• Q : Improving the methods for valuing derivatives....
    Finance Basics :

    Make a suggestion for improving the methods for valuing derivatives so that the reporting becomes more transparent for investors.

  • Q : Estimating the wacc....
    Finance Basics :

    Given the following information for Huntington Power Co., find the WACC. Assume the company's tax rate is 35 percent. Debt: 5,000 6 percent coupon bonds outstanding, $1,000 par value, 25 years to matu

  • Q : Compute dollar amount of monthly breakeven revenue....
    Finance Basics :

    The financial managers of a firm have options when it comes to the capital structure of the firm. The usual components include short term debt, long term debt, preferred stock, and common stock.

  • Q : Calculating average price and par value....
    Finance Basics :

    In 2008, Pfizer had 12,000 million shares of common stock authorized, 8,863 million in issue, and 6,746 million outstanding (figures rounded to the nearest million). Its equity account was as follows:

  • Q : Calculating an abnormal return....
    Finance Basics :

    Here are alphas and betas for Intel and Conagra for the 60 months ending April 2009. Alpha is expressed as percent per month.

  • Q : Calculating npv of the loan....
    Finance Basics :

    A small business is receiving a five-year $1,000,000 loan at a subsidized rate of 3% per year. The firm will pay 3% annual interest payment each year and the principal at the end of five years.

  • Q : Estimating company cost of equity....
    Finance Basics :

    Chandeliers Corp. has no debt but can borrow at 7.4 percent. The firm's WACC is currently 9.2 percent, and the tax rate is 35 percent.

  • Q : Computing operating cash flow....
    Finance Basics :

    A project has a contribution margin of $5, projected fixed costs of $13,000, projected variable cost per unit of $12, and a projected present value break-even point of 5,500 units. What is the operati

  • Q : Calculating capital gains yield....
    Finance Basics :

    Today, you sold 200 shares of SLG, Inc. stock. Your total return on these shares is 12.5%. You purchased the shares one year ago at a price of $28.50 a share.

  • Q : Discuss two factors that may affect a person credit score....
    Finance Basics :

    Consider whether you would buy a used car from a person or from a dealership. What are the pros and cons of each and how does that relate to the chapter material?

  • Q : Questions about functions....
    Finance Basics :

    What applications do you think functions have for the business world? Can functions be used to predict next year's profits, or how much your company will grow?

  • Q : Analyzing and comparing the strategies....
    Finance Basics :

    Monica and her friend Linda each believe they have a superior savings plan. Monica saved $4,500 at the end of each year for 15 years and then let her money grow for 30 years.

  • Q : Calculate the amount to fulfill retirement goals....
    Finance Basics :

    Jordan wants to retire in 15 years when he turns 65. Jordan wants to have enough money to replace 75% of his current income less what he expects to receive from Social Security at the beginning of eac

  • Q : Evaluate the vulnerability of company....
    Finance Basics :

    Evaluate the vulnerability of each company to external forces such as a recession, higher interest rates, and global competition. Based on the financial trends of each company,

  • Q : Calculate the future value of income....
    Finance Basics :

    Tina, age 50 is an accountant. She earns $50,000 a year. After consulting with you, she concludes that she can live on 70% of her current salary if she were to retire today.

  • Q : Computing daily and annual compounding....
    Finance Basics :

    Calculate the difference between daily and annual compounding, given the following information;

  • Q : Models for valuing derivatives....
    Finance Basics :

    The derivatives market is complex because derivative buying and selling includes many things like financial contracts, including debt and structured debts and deposits, swaps, other obligations,

  • Q : Compute the total variable costs....
    Finance Basics :

    A firm is reviewing a project with labor cost of $9.90 per unit, raw materials cost of $22.63 a unit, and fixed costs of $8,000 a month. Sales are projected at 10,000 units over the three-month life o

  • Q : Implications on under pricing efficient market hypothesis....
    Finance Basics :

    Most initial public offerings (IPO) are made with the assistance of an investment banker. The main activity of an investment banker is underwriting the issue.

  • Q : Compute maximum price for a non-constant growth stock....
    Finance Basics :

    What is the maximum price that you would be willing to pay for a non-constant growth stock that has the following characteristics:

  • Q : Describes the main aspects of the regulatory environment....
    Finance Basics :

    Describes the main aspects of the regulatory environment which will protect the public from fraud within corporations. Pay particular attention to SOX requirements.

  • Q : Find the lowest possible average cost of capital....
    Finance Basics :

    Brachman Builders is a large international construction firm that wants to raise up to $60 million to finance expansion. Brachman desires to maintain a capital structure that is 50% debt and 50% equit

  • Q : Requirements for qualified plans....
    Finance Basics :

    Which of the following statements concerning retirement plan service requirements for qualified plans is NOT correct?

  • Q : Calculating net operating profit after taxes....
    Finance Basics :

    By maximizing the earnings of the firm we will ensure that the price per share of common stock is maximized, hence shareholders' wealth will also be maximized.

  • Q : Estimating qualified plan....
    Finance Basics :

    An employer wishes to establish a qualified plan in which the annual contribution is a percentage of each participant's compensation. The work force is large, middle-income and mostly young to middle

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