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Trivoli Industries plans to issue some $100 par preferred stock with an 11 percent dividend.
A company’s 6 percent coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $515.16.
If the firm’s bonds earn a return of 12 percent, what will rs be using the bondyield-plus-risk-premium approach?
The company pays out 40 percent of its earnings as dividends, and the stock sells for $36.
Sidman Products’ stock is currently selling for $60 a share. The firm is expected to earn $5.40 per share this year and to pay a year-end dividend of $3.60.
Why is it sometimes misleading to compare a company’s financial ratios with those of other firms that operate in the same industry?
What will be the firm’s quick ratio after Petry has raised the maximum amount of short-term funds?
The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, an inventory turnover of 6 times, total current assets of $810,000.
Additional funds needed (AFN); AFN formula; capital intensity ratio. Pro forma financial statement; percent of sales method.
Suppose a firm makes the following policy changes. If the change means that external, nonspontaneous financial requirements.
Profit margins and turnover ratios vary from one industry to another. What differences would you expect to find between a grocery chain.
What would be the additional funds needed if the company’s year-end 2006 assets had been $4 million?
Pierce Furnishings generated $2.0 million in sales during 2006, and its yearend total assets were $1.5 million.
Financial ratio analysis is conducted by managers, equity investors, long-term creditors, and short-term creditors.
The current price of a stock is $20. In 1 year, the price will be either $26 or $16. The annual risk-free rate is 5 percent.
Describe the effect on a call option’s price caused by an increase in each of the following factors: (1) stock price, (2) exercise price.
The current price of a stock is $33, and the annual risk-free rate is 6 percent. A call option with an exercise price of $32 and 1 year until expiration.
Operating current assets; operating current liabilities; net operating working capital; total net operating capital.
While the balance sheet can be thought of as a snapshot of the firm’s financial position at a point in time, the income statement reports on operations.
Explain the difference between NOPAT and net income. Which is a better measure of the performance of a company’s operations?
An investor recently purchased a corporate bond which yields 9 percent. The investor is in the 36 percent combined federal and state tax bracket.
Corporate bonds issued by Johnson Corporation currently yield 8 percent. Municipal bonds of equal risk currently yield 6 percent.
Assume the firm receives an additional $1 million of interest income from some bonds it owns. What is the tax on this interest income?
Assuming that the investments are equally risky and that Shrieves chooses strictly on the basis of after-tax returns, which security should be selected?
Klaven is 100 percent equity financed, and it faces a 40 percent tax rate. What is the company’s net income? What is its net cash flow?