Corporate finance. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
•
0 likes•49 views
WE PROVIDE CASE STUDY ANSWERS ASSIGNMENT SOLUTIONS PROJECT REPORTS AND THESIS ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM SMU / SYMBIOSIS / XAVIER / NIRM / PSBM / NSBM ISM / IGNOU / IICT / ISBS / LPU / ISM&RC / NMIMS /ISBS / MANIPAL / GARUDA / HIMALAYA IMT / IC MIND / IACT / UPES MBA - EMBA - BMS - GDM - MIS - MIB DMS - DBM - PGDM - BBM – DBA - PGDM www.mbacasestudyanswers.com www.casestudysolution.in aravind.banakar@gmail.com ARAVIND 09901366442 – 09902787224 9901366442 / 9902787224 / www.mbacasestudyanswers.com
Report
Share
Report
Share
Download to read offline
Recommended
Hw16 fin. mgmt.
This document contains 5 multiple choice questions about financial concepts related to managing working capital, including cash conversion cycles, accounts receivable and payable, and capital structure. Question 1 asks which statement is correct about the working capital financing policy of a company called Swim Suits Unlimited based on its peak and off-peak balance sheet data. Question 2 asks which statement is correct about managing accounts receivable. Question 3 asks about the likely total long-term debt and equity capital for a no-growth firm following a moderate working capital financing policy. Question 4 asks about calculating the cash conversion cycle for a growing firm based on inventory, sales, cost of goods sold, accounts receivable, and accounts payable information. Question 5 asks about the
LDI Nine Years On
This document discusses the evolution of liability-driven investment (LDI) strategies over nine years from initial immunisation approaches to more sophisticated holistic asset-liability management approaches. It also examines the growing toolkit of LDI assets available, including various types of swaps, linkers, and repo agreements. Finally, it provides an example of how changing market conditions like falling yields can impact the value of LDI strategies through roll-down and carry effects.
Uop fin 370 final exam guide
fin 370,uop fin 370,uop fin 370 complete course,uop fin 370 entire course, uop fin 370 week 1,uop fin 370 week 2,uop fin 370 week 3,uop fin 370 week 4,uop fin 370 week 5,fin 370 final exam guide new,fin 370 tutorials,fin 370 assignments,fin 370 help
Uop fin 370 final exam guide
fin 370,uop fin 370,uop fin 370 entire course,uop fin 370 entire class,uop fin 370 week 1,uop fin 370 week 2,uop fin 370 week 3,uop fin 370 week 4,uop fin 370 week 5,uop fin 370 tutorials,fin 370 assignments,fin 370 help,uop fin 370 learning team lowes,uop fin 370 strategic initiative paper lowe's,uop fin 370 final exam guide
Hw13 fin. mgmt.
This document contains 5 multiple choice questions regarding corporate valuation and discounted cash flow analysis. The questions calculate the value of company operations based on projected free cash flows, growth rates, and weighted average cost of capital. Correct answers are provided for each question.
Debt or Equity Financing : Stephenson Real Estate Recapitalization Case Study
Stephenson Real Estate is considering purchasing a tract of land for $60 million. It currently has no debt and is fully equity financed. The company's market value is $710 million with 20 million shares outstanding trading at $35.50 per share. Financing the purchase with debt would maximize the company's total market value compared to equity financing due to the tax shield benefits of interest payments.
Fin 370 final exam mcq`s correct answers 100%
This document provides the questions and multiple choice answers to the FIN/370 Final Exam. There are 30 questions covering topics like corporate goals, primary and secondary markets, shareholders as principals, financial management principles, accounting ratios, time value of money calculations, capital budgeting techniques, cost of capital, capital structure, and international finance. The document encourages leaving positive feedback and wishes the reader good luck on the exam.
Fin 370 final exam
This document provides the answers to a 30 question final exam for a finance course. It covers topics like corporate goals, primary vs secondary markets, agency theory, financial principles, accounting ratios, time value of money calculations, capital budgeting techniques, cost of capital, capital structure, and international finance.
Recommended
Hw16 fin. mgmt.
