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You have $29,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 12 percent and Stock Y with an expected return of 9.5 percent.
The market value of Fords' equity, preferred stock and debt are $7 billion, $3 billion, and $10 billion, respectively. Ford has a beta of 1.8, the market risk premium is 7%, and the risk-free rate o
Ameritech Corporation paid dividends per share of $3.56 in 1992, and dividends are expected to grow 5.5% a year forever. The stock has a beta of 0.90, and the Treasury bond rate is
You are considering implementing a lockbox system for your firm. The system is expected to reduce the average collection time by 2.8 days. On an average day, your firm receives 2,419 checks with an
What is AT&T's average wage or salary paid to their workers/employees (not upper-level management)? For example, FDO (Family Dollar) paid their store managers less than $50,000 per year last yea
Mau Corporation stock currently sells for $58.32 per share. The market requires a return of 11.5 percent on the firm's stock. If the company maintains a constant 5 percent growth rate in dividends,
The newspaper reported last week that Bennington Enterprises earned $34 million this year. The report also stated that the firm's return on equity is 16 percent. Bennington retains 80 percent of its
Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $1.70 a share. The company has promised to maintain a constant dividend.
White Wedding Corporation will pay a $2.65 per share dividend next year. The company pledges to increase its dividend by 4.75 percent per year, indefinitely.
Denver Interiors, Inc., has sales of $836,000 and cost of goods sold of $601,000. The firm had a beginning inventory of $36,000 and an ending inventory of $47,000. What is the length of the invento
UPS has a beta of 1.2 and Walmart has a beta of 0.8. The risk-free rate of interest is 4% and the market risk premium is 7%. What is the expected return on portfolio with 40% of its money in UPS an
Your firm has preferred stock outstanding that pays a current dividend of $4.50 per year and has a current price of $59.30. You anticipate that the economy will grow steadily at a rate of 2% per ye
The market value of Ford's equity, preferred stock, and debt are 7billion, 3billion, and 10billion respectively. Ford has a beta of 1.8, market risk premium is 7%, and the risk-free rate of interest
Time Warner shares have a market capitalization of 55billion. The company just paid a dividend of 35cents per share and each share trades for 35dollars. The growth rate in dividends is expected to b
Coverall Carpets Inc. is planning to borrow 12,000 from the bank, The bank offers the choice of a 12 percent discounted interest loan ot a 10.19 percent add on, one year installments loan, payable
Picard Orchards reuires a 100,000 annual loan in order to pay laborors to tend and harvest its fruit crop. Picard borrows on a discount interest basis at a simple annual rate of 11 percent.
If a firm pays out 30% of its earnings as dividends and has averaged a 20 percent return on assets, how quickly can the firm grow without needing to secure outside funding sources?
Consider the following four-year project. The initial after-tax outlay is $550,000. The future after-tax cash inflows for years 1, 2, 3 and 4 are: $175,000, $250,000, $280,000 and $200,000, respecti
Show the project's operating cash flow statement for each year of operations. What is the expected non-operating terminal cash flow when the project is terminated at Year 5?
If the stock currently sells for $60, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends?What if you use the geometric average g
Some financial advisors recommend you increase the amount of federal income taxes withheld from your paycheck each month so that you will get a larger refund come April 15th.
A stock that currently trades for $70 per share is expected to pay a year-end dividend of $4 per share. The dividend is expected to grow at a constant rate over time. The stock has a beta of 1.4, th
Rate-Capped Swaps- Bull and Finch Company wants a fixed-for-floating swap. It expects interest rates to rise far above the fixed rate that it would pay and to remain very high until the swap maturit
Explain why some companies that issue bonds engage in interest rate swaps in financial markets. Why do they not simply issue bonds that require the type of payments (fixed or variable) that they pr