be used to evaluate all of its potential projects, even if they vary in risk? If not, what might be "reasonable" cost of capital f
What is the amount of total liabilities and equity that appears on the firm's balance sheet? What is the balance of current assets on the firm's balance sheet? What is the balance of current liabiliti
Discuss at least one advantage and one disadvantage of ex ante analysis and ex post analysis. Justify your answer with examples.
Belyk Paving Co. paid out $400,000 in cash dividends. Assume that no new investments were made in net fixed assets or net working capital, and no new stock was issued during the year. Calculate the