This document contains 5 multiple choice questions about financial concepts related to managing working capital, including cash conversion cycles, accounts receivable and payable, and capital structure. Question 1 asks which statement is correct about the working capital financing policy of a company called Swim Suits Unlimited based on its peak and off-peak balance sheet data. Question 2 asks which statement is correct about managing accounts receivable. Question 3 asks about the likely total long-term debt and equity capital for a no-growth firm following a moderate working capital financing policy. Question 4 asks about calculating the cash conversion cycle for a growing firm based on inventory, sales, cost of goods sold, accounts receivable, and accounts payable information. Question 5 asks about the
LDI Nine Years On
This document discusses the evolution of liability-driven investment (LDI) strategies over nine years from initial immunisation approaches to more sophisticated holistic asset-liability management approaches. It also examines the growing toolkit of LDI assets available, including various types of swaps, linkers, and repo agreements. Finally, it provides an example of how changing market conditions like falling yields can impact the value of LDI strategies through roll-down and carry effects.
Uop fin 370 final exam guide
fin 370,uop fin 370,uop fin 370 complete course,uop fin 370 entire course, uop fin 370 week 1,uop fin 370 week 2,uop fin 370 week 3,uop fin 370 week 4,uop fin 370 week 5,fin 370 final exam guide new,fin 370 tutorials,fin 370 assignments,fin 370 help
Uop fin 370 final exam guide
fin 370,uop fin 370,uop fin 370 entire course,uop fin 370 entire class,uop fin 370 week 1,uop fin 370 week 2,uop fin 370 week 3,uop fin 370 week 4,uop fin 370 week 5,uop fin 370 tutorials,fin 370 assignments,fin 370 help,uop fin 370 learning team lowes,uop fin 370 strategic initiative paper lowe's,uop fin 370 final exam guide
Hw13 fin. mgmt.
This document contains 5 multiple choice questions regarding corporate valuation and discounted cash flow analysis. The questions calculate the value of company operations based on projected free cash flows, growth rates, and weighted average cost of capital. Correct answers are provided for each question.
Debt or Equity Financing : Stephenson Real Estate Recapitalization Case Study
Stephenson Real Estate is considering purchasing a tract of land for $60 million. It currently has no debt and is fully equity financed. The company's market value is $710 million with 20 million shares outstanding trading at $35.50 per share. Financing the purchase with debt would maximize the company's total market value compared to equity financing due to the tax shield benefits of interest payments.
Fin 370 final exam mcq`s correct answers 100%
This document provides the questions and multiple choice answers to the FIN/370 Final Exam. There are 30 questions covering topics like corporate goals, primary and secondary markets, shareholders as principals, financial management principles, accounting ratios, time value of money calculations, capital budgeting techniques, cost of capital, capital structure, and international finance. The document encourages leaving positive feedback and wishes the reader good luck on the exam.
Fin 370 final exam
This document provides the answers to a 30 question final exam for a finance course. It covers topics like corporate goals, primary vs secondary markets, agency theory, financial principles, accounting ratios, time value of money calculations, capital budgeting techniques, cost of capital, capital structure, and international finance.
Devry fin 515 week 4 midterm
devry fin 515 week 4 midterm,devry fin 515 week 4 problem set,devry fin 515 week 4,devry fin 515 week 4,devry fin 515,devry fin 515 week 4 tutorial,devry fin 515 week 4 assignment,devry fin 515 week 4 help
Devry fin 515 week 4 midterm
devry fin 515 week 4 midterm,devry fin 515 week 4 problem set,devry fin 515 week 4,devry fin 515 week 4,devry fin 515,devry fin 515 week 4 tutorial,devry fin 515 week 4 assignment,devry fin 515 week 4 help
Fin 370 final exam
The document contains 30 multiple choice questions that appear to be from a finance exam. It covers topics such as corporate finance principles, financial statement analysis, time value of money, capital budgeting, cost of capital, capital structure, and international finance. The questions are designed to test students' understanding of key concepts in these areas of finance.
XIRR
This document discusses how to calculate and use XIRR (internal rate of return) to evaluate investment returns. It provides examples of calculating XIRR for insurance policies, gold schemes, and other investments. The key points are:
1) XIRR is a formula that calculates annualized return on investments with non-uniform cash flows. It is important for evaluating all investment decisions.
2) Calculating XIRR involves listing cash outflows and inflows with their dates.
3) Examples show calculating XIRR for insurance policies, gold schemes, and other investments to determine actual returns versus advertised returns.
4) Even a 3% improvement in returns using XIRR can significantly impact long-term
Devry fin 515 week 4 midterm
devry fin 515 week 4 midterm,devry fin 515 week 4 problem set,devry fin 515 week 4,devry fin 515 week 4,devry fin 515,devry fin 515 week 4 tutorial,devry fin 515 week 4 assignment,devry fin 515 week 4 help
Fin 370 fin/370 final exam 100% correct answers
The document contains 30 multiple choice questions that appear to be from a finance exam. It covers topics such as corporate finance principles, financial statement analysis, time value of money, capital budgeting, cost of capital, capital structure, and international finance. The questions have 4 potential answer choices labeled A, B, C, or D.
