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If you look at stock prices over any year, you will find high and low stock price for the year. Instead of single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use th
Professors Harry Markowitz and William Sharpe got their Nobel Prize in economics for their contributions to the?
Equity is a measure of monetary contributions which have been made directly or indirectly on behalf of the owners of company.
Dime a Dozen Diamonds produces synthetic diamonds through treating carbon. Each diamond can be sold for $120. The materials cost for a standard diamond is $70.
A company issues 15-year, $1,000 par-value bonds, with coupon rate of 5%. The bonds are sold for $619.70. The tax rate is 30%. Evaluate the cost of debt before taxes and after taxes.
You are a board member of Ace Global Institute, a university in United States. You are in the first level of negotiation to get a university in Canada?
Real Capital Co. has capital structure, based on current market values, that comprises 27 percent debt, 10 percent preferred stock, and 63 percent common stock.
Suppose the economy consisted of three kinds of people. 50% are fad followers, 45% are passive investors (they have read this book and so hold market portfolio), and 5% are informed traders.
Portland Boat Limited’s bank statement for the month of November showed the balance per bank of $7,000. The company's Cash account in the general ledger had the balance of $5,659 at November 3
Assume you held the bond in (c) for 6 months, at which time you acquired a coupon payment and then sold the bond for price of 102 (per $100 of face value). What would be annualized holding period re
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%.