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What alpha do the informed traders make? What is the alpha of the passive investors? What is the expected return of the fad followers? What alpha do the fad followers make?
Describe the key factors contributing to effective cash management within a firm. Why is the cash management process more difficult in a MNC? Discuss the pros and cons of a MNC having a centralized
The annual effective interest rate is 6%. Determine the accumulated value of these payments at time 20.
The June treasury bond futures contract has a quoted price of 102.12. Are current market interest rates higher or lower than the standardized rate on a futures contract?
What is the current domestic and international economic situation of each country relative to the benchmark performance measures for that country?
You have determined that the Castles currently have adequate life, health, auto, and homeowner's insurance. Which of the following forms of insurance is likely to fulfill their highest priority risk
It can raise up to $2 million in new debt with rd = 6%, all debt above $2 million will have rd= 8%, rs = 11% and re= 14% for any amount of new common stock that is issued. If the firms marginal tax
What is the After Tax Salvage Value (ATSV) of the old equipment that RDP should use in their capital budgeting analysis? Assume the tax rate = T= 35%.
The variable cost per toy is $11, and the firm incurs fixed costs of $286,000 each year. The corporate tax rate for the company is 34 percent. The appropriate discount rate is 12 percent. What is th
Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.4 million. What are the net cash flows of the project for th
Put the money in an interest-bearing checking account, which earns 2%. The FDIC insures the account against bank failure. Invest the money in a corporate bond, which a states return of 5%, but there i
The bonds sell at a price of $1,353.54, and their yield curve is flat. Assuming that interest rates in the general economy are expected to remain at their current level, what is the best estimate of
Your bank statement shows a balance of $670. Your checkbook register shows a balance of $462. You earned interest of $2 and had a service charge of $4. There are no outstanding deposits. What is the
Alson Enterprises needs someone to supply it with 185,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract.
Explain the history of the European Union by emphasizing on the most important dates. Discuss why those dates are so influential. What was its purpose? What has it achieved to do?
What are earnings per share? Book value per share? If the stock currently sells for $70 per share, what is the market-to-book ratio? The price-earnings ratio?
An investor purchases one municipal and one corporate bond that pay rates of return of 8.3% and 2% respectively. If the investor is in the 18.37% tax bracket, his after tax rates of return on the mu
Your firm is faced with paying a variable rate debt obligation with the expectation that interest rates are likely to go up. Using interest rate futures and interest rate swaps, identify two strateg
You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its
Over the last four years, the stock of Stephensen's Motors has had an arithmetic average return of 8.5 percent. Three of those four years produced returns of 8 percent, 19 percent, and 13 percent. W
Draw the market demand and supply of wine, and label the curves to show why the market out¬put is the efficient output. b. Suppose that the wine industry is consolidated into one large monopoly
Large Industries annual bonds are selling at 99 (i.e., the price is $990 for the $1,000 bond). There are 8 years remaining until maturity on the bonds and the yield to maturity is 7.75%. Find the co
Total liabilities, including preferred stock, equal PhP270,000. The firm has 15,000 shares of common stock outstanding. What is the liquidation value per share of common stock?
After two years, yields to maturity on identical securities are 8.00% per annum, compounded half yearly. What is the price of this Forest Investors bond in the market? Calculate your annual holding
Give an example of a situation where the management of a firm is acting in a manner that is contrary to the principal goal of financial management.