Debt and equity financing
The document discusses the cost of debt and equity financing. It provides an example where the cost of debt is calculated as 10.56% for a company borrowing $600,000 at an annual payment of $100,000 over 10 years. The cost of equity is calculated as 15.51% for a company with a beta of 1.39, risk-free rate of 3%, and market rate of 12%. The weighted average cost of capital is calculated as 13.55% based on the costs of debt and equity and the capital structure.
Private Investment Offerings
Empower offers a unique gateway for investors. In addition to portfolio management, we offer exclusive access to ground-level investment in corporate and private ventures. Our investors do not simply increase their wealth. They build the future.
Phi 107 final exam new 2016 phoenix
This document appears to be a practice exam for a PHI 107 course, containing 50 multiple choice questions covering various topics in business and finance, including capital budgeting techniques, the cost of capital, capital structure, and international finance. The full exam is not provided. The document promotes an online test preparation site where students can find solutions to entire courses, exams, and homework assignments.
FIN 370 FIN/370 Final Exam 100% Correct
This document provides the answers to a 30 question multiple choice final exam for FIN 370. It covers topics such as corporate goals, primary vs secondary markets, agency theory, financial principles, accounting ratios, time value of money calculations, capital budgeting techniques like NPV, IRR, payback period, cost of capital, capital structure, and international finance concepts.
Isbm corporate law.corporate finance mgmt.aravind 9901366442
MBA - EMBA - BMS - GDM - MIS - MIB
DMS - DBM - PGDM - BBM – DBA - PGDM
www.mbacasestudyanswers.com
www.casestudysolution.in
aravind.banakar@gmail.com
ARAVIND
09901366442 – 09902787224
WE PROVIDE ANSWER SHEETS & SOLUTIONS. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
Phi 107 final exam new 2016 phoenix
This document appears to be a practice exam for PHI 107 with 50 multiple choice questions covering various topics in business and finance including capital structure, capital budgeting, the cost of capital, and international finance. The questions assess understanding of concepts like the weighted average cost of capital, net present value, internal rate of return, capital budgeting techniques, the impact of leverage on a firm's capital structure, and foreign exchange.
Chartered finance. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
WE PROVIDE
CASE STUDY ANSWERS
ASSIGNMENT SOLUTIONS
PROJECT REPORTS AND THESIS
ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM
SMU / SYMBIOSIS / XAVIER / NIRM / PSBM / NSBM ISM / IGNOU / IICT / ISBS / LPU / ISM&RC / NMIMS /ISBS / MANIPAL / GARUDA / HIMALAYA IMT / IC MIND / IACT / UPES
MBA - EMBA - BMS - GDM - MIS - MIB
DMS - DBM - PGDM - BBM – DBA - PGDM
www.mbacasestudyanswers.com
www.casestudysolution.in
aravind.banakar@gmail.com
ARAVIND
09901366442 – 09902787224
9901366442 / 9902787224 / www.mbacasestudyanswers.com
Corporate finance management. 9901366442
CASE STUDY SOLUTIONS
CASE STUDY ANSWER SHEETS
CASE STUDY ANSWERS
CASE STUDY SOLUTION PAPERS
ARAVIND
09901366442 – 09902787224
• BMS ISBM CASE STUDY ANSWER SHEETS
• BMS ISBM CASE STUDY SOLUTIONS
• GDM ISBM CASE STUDY ANSWER SHEETS
• GDM ISBM CASE STUDY SOLUTIONS
• MBA ISBM CASE STUDY ANSWER SHEETS
• MBA ISBM CASE STUDY SOLUTIONS
• EMBA ISBM CASE STUDY ANSWER SHEETS
• EMBA ISBM CASE STUDY SOLUTIONS
• MBA CASE STUDY ANSWER SHEETS
• EMBA CASE STUDY ANSWER SHEETS
• DMS ISBM ANSWER SHEETS
• ISBM ANSWER SHEETS
• ISBM MBA ANSWER SHEETS
• ISBM EMBA ANSWER SHEETS
• ISBM DMS SOLUTIONS
ARAVIND
09901366442 – 09902787224
• IIBMS ANSWER SHEETS
• IIBMS MBA CASE STUDY ANSWER SHEETS
