• Q : Calculate the rate of return....
    Finance Basics :

    The stock of Macbeth Cleaning Corp is selling for $25 a share. The company is expected to give a dividend of $.75 at the end of this year.

  • Q : Find the price earnings ratio....
    Finance Basics :

    RTR Corp. has reported a net income of 812,425 for the year. The company's share value is 13.45, & the company has 312,490 shares outstanding.

  • Q : Compute the initial return earned by investors....
    Finance Basics :

    Company X is executing an initial public offering with the given characteristics. The company will sell 10 million shares at an offer price of 25 per share, the underwriter will charge a 7% underwriti

  • Q : Determine the cost of equity and wacc....
    Finance Basics :

     Firm X and Y are identical in all respects except for their capital structure. Firm X is all equity financed with $800,000 in stock. Firm Y uses both stock and perpetual debt; its stock is worth

  • Q : Credit risk analysis of bonds....
    Finance Basics :

    Your task for this module is to use the concept of present value to your selected company. Assume your company is selling a bond that will pay you 1000 dollar in one yeSelect two other companies in th

  • Q : Calculate the value for the bond....
    Finance Basics :

    Your task for this module is to use the concept of present value to your chosen company. Assume your company is selling a bond that will pay you 1000 dollar in one year from today.

  • Q : Calculate the risk free rate and the expected return....
    Finance Basics :

    The expected value and standard deviation of the market portfolio are 8 percent and 12 percent, respectively. The expected return of security A is 6%. The standard deviation of security B is 18%, &

  • Q : Objective questions based on cost of capital and stock....
    Finance Basics :

    Tolan Co. purchased 60, 6 percent Irick Company bonds for $60,000 cash plus brokerage fees of $600. Interest is payable semiannually on July 1 and January 1. If 15 of the securities are sold on July 1

  • Q : Calculate the equilibrium expected return on a risky asset....
    Finance Basics :

    Assume a stock has a β of 1.2. Could this stock have a return of .10 in a given year? Calculate the equilibrium expected return on a risky asset with β of 1.2 with β of 0.6?

  • Q : Compute expected return and standard deviation of portfolio....
    Finance Basics :

    Assume that a fund that tracks S&P500 has the mean E(Rm) = 16 percent & the standard deviation σM = 10 percent, and assume that the T-Bill rate Rf = 80 percent.

  • Q : Calculate the risk free rate or the rate of return....
    Finance Basics :

    Assume that securities A & B are perfectly negatively correlated, with expected returns 8% and 12% and standard deviations 15 percent and 25 percent, respectively.

  • Q : Objective question on cost of capital & portfolio management....
    Finance Basics :

    Waters Corporation has a stock price of $20 a share the stock's year-end dividend is expected to be 2 dollar a share (D1 = $2.00). The stock's required rate of return is 15% & the dividend is expe

  • Q : Decision making questions on stock....
    Finance Basics :

    Suppose that you work for a corporation and discover that news of a new product it developed had contributed greatly to the recent increase in its stock value.

  • Q : Calculation of activity ratio, liquidity and solvency ratios....
    Finance Basics :

    These summarized data were obtained from the accounting records of Hamberg Company at the end of its fiscal year, September 30: Calculation of activity ratio, liquidity and solvency ratios

  • Q : Objective questions on investments and risk management....
    Finance Basics :

    A firm is conducting an analysis of trends over time and discovers that its inventory turnover has declined. This may be due to:

  • Q : Computation of ebit, growth and stock price....
    Finance Basics :

    Maxville Motors has annual sales of $15,000. Its variable costs equal 60 percent of its sales, and its fixed costs equal $1000. If the company's sales raise 10 percent, determine the percentage increa

  • Q : Find the correct statement....
    Finance Basics :

    Which of the following statements is most correct?

  • Q : Determine weighted average cost of capital....
    Finance Basics :

    The comfort corporation manufactures sofas and tables for the recreational vehicle market. The firm's capital structure consists of 60% common equity, 10 percent preferred stock, & 30% long term d

  • Q : Compute the weighted cost of capital....
    Finance Basics :

    The Ewing Distribution Company is planning a 100 million dollar expansion of its chain of discount service stations to many neighboring states. The expansion will be financed, in part, with debt issue

  • Q : Use capm to compute the cost of equity....
    Finance Basics :

    Compute the after tax cost of a 25 million dollar debt issue that Pullman Manufacturing Corporation (40% marginal tax rate) is planning to place privately with a large insurance company.

  • Q : Cost of capital for the funds needed to meet expansion goal....
    Finance Basics :

    The Comfort Corporation manufactures sofas and tables for the recreational vehicle market. The firm's capital structure consists of 60 percent common equity, Compute the cost of capital for the f

  • Q : Evaluation of expansion program.....
    Finance Basics :

    The Ewing Distribution Co. is planning a 100 million dollar expansion of its chain of discount service stations to several neighboring states. This expansion will be financed, in part, with debt issue

  • Q : Compute after tax cost of preferred stock....
    Finance Basics :

    Compute and describe the after-tax cost of preferred stock for a company which is planning to sell 10 million dollar of $4.50 cumulative preferred stock to the public at a price of $48 a share.

  • Q : Compute the cost of equity capital....
    Finance Basics :

    Compute the cost of equity capital using Constant growth rate dividend capitalization model approach and The capital asset pricing model approach.

  • Q : Cost of capital....
    Finance Basics :

    Atlas Inc. is planning to invest in a four year project which has the same risk as the firm's existing assets and operations. The project requires a 150,000 dollar initial investment and is expected t

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