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Aggie has a 35% corporate tax rate. Investors face a 20% tax rate on debt receipts and a 15% rate on equity. Determine the value of Aggie.
You just found your dream car. The car will cost you $36,800. The dealer will lend you the entire amount at 3.9 percent interest, compounded monthly, for 48 months. What is the amount of the monthly
You would like to buy a boat and know you can afford boat payments of $225 a month for 5 years. The interest rate is 7.65 percent, compounded monthly. How much money can you afford to borrow?
Marcus, Inc. purchased a rare coin for $219,000 three years ago. Today, they resold that coin for $297,500. What annual rate of return did the firm earn on this investment?
What is firm-specific risk? Should an investor expect to be compensated for firm-specific risk in an efficient capital market? Why or why not?
What is the bid-ask spread? Would you expect it to be larger or smaller for more volatile stocks? Why?
Warren Buffett believes that "value will always in time be reflected in market price". Does this contradict with the beliefs of Graham and Buffet that you should always buy with a "margin of safety"
What did you learn from reading a summary of "A Random Walk Down Wall Street" and how will you apply it in your investing life? Is there anything that you don't agree with?
Dividend Reinvestment Plans (DRIPs) are rarely heard of, yet most publicly traded companies offer one. Briefly list the advantages of participating in a DRIP. Are there any potential disadvantages?
what do you think the stock price will range with a 95% probability over the next two months? what about the continously compounded rate of change in the stock price?
Graph the profit potential (if any) for this position. What is the maximum profit and the maximum loss the trader can incur? At what price of the stock does the diagonal spread break-even?
A firm has a debt to equity ratio of 0.6, a leveraged firm value of $9,200, a pre-tax cost of debt of 8 percent, a cost of equity of 16 percent, and a tax rate of 32 percent. What is the firm's weig
Discuss the lower bound for option prices and the put-call parity with and without dividend yields; and explain why.
Parker Inventmemts has EBIT of $20,000, interest expense of $2,900, and preffered dividends of $3,980. If it pays taxes of rate of 38%, what is Parker's degree of financial leverage (DFL) at a base
canvas reproductions has fixed operating costs of 12500 and variable operating costs of $5.51 per unit and sells its paintings for $22.39 each. at what level of unit sales will the company break eve
The company adheres to a constant rate of growth dividend policy. What will one share of this common stock be worth 11 years from now if the applicable discount rate is 8.0 percent?
Discuss the reliability of the yield curve as a basis for determining individual values of bonds (using an individual spot rate for each cash flow). How do spot rates imply investor expectations abo
Discuss how securities backed by title loans differ from securities backed by cash-flow generating assets in terms of risk and liquidity. How do high-yield bonds affect each type of security?
Suppose the interest rate falls to 9% right after the bond is purchased and stay at that level. What will be the holders's holding period yield if the bond is sold after 2 year?
Cull Incorporated recently borrowed $250,000 from Century Bank when the prime rate was 4%. The loan was for 90 days with interest to be paid at the end of the period with a rate fixed at 1.5% above
How much money will you have in savings when you retire in 15 years from now?
Given these conditions, what is the current value of your firm? What will be the new value of your firm if it takes on $100,000 in debt?
The forecast for your firm indicates there's a 25% chance that Net Income will be $15,000, a 50% chance it will be $20,000, and a 25% chance it will be $25,000.
The equipment has 4,050 hours of capacity per year. A sink uses an average of 2 hours of molding time; a tub uses and average of 5 hour of molding time.
Calculate the firm’s total-debt-to-assets ratio. Assume that the firm’s prior year-end total liabilties balance was $2.4 million and the firm's prior year-end total assets balance was $5 m