• IIBMS MBA CASE STUDY SOLUTIONS
• IIBMS EMBA CASE STUDY ANSWER SHEETS
• IIBMS EMBA CASE STUDY SOLUTIONS
• IIBMS DMS CASE STUDY ANSWER SHEETS
• IIBMS DMS CASE STUDY SOLUTIONS
• IIBMS MMS CASE STUDY ANSWER SHEETS
• IIBMS MIB CASE STUDY SOLUTIONS
• MBA IIBMS ANSWER SHEETS
• EMBA IIBMS CASE STUDY SOLUTIONS
ARAVIND
09901366442 – 09902787224
• IIBM MBA CASE LET ANSWER SHEETS
• MBA IIBM ANSWER SHEETS
• IIBM EMBA CASE LET ANSWER SHEETS
• EMBA IIBM ANSWER SHEETS
• IIBM MIB ANSWER SHEETS
• MIB IIBM CASE STUDY ANSWER SHEETS
• DMS IIBM ANSWER SHEETS
• IIBM DMS CASE STUDY SOLUTIONS PAPERS
• IIBM CASE STUDY ANSWER SHEETS
• IIBM MULTIPLE ANSWERS
ARAVIND
09901366442 – 09902787224
• KSBM ANSWER SHEETS
• KSBM SOLUTION PAPERS
• KSBM MBA ANSWER SHEETS
• KSBM MBA SOLUTION PAPERS
• KSBM EMBA ANSWER SHEETS
• KSBM EMBA SOLUTIONS
• KAZIAN MBA ANSWER SHEETS
• KAZIAN EMBA SOLUTIONS
• KAZIAN EMBA ANSWER SHEETS
• KAZIAN DMS ANSWER SHEETS
• MBA KSBM SOLUTION PAPERS
• EMBA KSBM ANSWER SHEETS
ARAVIND
09901366442 – 09902787224
• XAVIER ANSWER SHEETS
• XIBMS ANSWER SHEETS
• XAVIER SOLUTION PAPERS
• MBA XAVIER ANSWER SHEETS
• MBA XAVIER SOLUTION PAPERS
• EMBA XAVIER ANSWER SHEET
• EMBA XAVIER SOLUTIONS
• XIBMS MBA ANSWER SHEETS
• PGDBM XAVIER ANSWER SHEETS
• BMS XAVIER ANSWER SHEETS
• XAVIER BMS SOLUTION PAPERS
• DMS XAVIER ANSWER SHEETS
• XAVIER DMS SOLUTION PAPERS
ARAVIND
09901366442 – 09902787224
Bus 401 week 3 quiz version c
This document contains a 10 question quiz on topics related to corporate finance and capital budgeting. It includes questions about calculating cash flows, investment project evaluation methods like net present value and internal rate of return, and the cost of capital. The quiz also contains questions about capital structure, the time value of money, and depreciation.
1.Which of the following is considered a hybrid organizational for.docx
1.Which of the following is considered a hybrid organizational form?
Corporation
limited liability partnership
sole proprietorship
partnership
3. Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?
$1,844,022
$2,303,010
$2,123,612
$803,010
5. Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?
61.7 days
57.9 days
65.2 days
64.3 days
6. Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?
1.74
0
0.60
1.47
8. Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
$22,680
$26,454
$16,670
$19,444
9. PV of multiple cash flows: Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)
$2,735,200
$2,615,432
$2,431,224
$2,815,885
10. PV of multiple cash flows: Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
$480,906
$414,322
$477,235
$429,560
11. Future value of an annuity: Jayadev Athreya has started on his first job. He plans to start saving for retirement early. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years? (Round to the nearest dollar.)
$3,594,524
$5,233,442
$1,745,600
$2,667,904
12. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)
40%
12%
16%
32%
13. Bond price: Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company's bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)
$1,066
$923
$972
$1,014
14. PV of dividends: Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return is 14 pe.
Description Instructions Complete final exam.Ques.docx
Description / Instructions: Complete final exam.
Question 1
Which of the following is considered a hybrid organizational form?
sole proprietorship
partnership
corporation
limited liability partnership
Question 2
Which of the following is a principal within the agency relationship?
a company engineer
the CEO of the firm
a shareholder
the board of directors
Question 3
Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?
$803,010
$2,303,010
$2,123,612
$1,844,022
Question 4
Which of the following presents a summary of the changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period?
