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The company has stated that it plans on issuing a dividend of $.50 a share at the end of this year and then issuing a final liquidating dividend of $2.05 a share at the end of next year. Your requi
The company adheres to a 60% dividend payout ratio and has a P/E ratio of 19. There are 21,000 shares of stock outstanding. What is the amount of the annual net income for the firm?
Calculate the firm's cash conversion cycle, its daily cash operating expenditure, and the amount of resources needed to support its cash conversion cycle.
As CFO of the acquiring company, what approaches would you use in merging the target companies finance department into your area of responsibility attempting to minimize the cultural differences? Wh
How do companies minimize their foreign currency exposure? What is real option analysis? Why is important in M&A activities or is it? What forces drive international M & A activity, and how a
You have a 1999 Nissan that is expected to run for another three year-Calculate the EAC for both Nissan and Hyundai. When should you buy the new Hyundai?
ver the course of the year, you received $2 in dividends and inflation averaged 2.7 percent. Today, you sold your shares for $54.2 a share. What is your approximate real rate of return on this inves
The lease terms, which include maintenance, call for a $12,000 lease payment (4 payments total) at the beginning of each year. DTC's tax rate is 40%. What is the net advantage to leasing?
The first $2 million will start today; at the end of the 5 years, the hospital will also receive a lump sum payment of $16 M. Assuming the cost of money is 4%, what is the value of this endowment in
Describe in general terms how future appreciation of the euro will likely affect the value (from the parent's perspective) of a project established in Germany today by a U.S.-based MNC.
Please explain market efficiency theory? What is strong-form efficiency? Which stock exchange would be an example for this type of market efficiency? What is semistrong-form efficiency? Which stock ex
What type of security is tax deductibility a characteristic? EPS dilution is a characteristic concern with equity (stock) or debt securities? Is the cost of debt financing higher or lower than equity
Define the hedging principle. How can this principle be used in the management of working capital?
A portfolio is made up of 75% of stock 1, and 25% of stock 2. Stock 1 has a variance of .08, and stock 2 has a variance of .035. The covariance between the stocks is -.001. Calculate both the varian
The bank has estimated that reserve requirements, deposit insurance fees, and uncollected balances reduce the amount of money available on checking deposits by 10% and on savings and time deposits b
There were 3,000 bonds issued and similar bonds are now selling to yield 12% annually. Zimmerman does not have preferred stock and the market value of equity is $3,000,000. Calculate the component w
After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions?
The extruder will require an expediditure of $12,000 for installation and $4,000 for training new operators. The new equipment will require an increase of $5,000 in inventory, $4,000 in accounts rec
A machine that originally cost $25,000 and was depreciated on a straight line basis has one year of its expected 5-year life remaining. Its current market value is $12,000. The corporate tax rate is
What is forward price? Six month later the price of the stock is $45 and risk free interest rate is still same. What are the forward prices and the value of the forward contract?
The corporate tax rate is 40%. If the economy is strong, the firm will sell 2,000,000 gadgets. If the economy enters a recession, the firm will sell only half as many gadgets. If the economy enters
Today, the market rate is 10% and each single bond is trading for $844.76. If ABC Inc. wants to raise new debt today, what would be ABC's marginal cost of debt? Assume no significant change in ABC's
List two investment products that a manager following a passive investment strategy could use to make an investment in the Standard & Poor's 500 Index. Briefly discuss which product is likely to
Compute the net present value of an investment with 5 years of annual cash inflows of $100 and two cash outflows, one today of $100 and one at the beginning of the second year of $50. Use a discount
Explain the differences and similarities between NPV and PI. Given the goals of firm value and shareholder wealth maximization, we have stressed importance of NPV.