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Martha’s Vineyard just paid a $3.60 yearly dividend on its common stock. This dividend rise at an average rate of 3.5 percent per year. The stock is currently selling for dollar 62.10 a share.
How much are you willing to pay for one share of stock if the company just paid an dollar .80 yearly dividend, the dividends increase by 4% yearly & you need an 8% rate of return?
Vertex bonds have a maturity value of $1,200. The bonds carry a coupon rate of 14%. Interest is paid semiannually. The bonds will mature in 7 years.
A corporate bond matures in 14 years. The bond has an 8% semiannual coupon and a par value of $1,500. The price of the bond today is $1,275.
Jeff Coleman just graduated. He plans to work for five (5) years & then leave for the Australian country. He figures that he can save dollar 3,500 a year for the first three years and $5,000 a yea
I have an investment of $1000 which accumulates 20 percent per year but on a DAILY basis. That means that every day the capital is rising by an additional $2.7777 [1000/360 = 2.7777].
If a portfolio of the two assets has a beta of 1.60, determine the portfolio weights? How do you interpret the weights for the two assets in this case? Explain your reasoning.
A beer distributor determines that it sells on average 100 cases a week of regular 12-oz. Budweiser. For this problem suppose that demand occurs at a constant rate over a fifty (50) week year.
You intend to buy a ten (10) year, $1,000 face value bond that pays interest of dollar 60 every six months. Its yield to maturity is ten percent with semiannual compounding.
Concept test of products, testing of marketing campaigns, sneak previews, and awareness tests are all examples of:
On August 1, 2007, Jarret Corporation purchased new equipment on a deferred payment basis. A down payment of $1,500 was made & 4 monthly installment of $2,000 each are to be made beginning on Sept
If a corporation buys a lot & building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the expenses of the building would depend
Assume Big Oil is excused from paying taxes. How would its weighted-average cost of capital change? Now assume Big Oil makes a large stock issue & uses the proceeds to pay off all its debt.
Central to the theory of agency is the notion that company will use optimal levels of contracting, monitoring & bonding to reduce agency costs. However, there are other ways by which agency value
A share of stock with a beta of 0.75 now sells for 50 dollar. Investors expect the stock to pay a year-end dividend of 2 dollar. The Treasury bill rate is 4%, and the market risk premium is 7%.
Style Corp. preferred stock pays dollar 3.15. What is the value of the stock if your required rate of return is 8.5 percent rounded to the nearest $1?
Which of the following would raise the likelihood that a company would raise its debt ratio in its capital structure?
Given the balance sheet & income statement for Simmons Maintenance Company, calculate the ratios requested below & indicate whether each is better or worse than the industry average.
You have been provided with the financial statements for Grannis Closet for the last three (3) years. Grannie is anxious that her net income has been decreasing,
Beta and required rate of return X stock has a required return of eleven percent; the risk free rate is seven percent; & the market risk premium is 4%.
You are given the following information on two (2) companies, M & N [figures are millions]: Find which company has the higher profit margin?
Calculate the following 10 financial ratios & provide a one sentence explanation of the analytic use of each ratio test. Demonstrate your formulas and input. Accuracy to two (2) decimal points is
Ratio analysis Data for Barry Computer Co. & its industry averages follow; Compute the indicated ratios for Barry.
Suppose that operating costs [excluding depreciation & amortization] are 55% of sales and depreciation and amortization and interest expenses will increase by 10%.
You are thinking adding a micro brewery on to one of your company’s existing restaurants. This will entail an increase in inventory of $8,000, and rise in accounts payables of $2,500, & an i