The statement of cash flows.
The statement of net worth.
The statement of retained earnings.
The statement of working capital.
Question 5
Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?
61.7 days
57.9 days
65.2 days
64.3 days
Question 6
Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?
0
0.60
1.47
1.74
Question 7
Which of the following is not a method of “benchmarking”?
Utilize the DuPont system to analyze a firm’s performance.
Conduct an industry group analysis.
Evaluating a single firm’s performance over time.
Identify a group of firms that compete with the company being analyzed.
Question 8
Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
$26,454
$19,444
$22,680
$16,670
Question 9
PV of multiple cash flows: Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)
$2,815,885
$2,615,432
$2,735,200
$2,431,224
Question 10
PV of multiple cash flows: Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
$429,560
$414,322
$480,906
$477,235
Question 11
Future value of an annuity: Jayadev At.
1.Which of the following is considered a hybrid organizational for.docx
1.Which of the following is considered a hybrid organizational form?
Corporation
limited liability partnership
sole proprietorship
partnership
3. Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?
$1,844,022
$2,303,010
$2,123,612
$803,010
5. Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?
61.7 days
57.9 days
65.2 days
64.3 days
6. Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?
1.74
0
0.60
1.47
8. Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
$22,680
$26,454
$16,670
$19,444
9. PV of multiple cash flows: Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)
$2,735,200
$2,615,432
$2,431,224
$2,815,885
10. PV of multiple cash flows: Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
$480,906
$414,322
$477,235
$429,560
11. Future value of an annuity: Jayadev Athreya has started on his first job. He plans to start saving for retirement early. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years? (Round to the nearest dollar.)
$3,594,524
$5,233,442
$1,745,600
$2,667,904
12. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)
40%
12%
16%
32%
13. Bond price: Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company's bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)
$1,066
$923
$972
$1,014
14. PV of dividends: Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return is 14 percent, what is the present value of their dividends over the ne.
Uop fin 370 final exam guide
This document contains a practice exam for the UOP FIN 370 course with 60 multiple choice questions covering topics like the cash cycle, time value of money, capital budgeting, cost of capital, and financial statement analysis. An online resource is provided for additional practice exams.
Uop fin 370 final exam guide
fin 370,uop fin 370,uop fin 370 complete course,uop fin 370 entire course, uop fin 370 week 1,uop fin 370 week 2,uop fin 370 week 3,uop fin 370 week 4,uop fin 370 week 5,fin 370 final exam guide new,fin 370 tutorials,fin 370 assignments,fin 370 help, fin 370 cash flow problem sets new,fin 370 final exam guide new,fin 370 final exam guide new,
AssetsLiabilitiesTotal Reserves$50,000Demand Deposits$18.docx
Assets
Liabilities
Total Reserves
$50,000
Demand Deposits
$180,000
U.S. Government Bonds
$110,000
Loans
$20,000
Assume the balance sheet above is for Eastlandia National Bank. The reserve requirement is 20%.
a. Given the current situation, how much money can Eastlandia National Bank lend to borrowers if it wants to keep all of its bonds?
b. Based on your answer in part (a), how much additional money can Eastlandia National Bank create? (Remember, how means how and why.)
c. Explain two reasons why the money supply may not increase by the amount you identified in part (b).
Spring 2013 Due Wed May. 15 by 4pm (my office)
1) Describe (in detail) the three forms of underwriting.
2) You want to set up an education trust for a relative starting in 2014. The trust will pay $25,000 a year starting in year 2022 and ending in year 2025. The stated annual percentage rate is 8% compounded annually.
a. How much will you have to invest in 2010 to achieve your objective?
b. How much will you have to invest each year from 2012 – 2017 to achieve your objective?
3) Samuelson Plastics has 7.5 percent preferred stock outstanding. Currently, this stock has a market value per share of $52 and a book value per share of $38. What is the cost of preferred stock?
4) Tidewater Fishing has a current beta of 1.21. The market risk premium is 8.9 percent and the risk-free rate of return is 3.2 percent. By how much will the cost of equity increase if the company expands its operations such that the company beta rises to 1.50?
5) Penn Corporation does not currently pay dividends. It is expected to begin paying dividends in year three (3) with a $2.50 dividend. This dividend is expected to grow at a rate of 14% for three years and then 6% every year after that forever. The required return on Penn’s stock is 16%. Calculate the price of Penn’s stock today.
