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A stock has had returns of 3 percent, 38 percent, 21 percent, -15 percent, 29 percent, and -13 percent over the last six years. The arithmetic and geometric returns for the stock
Inventory and accounts receivable will increase $420,000 to accommodate this sales level. The company has a steady profit margin of 10 percent with a 25 percent dividend payout. How much external fi
Stock Y has a beta of 1.3 and an expected return of 18.5 percent. Stock Z has a beta of .70 and an expected return of 12.1 percent. If the risk-free rate is 8 percent and the market risk premium is
You own a stock portfolio invested 25 percent in Stock Q, 20 percent in Stock R, 15 percent in Stock S, and 40 percent in Stock T. The betas for these four stocks
Based on the following information, the expected return and standard deviation for Stock A are __percent and __percent, respectively. The expected return and standard deviation for Stock
You have $22,600 to invest in a stock portfolio. Your choices are Stock X with an expected return of 22 percent and Stock Y with an expected return of 14.1 percent.
Discuss some of the positive and negative evidence used to establish the need for a valuation allowance for a tax loss carry-forward. Also, indicate the effect of the valuation allowance on the free
Calculate the net present value of the project in U.S. dollars. The interest rate is about 8.3 percent in the Philippines and 3 percent in the United States. Exchange rates are
Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not include the percent signs (%).
Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels o
Using pro-forma income statements to estimate earnings per share over using regression analysis has several advantages except which one of the following?
You bought one of Great White Shark Repellant Co.'s 8 percent coupon bonds one year ago for $1,030. These bonds make annual payments and mature six years from now
You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7 percent, -12 percent, 11 percent, 38 percent, and 14 percent.
Suppose a ten year ,1000 bond with an 8.9% coupon rate and semiannual coupons is trading for a price of $1034.52. If the bond's yeild to maturity changes to 9.4% APR, what will the bond's price be?
Expected cash divends are $2.50, the dividend yield is 7%, flotation cost are 5%, and growth rate is 3%. Compute the cost of new common stock.
A project has the following projected outcomes in dollars: $250, $350, and $500. The probabilities of their outcomes are 25%, 50%, nad 25% respectively. What is the expected value of these outcome
An investment is available that pays a tax-free 4%. The corporate tax rate is 50%. Total corporate income before earnings and taxes (EBIT) is $224 million forever. What is the maximum debt-to-equity
In the spot market 7.8 Mexican pesos can be exchange for 1 U.S. dollar. A compact disc costs $15 in the United States. If purchasing power parity (PPP) hold, what should be the price of the same dis
Explain principles of finance and how they relate to Omega Health Foundation's financial position. Compare and contrast net income and cash flows.
You have found three investments choices for a one-year deposit: 10% APR compounded monthly, 10% APR compounded annually, and 9% APR compounded daily. Compute the EAR for each investment choice. (A
A bond has 14 years left to maturity. It pays $40 semi-annual coupon and a par value of $1,000. The bond is callable in 5 years at a call price of $1050. The price of the bond is $1,075 as of today
What is the value of a corporate bond that has a par value of $1,000, an original maturity of 20 years, a coupon rate of 7% (pays interest annually), was issued two years ago, if bonds of similar ch
You are Kim's assistant, and she has asked you to prepare a memo to Chris describing the effect of each of the following bond features on the coupon rate of the bond. She would also like you to list
Sankey, Inc., is a fast growth stock and expects to grow at an annual rate of 35 percent for the next three years. It then will settle to a constant-growth rate of 10 percent. The first dividend wil
Compute IRR, NPV, and payback for both projects. Show all calculations. Based on your analysis, would you recommend the management to go ahead with Project A? Why or why not?