• Q : Estimating firm debt-equity ratio....
    Finance Basics :

    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?

  • Q : Forward rate to forecast the future spot rate....
    Finance Basics :

    What do you think about using the forward rate to forecast the future spot rate? for or against? Why?

  • Q : Unlevered beta of proxy firm....
    Finance Basics :

    Based on the unlevered beta (BU) of the proxy firm, what beta (BL ) should Pizza Express use to evaluate the project?

  • Q : Intrinsic mva....
    Finance Basics :

    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?

  • Q : Determining the total flotation cost....
    Finance Basics :

    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?

  • Q : Estimate of stock current price....
    Finance Basics :

    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?

  • Q : Value of the future spot exchange rate....
    Finance Basics :

    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/£?

  • Q : Construct a table showing a comparison of data....
    Finance Basics :

    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

  • Q : Daily earnings at risk dear....
    Finance Basics :

    What is meant by daily earnings at risk (DEAR)? What are the three measurable components? What is the price volatility component?

  • Q : How might dividend policy affect wacc....
    Finance Basics :

    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

  • Q : Cost of capital for average-low-risk projects....
    Finance Basics :

    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

  • Q : Determining amount of total liabilities and equity....
    Finance Basics :

    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

  • Q : Ex ante analysis and ex post analysis....
    Finance Basics :

    Discuss at least one advantage and one disadvantage of ex ante analysis and ex post analysis. Justify your answer with examples.

  • Q : Computing firm new long-term debt....
    Finance Basics :

    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

  • Q : Depreciates versus the foreign currency....
    Finance Basics :

    While a U.S. investor is holding a foreign stock denominated in a foreign currency, will that investor have a higher return if the U.S. dollar (A) appreciates versus the foreign currency, or (B) dep

  • Q : Implied market capitalization rate....
    Finance Basics :

    Blue Heron Corp. is expected to pay a dividend of $2.50 a share next year. The dividends are expected to grow at the rate of 6% annually. If the current stock price is $60, what is the implied marke

  • Q : Cost-volume-profit analysis-concept of operating leverage....
    Finance Basics :

    What are the aim, usefulness, and shortcomings of a) cost-volume-profit analysis and b) the concept of operating leverage?

  • Q : Type of tax-supply of cookbooks....
    Finance Basics :

    What type of tax is this? Explain. What happens to the supply of cookbooks? What happens to the equilibrium price? Who pays the tax at the end?  

  • Q : Determining the financial factorsp-dell computer....
    Finance Basics :

    Dell Computer is considering changing their dividend policy to attract investors. Dividends suggest a stable company with solid earnings and good projections over a future period of years.  

  • Q : Determining the net income....
    Finance Basics :

    Taylor, Inc. has sales of $11,898, total assets of $9,315, and a debt-equity ratio of 0.55. If its return on equity is 14 percent, what is its net income?

  • Q : Analysis of the bond....
    Finance Basics :

    Doug has been approached by his broker to purchase a bond of $850. He believes the bond should yield 10%. The bond Pays 7% annual coupon rate and has 12 years left until maturity. What should doug's

  • Q : Range of yield to maturity....
    Finance Basics :

    How do you calculate a range of yield to maturity (YTM) when you have a 5year-fixed term deposit at a bank. You get a fixed interest rate 4% p. a. for the first half of your deposit.

  • Q : Value of euro-denominated loan principal....
    Finance Basics :

    The exchange rate on this date was 0.77euros/$. Assume no repayment of principal and an exchange rate today of 0.74euros/$. What is the current value of the CD principal ? What is the current value

  • Q : Estimating continuous compounding....
    Finance Basics :

    If your 15 year-old daughter's wedding is going to cost you and estimated $35,000 in 7 years, how much money should you set aside today on a saving fund earning 5.5% per year with continuous compoun

  • Q : Firm cash coverage ratio....
    Finance Basics :

    A firm has EBIT of $300,000 and depreciation expense of $12,000. Fixed charges total $44,000. Interest expense totals $7,000. What is the firm's cash coverage ratio

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