6) Suppose Primerica has just paid a dividend of $1.75 per share. Sales and profits for Primerica are expected to grow at a rate of 5% per year. Its dividend is expected to grow by the same amount. If the required return is 12%, what is the value of a share of Primerica in 6 years?
7) IPOs typically experience underpricing. Describe (1) what is underpricing, (2) the evidence that underpricing occurs (be sure to include real world numbers/examples), and (3) why does underpricing occur.
8) Adelson's Electric had beginning long-term debt of $42,511 and ending long-term debt of $48,919. The beginning and ending total debt balances were $84,652 and $78,613, respectively. The interest paid was $4,767. What is the amount of the cash flow to creditors?
9) You arrived at work today to see the CFO, COO and most of the company’s top management team taken away in handcuffs. The only executive who was not arrested was the newly appointed CEO. Before you can even reach your cube, the CEO calls you into his office to explain some incomplete project an ...
Fin 370 final exam
This document appears to be a study guide or list of questions for a final exam in FIN 370. It includes 30 multiple choice or short answer questions covering various topics in finance, including: the goals of firms, primary and secondary markets, agency theory, principles of financial management, cash budgets, break-even analysis, present value, sources of financing, capital budgeting techniques like payback period and NPV, cost of capital calculation, capital structure, leverage, and international finance topics.
More Related Content
What's hot
Devry fin 515 week 4 midterm
devry fin 515 week 4 midterm,devry fin 515 week 4 problem set,devry fin 515 week 4,devry fin 515 week 4,devry fin 515,devry fin 515 week 4 tutorial,devry fin 515 week 4 assignment,devry fin 515 week 4 help
Devry fin 515 week 4 midterm
devry fin 515 week 4 midterm,devry fin 515 week 4 problem set,devry fin 515 week 4,devry fin 515 week 4,devry fin 515,devry fin 515 week 4 tutorial,devry fin 515 week 4 assignment,devry fin 515 week 4 help
Fin 370 final exam
The document contains 30 multiple choice questions that appear to be from a finance exam. It covers topics such as corporate finance principles, financial statement analysis, time value of money, capital budgeting, cost of capital, capital structure, and international finance. The questions are designed to test students' understanding of key concepts in these areas of finance.
XIRR
This document discusses how to calculate and use XIRR (internal rate of return) to evaluate investment returns. It provides examples of calculating XIRR for insurance policies, gold schemes, and other investments. The key points are:
1) XIRR is a formula that calculates annualized return on investments with non-uniform cash flows. It is important for evaluating all investment decisions.
2) Calculating XIRR involves listing cash outflows and inflows with their dates.
3) Examples show calculating XIRR for insurance policies, gold schemes, and other investments to determine actual returns versus advertised returns.
4) Even a 3% improvement in returns using XIRR can significantly impact long-term
Devry fin 515 week 4 midterm
devry fin 515 week 4 midterm,devry fin 515 week 4 problem set,devry fin 515 week 4,devry fin 515 week 4,devry fin 515,devry fin 515 week 4 tutorial,devry fin 515 week 4 assignment,devry fin 515 week 4 help
Fin 370 fin/370 final exam 100% correct answers
The document contains 30 multiple choice questions that appear to be from a finance exam. It covers topics such as corporate finance principles, financial statement analysis, time value of money, capital budgeting, cost of capital, capital structure, and international finance. The questions have 4 potential answer choices labeled A, B, C, or D.
Debt and equity financing
The document discusses the cost of debt and equity financing. It provides an example where the cost of debt is calculated as 10.56% for a company borrowing $600,000 at an annual payment of $100,000 over 10 years. The cost of equity is calculated as 15.51% for a company with a beta of 1.39, risk-free rate of 3%, and market rate of 12%. The weighted average cost of capital is calculated as 13.55% based on the costs of debt and equity and the capital structure.
Private Investment Offerings
Empower offers a unique gateway for investors. In addition to portfolio management, we offer exclusive access to ground-level investment in corporate and private ventures. Our investors do not simply increase their wealth. They build the future.
Phi 107 final exam new 2016 phoenix
This document appears to be a practice exam for a PHI 107 course, containing 50 multiple choice questions covering various topics in business and finance, including capital budgeting techniques, the cost of capital, capital structure, and international finance. The full exam is not provided. The document promotes an online test preparation site where students can find solutions to entire courses, exams, and homework assignments.
FIN 370 FIN/370 Final Exam 100% Correct
This document provides the answers to a 30 question multiple choice final exam for FIN 370. It covers topics such as corporate goals, primary vs secondary markets, agency theory, financial principles, accounting ratios, time value of money calculations, capital budgeting techniques like NPV, IRR, payback period, cost of capital, capital structure, and international finance concepts.
