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The company has $200,000,000 in common stock equity with an estimated 10% annual cost of capital. You recently issued $100,000,000 in corporate bonds that currently pay a 6% annual yield. Finally, you
What is the expected dollar rate of return on dollar deposits with today's exchange rate at $1.10 per euro, next year's expected exchange rate at $1.165 per euro, the dollar interest rate at 10%, an
The real exchange rate, q, is defined as: the price of the foreign basket in terms of the domestic one.
What is the opportunity cost of a checking account that requires a $500 minimum balance to avoid service charges? Assume an interest rate of 4%.
Research the Glass Steagall Act (1933) and the Financial Services Modernization Act (1999/2000). Using at least 5 references, analyze the result of deregulation and the impact on global finance. Pre
What is the proportion of total sales represented by foreign sales? How has this changed over the past five to ten years? What efforts has the company recently undertaken to increase or decrease glo
You have discovered that the price of a bond rose from $975 to $995 when the yield to maturity fell from 9.75% to 9.25%. What is the duration of the bond?
While there are risks associated with the use of additional and excessive leverage, what advantages exist besides its use to fund operations (without affecting equity)?
What are the formulas for dividend payout, dividend yield, total return, annualized holding period yield, book value, and market-to-book ratio? Please cite your resource
When a corporation uses excess cash to buy back its own shares of stock, the result is:
Money, Inc. has no debt outstanding and a total market value of $225,000. Earnings before interest and taxes, EBIT, are projected to be $19,000 if economic conditions are normal.
The most recent financial statements for Tool Co. are shown here:What is the maximum increase in sales that can be sustained assuming no new equity is issued?
What are inflation-indexed notes and bonds? Please explain these securities.
The company expects that the project will produce positive cash flows of $5,050,000 a year at the end of each of the next 15 years. The project's cost of capital is 14%. Calculate the expected net p
Let's discuss the different types of financial success standards that an organization may set. Which do you think is used most often and why? What types of standards do you use at work or at home? H
Astro Investment Bankers offers Lunar Vacations the following options on its initial public sale of equity: (a) a best efforts arrangement whereby Astro will keep 2.5% of the retail sales or
Up-Front Bank uses discount loans for all its customers who want one-year loans. Currently, the bank is providing one-year discount loans at 8%. What is the effective annual rate on these loans?
The shareholders of Unicorn Company need to elect seven new directors. There are 600,000 shares outstanding currently trading at $39 a share.
Determining Interest and Approximate Bond Value. Assume that three years ago, you purchased a corporate bond that pays 9.5 percent. The purchase price was $1,000. Also assume that three years after
Thirsty Cactus Corp. just paid a dividend of $1.20 per share. The dividends are expected to grow at 15 percent for the next eight years and then level off to a 5 percent growth rate indefinitely.
What sort of decision making processes would these foreign manufacturers of products use? And what sort of variables would these foreign manufacturers of products as diverse as automobiles, film and
New Business Ventures, Inc. has an outstanding perpetual bond with a 10% coupon rate that can be called in one year. The bond makes annual coupon payments.
You buy a zero coupon bond at the beginning of the year that has the face value of $1,000, a YTM of 7%, and 25 years to maturity. If you hold the bond for the entire year, how much in interest incom
Explain the dilemma faced by banks when determining the optimal amount of capital to hold. A bank's capital is less than 10 percent of its assets.
targeted profit margin on sales (the goal might be to achieve a 10% profit margin), how might management achieve these goals? What are the downsides to using these financial targets to determine bon