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Which of the following is NOT an argument for the Federal Reserve paying interest on excess reserve holdings?
When interest rates increase, what happens to the cash flows of the firm? What type of swap position would hedge the firm from interest rate risk?
What must he do to get these levels of income? What is his wealth in paper and cash for each level of desired dividend income level? Assume a world of no taxes
Assuming the dividend payout ratio is 20% and there are 1,000,000 shares outstanding, what is the current dividend per share? Fur- ther assuming that the ?rm does not change its stated dividend, wha
The company plans to do so again this year, during which SCC earned $100 million in net pro?ts after tax. If the company has 40 million shares outstanding and pays dividends quarterly, what is the c
What was the market's reaction to the self-reported earnings announcement? Briefly analyze the reported earnings per share; what is the company's earnings outlook for the coming year?
Determine the annual repayment schedule for the first two years for each of the following. Compare the payments required by each mortgage. What conclusions can you draw?
The September Eurodollar futures price is quoted as 92. How should the treasurer hedge the company's exposure?
Assume a call option with an exercise price of $80 and a risk free rate of 6%. If the call option is currently trading at $12, what is the risk neutral (riskless) rate of return that can earned using
Suppose that put options on a stock with strike prices of $30 and $35 cost $4 and $7 respectively. How can the options be used to create a (a) a bull spread and (b) a bear spread? Construct a table
The carrying cost is $0.03 per zen-zen per year. The order cost is $600 per order. What are the annual carrying cost, the annual ordering cost, and the optimal order quantity for the zen-zens? Verif
What are the implications of a change in the return on equity with an increase in debt financing? What is the relationship between business risk, financial risk, and beta (systematic or market risk).
Gamblers floatation expense on the new bonds will be $50 per bond. Gamblers marginal tax rate is 35%. What is the pre-tax cost of the debt for the newly issued bonds?
The yield on a five-year U.S. Treasury note is 1.95 percent, and the three-month U.S. Treasury bill rate is 0.11 percent. What is the estimated loan rate for the five-year bank loan?
Describe the objectives involved in the management of a bank's overall liquidity position and the costs to the bank of poor liquidity management.
The goal of most corporations is to maximize the value of stock. How does this goal interact with other goals like avoiding unethical or illegal behavior and what should you do about any potential c
It is estimated that Surfin' Bubba will have a growth rate in earnings of 10% into the foreseeable future. If Surfin' Bubba plans to raise new capital for expansion, what is the cost of new equity i
Create a persoanl secenario that exemplifies the time value of money that includes the opportunity cost involved
Discuss the sources of the apparent costless gains and the risks associated with writing covered calls.
If technical forecasting is used, will this result in a forecast of appreciation, depreciation, or no change in the value of a specific Latin American currency? Explain. Do you think that U. S. firm
Which of the following is an acceptable method of accounting for employee stock options?
The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to rise to $36 or fall to $26. Assume the risk-free rate is zero
Using the list from the back of your textbook, for the following 6 diagnostic financial performance categories, decide which ratios (2-3 for each diagnostic category listed) you wish to use.
ABC Electronics is considering an investment that will have cash flows of $16,000, $5,000 and $4,000 for years 1 through 3. What is the approximate value of this investment today if the appropriate
Discuss the difference in these two measurements of company activity. Which is most important to the business and why? What are the consequences a company may face if either of these is ignored?