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If economy is strong, firm will sell 2,000,000 gadgets. If economy enters the recession, firm will sell only half as many gadgets. If economy enters the recession, determine the after-tax profit of
If selling price can be decreased by $1.25, find out the new breakeven in quantity and dollars? What method would you suggest to Mr. Smith, President and CEO of The Sports Cap Co., and explain why?
A call option on the asset has the delta of 0.3. Trader has sold 3,000 options and wishes to create a delta-neutral position.
Compute PV of dividend. Compute the price of the put option.
By using relative sales value method, compute joint product cost which would be allocated to Kappa and Sigma. How do you know if one of the products must be further processed?
Firm can borrow at 8%, and corporate tax rate is 34%. What is the suitable discount rate for valuing the lease?
What is the optimal capital structure of company, and what is the firm’s cost of capital at this optimal capital structure?
Why must financial decision makers get a good approximation of the firm’s cost of capital? What are the outcomes of utilizing the discount rate which is higher or lower than a firm’s tru
Evaluate discounted cash flow (DCF) and non-discounted cash flow capital budgeting techniques. If you were to estimate a project, which one of these techniques would you employ?
What is meant by operating leverage? How is it calculated? Why is it significant to the analysis of capital expenditure projects?
Describe how do companies minimize their foreign currency exposure? What is genuine choice analysis? Why is significant in M&A activities or is it?
It has been said that anyone with the pencil can compute financial ratios, but it takes a brain to understand them. What must financial analysts remember when estimating the financial statements of
Moonstar is considering a main change in its capital structure. Firm plans to issue $3 billion in new debt and buy back stock. This will cause the firm’s debt rating to fall to CCC. (CCC debt
Write down the differences and similarities between NPV and PI.
If yen fell against dollar such that one dollar would buy 154.4 yen when invoice was paid, compute dollar amount would Yates really receive after it exchanged yen for U.S. dollars?
What is Hightop’s after-tax cost of debt? What is Hightop’s cost of preferred equity?
Analysts believe that future dividends will grow at the 14% rate. The constant dividend growth rate is 4%. What would the stock price be?
Find 3-4 articles which interest you and which are clearly related to subject matter of this course: Risk management and insurance.
Compute each project’s Internal rate of Return (IRR).
What is the required rate of return for the preferred stock? How does the rate compare to the yield to maturity for the DHL 91/8 percent bond? Is this difference what you have expected from a risk/ret
Calculate the intrinsic levered price-to-book ratio and enterprise price-to-book and show that the two are related in the following way.
"Mind Your Own Finances" from the book Managing Your Personal Finances, what are the main considerations when setting financial goals?
The following are partial financial statements for an industrial firm that you are required to analyze and value. All amounts are in millions of dollars. Income Statement for Fiscal Year 2004
University. For more specifically you have been asked to discuss the merits of paying dividends or buying back shares in payout policy for listed and unlisted companies with focus on Belize.