What's hot (10)
Similar to Corporate finance. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
Isbm corporate law.corporate finance mgmt.aravind 9901366442
MBA - EMBA - BMS - GDM - MIS - MIB
DMS - DBM - PGDM - BBM – DBA - PGDM
www.mbacasestudyanswers.com
www.casestudysolution.in
aravind.banakar@gmail.com
ARAVIND
09901366442 – 09902787224
WE PROVIDE ANSWER SHEETS & SOLUTIONS. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
Phi 107 final exam new 2016 phoenix
This document appears to be a practice exam for PHI 107 with 50 multiple choice questions covering various topics in business and finance including capital structure, capital budgeting, the cost of capital, and international finance. The questions assess understanding of concepts like the weighted average cost of capital, net present value, internal rate of return, capital budgeting techniques, the impact of leverage on a firm's capital structure, and foreign exchange.
Chartered finance. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
WE PROVIDE
CASE STUDY ANSWERS
ASSIGNMENT SOLUTIONS
PROJECT REPORTS AND THESIS
ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM
SMU / SYMBIOSIS / XAVIER / NIRM / PSBM / NSBM ISM / IGNOU / IICT / ISBS / LPU / ISM&RC / NMIMS /ISBS / MANIPAL / GARUDA / HIMALAYA IMT / IC MIND / IACT / UPES
MBA - EMBA - BMS - GDM - MIS - MIB
DMS - DBM - PGDM - BBM – DBA - PGDM
www.mbacasestudyanswers.com
www.casestudysolution.in
aravind.banakar@gmail.com
ARAVIND
09901366442 – 09902787224
9901366442 / 9902787224 / www.mbacasestudyanswers.com
Corporate finance management. 9901366442
CASE STUDY SOLUTIONS
CASE STUDY ANSWER SHEETS
CASE STUDY ANSWERS
CASE STUDY SOLUTION PAPERS
ARAVIND
09901366442 – 09902787224
• BMS ISBM CASE STUDY ANSWER SHEETS
• BMS ISBM CASE STUDY SOLUTIONS
• GDM ISBM CASE STUDY ANSWER SHEETS
• GDM ISBM CASE STUDY SOLUTIONS
• MBA ISBM CASE STUDY ANSWER SHEETS
• MBA ISBM CASE STUDY SOLUTIONS
• EMBA ISBM CASE STUDY ANSWER SHEETS
• EMBA ISBM CASE STUDY SOLUTIONS
• MBA CASE STUDY ANSWER SHEETS
• EMBA CASE STUDY ANSWER SHEETS
• DMS ISBM ANSWER SHEETS
• ISBM ANSWER SHEETS
• ISBM MBA ANSWER SHEETS
• ISBM EMBA ANSWER SHEETS
• ISBM DMS SOLUTIONS
ARAVIND
09901366442 – 09902787224
• IIBMS ANSWER SHEETS
• IIBMS MBA CASE STUDY ANSWER SHEETS
• IIBMS MBA CASE STUDY SOLUTIONS
• IIBMS EMBA CASE STUDY ANSWER SHEETS
• IIBMS EMBA CASE STUDY SOLUTIONS
• IIBMS DMS CASE STUDY ANSWER SHEETS
• IIBMS DMS CASE STUDY SOLUTIONS
• IIBMS MMS CASE STUDY ANSWER SHEETS
• IIBMS MIB CASE STUDY SOLUTIONS
• MBA IIBMS ANSWER SHEETS
• EMBA IIBMS CASE STUDY SOLUTIONS
ARAVIND
09901366442 – 09902787224
• IIBM MBA CASE LET ANSWER SHEETS
• MBA IIBM ANSWER SHEETS
• IIBM EMBA CASE LET ANSWER SHEETS
• EMBA IIBM ANSWER SHEETS
• IIBM MIB ANSWER SHEETS
• MIB IIBM CASE STUDY ANSWER SHEETS
• DMS IIBM ANSWER SHEETS
• IIBM DMS CASE STUDY SOLUTIONS PAPERS
• IIBM CASE STUDY ANSWER SHEETS
• IIBM MULTIPLE ANSWERS
ARAVIND
09901366442 – 09902787224
• KSBM ANSWER SHEETS
• KSBM SOLUTION PAPERS
• KSBM MBA ANSWER SHEETS
• KSBM MBA SOLUTION PAPERS
• KSBM EMBA ANSWER SHEETS
• KSBM EMBA SOLUTIONS
• KAZIAN MBA ANSWER SHEETS
• KAZIAN EMBA SOLUTIONS
• KAZIAN EMBA ANSWER SHEETS
• KAZIAN DMS ANSWER SHEETS
• MBA KSBM SOLUTION PAPERS
• EMBA KSBM ANSWER SHEETS
ARAVIND
09901366442 – 09902787224
• XAVIER ANSWER SHEETS
• XIBMS ANSWER SHEETS
• XAVIER SOLUTION PAPERS
• MBA XAVIER ANSWER SHEETS
• MBA XAVIER SOLUTION PAPERS
• EMBA XAVIER ANSWER SHEET
• EMBA XAVIER SOLUTIONS
• XIBMS MBA ANSWER SHEETS
• PGDBM XAVIER ANSWER SHEETS
• BMS XAVIER ANSWER SHEETS
• XAVIER BMS SOLUTION PAPERS
• DMS XAVIER ANSWER SHEETS
• XAVIER DMS SOLUTION PAPERS
ARAVIND
09901366442 – 09902787224
Bus 401 week 3 quiz version c
This document contains a 10 question quiz on topics related to corporate finance and capital budgeting. It includes questions about calculating cash flows, investment project evaluation methods like net present value and internal rate of return, and the cost of capital. The quiz also contains questions about capital structure, the time value of money, and depreciation.
