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Compute the Dividend Capture Yield assuming the stock is held for 60 days. How much would Commercial Paper after-tax yield have to be to earn the equivalent yield of the high yield dividend stock? Pl
Evaluate Wesley’s recognized gain on the sale. What is Wesley’s adjusted basis for new residence? Suppose instead that the selling price is $800,000. What is Wesley’s recognized gain
The value of an American Call Option on the company with 18 months to expiration and a $57.50 strike price. The risk-adjusted probability which a European put option on Braeburn having 18 months to e
Evaluate the arithmetic average returns for large-company stocks and T-bills during period. Evaluate the standard deviation of returns for large-company stocks and T-bills during this period.
We are calculating a project which costs $1,675,000, has a 6-year life, and has no salvage value. Suppose that depreciation is straight-line to zero over the life of project. Sales are projected at
Pappy’s Potato has come up with the new product, the Potato Pet (they are freeze-dried to last longer). Pappy’s paid $120,000 for a marketing survey to find out the viability of product.
Hooper Printing Inc. has bonds outstanding with 10 years left to the maturity. The bonds have a 7% annual coupon rate and were issued one year ago at their par value of $1,000. But, because of chang
Taussig Technologies Corporation (TTC) has been expanding at a rate of 20% per year in recent years. This same growth rate is anticipated to last for another two years, then decline to gn= 6%.
The Berndt Corporation anticipates having sales of $12 million. Costs other than depreciation are anticipated to be 75% of sales, and depreciation is anticipated to be $1.5 million.
On January 1, 2013, Mason Manufacturing Company began construction of building to be employed as its office headquarters. The building was completed on September 30, 2014.
What long position in the stock is necessary to hedge long put option if the strike price is $32? Give the number of shares purchased as percentage of the number of options purchased option.
You have been appointed as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of the fine zithers. The market for zithers is growing rapidly.
McGill Golf has decided to vend new line of golf clubs. The clubs will sell for $750 per set and have variable cost of $360 per set. The company has spent $150,000 for marketing study that determine
KHC is considering an investment project which needs a new machine for producing special tools. This new machine costs $1,000,000 and will be depreciated over 10 years on straight-line basis toward
The stock of S Corp is currently trading at the market price of $60 per share. Throughout the next two years the return on S Corp stock will have an annual standard deviation of 45%.
Which of the following is considered the capital component for purpose of computing the weighted average cost of capital (WACC)?
Kramerica Industries has bonds with the face value of $1,000 on market making semi-annual payments, with 10 years to maturity, and selling for $1,223.47. At this price, the bonds yield 6%. What is c
Weatherall Enterprises has no debt or preferred stock it is an all-equity firm and has a beta of 2.0. The chief financial officer is measuring a project with the expected return of a 14%, before any
The covariance of returns between Einstein stock and bohr stock is 0.0087. The standard deviation of Einstein is 0.26, and standard deviation of Bohr is 0.37. What is correlation coefficient between
The R&D dept. is planning to bid on the large project for development of the new communication system for commercial planes. The accompanying table demonstrate the activities, time & sequenc
Assume the change had halved, rather than doubled, the firm's depreciation expenditure. Now, what would be impact on net income, total profit margin, and cash flow?
What is current value of operations for Dozier? Assume that Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is intrinsic price per share?
Evaluate the disbursement float, collection float, and net floats in term dollars. When clear water glass has an opportunity cost equivalent to 10%, how much would it be willing to spend each year to
Suppose that the data refer to demand rather than sales using trend-adjusted smoothing with the initial forecast of 51 for week 8, the initial trend estimate of 3.
Which of the following is NOT a probable problem when estimating as well as using betas?