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Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year.
Your division is considering two investment projects, each of which requires an up-front expenditure of $28 million. You estimate that the cost of capital is 8% and that the investments will produce t
Suppose you know that your firm is facing relatively poor prospects but needs new capital. If you also know that investors do not have this information, signaling theory would predict that you would:
Stock of CCC Industries has a beta of 1.1. The market risk premium is 7 percent, and T-Bills are currently yielding 4.5 percent. The company's most recent dividend was $1.70 per share,
Jones, Inc. is trying to determine the cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments an
Have there been any subsequent events, errors and irregularities, illegal acts, or related-party transactions that have a material effect on the financial statements?
Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $1,976,521, have a life of five years,
Red Rocks Corporation currently has 425,000 shares of stock outstanding that sell for $80 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:
Gangland Water Guns Inc. is expected to pay a dividend of $2.10 one year from today. If the firm's growth in dividends is expected to remain at a flat 3% forever,
Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization expenses amounted to $84 million. The firm has 135 million shares outstanding and a share price of
Titan Football Manufacturing had he following operating results for 2014: sales=23,730, cost of goods sold= 16,780, depreciation expense=2,840, interet expense=414, dividends paid =616,
If Air Atlantic enters a 12-year lease with annual (end of year) payments of $500,000, what is the present value of the lease payments if the interest rate is 14%.
The market for foreign exchange can be viewed as a two-tier market. One tier is the wholesale or interbank market and the other tier is the retail or client market. International banks provide the cor
At the beginning of the year, the net assets of Platinum & Steel Products were $334,500. The only transactions affecting stockholders' equity during the year were net income of $48,000 and dividen
A project currently generates sales of $10.5 million, variable costs equal to 60% of sales, and fixed costs of $2 million. The firm's tax rate is 40%.
Good old XYZorp is considering two mutually exclusive projects, A & B in order to expand their product line. After letting the cost accountants out of their cages,
We are looking at models in finding fair values of stock which may leave the impression that stock prices should not change much. As of late there have been large shifts in the prices of stock in the
The inventory turnover for this industry averages six times. If all of Vanity's sales are on credit, what average level of inventory should the firm maintain to achieve the same inventory tu
What is meant by the term "self-supporting growth rate?" How is this rate related to the AFN equation, and how can that equation be used to calculate the self-supporting growth rate?
You are planning to invest $10,000 in ABC's bonds. Right now the stated rate of the bonds is seven percent, and the market rate is eight percent.
Grider Industries, Inc. issued $8,000,000 of 8% debentures on May 1, 2012 and received cash totaling $7,098,102. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these
ABC received $1,075,736 including accrued interest when they issued bonds on April 1, 2011. The bonds had a face value of $1,000,000 and 9% interest payable annually on Jan 2, and maturing Jan 2, 2021
Using the data in the following table for a number of firms in the same industry, do the following: Compute the total asset turnover, the net profit margin, the equity multiplier, and t
Pacific Fixtures lists the following accounts as part of its balance sheet. Compute the return on stockholders' equity if the company has sales of $20 million and the following net profit margin:
Suppose we look in the newspaper and find the following rates: the rate on 1-year securities is 4.65%, on a similar 2-year security 6.24%, and a 3-year security 6.67%.