1.Which of the following is considered a hybrid organizational for.docx
1.Which of the following is considered a hybrid organizational form?
Corporation
limited liability partnership
sole proprietorship
partnership
3. Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?
$1,844,022
$2,303,010
$2,123,612
$803,010
5. Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?
61.7 days
57.9 days
65.2 days
64.3 days
6. Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?
1.74
0
0.60
1.47
8. Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
$22,680
$26,454
$16,670
$19,444
9. PV of multiple cash flows: Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)
$2,735,200
$2,615,432
$2,431,224
$2,815,885
10. PV of multiple cash flows: Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
$480,906
$414,322
$477,235
$429,560
11. Future value of an annuity: Jayadev Athreya has started on his first job. He plans to start saving for retirement early. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years? (Round to the nearest dollar.)
$3,594,524
$5,233,442
$1,745,600
$2,667,904
12. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)
40%
12%
16%
32%
13. Bond price: Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company's bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)
$1,066
$923
$972
$1,014
14. PV of dividends: Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return is 14 pe.
Description Instructions Complete final exam.Ques.docx
Description / Instructions: Complete final exam.
Question 1
Which of the following is considered a hybrid organizational form?
sole proprietorship
partnership
corporation
limited liability partnership
Question 2
Which of the following is a principal within the agency relationship?
a company engineer
the CEO of the firm
a shareholder
the board of directors
Question 3
Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?
$803,010
$2,303,010
$2,123,612
$1,844,022
Question 4
Which of the following presents a summary of the changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period?
The statement of cash flows.
The statement of net worth.
The statement of retained earnings.
The statement of working capital.
Question 5
Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?
61.7 days
57.9 days
65.2 days
64.3 days
Question 6
Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?
0
0.60
1.47
1.74
Question 7
Which of the following is not a method of “benchmarking”?
Utilize the DuPont system to analyze a firm’s performance.
Conduct an industry group analysis.
Evaluating a single firm’s performance over time.
Identify a group of firms that compete with the company being analyzed.
Question 8
Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
$26,454
$19,444
$22,680
$16,670
Question 9
PV of multiple cash flows: Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)
$2,815,885
$2,615,432
$2,735,200
$2,431,224
Question 10
PV of multiple cash flows: Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
$429,560
$414,322
$480,906
$477,235
Question 11
Future value of an annuity: Jayadev At.
1.Which of the following is considered a hybrid organizational for.docx
1.Which of the following is considered a hybrid organizational form?
Corporation
limited liability partnership
sole proprietorship
partnership
3. Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?
$1,844,022
$2,303,010
$2,123,612
$803,010
5. Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?
61.7 days
57.9 days
65.2 days
64.3 days
6. Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?
1.74
0
0.60
1.47
8. Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
$22,680
$26,454
$16,670
$19,444
9. PV of multiple cash flows: Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)
$2,735,200
$2,615,432
$2,431,224
$2,815,885
10. PV of multiple cash flows: Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
$480,906
$414,322
$477,235
$429,560
11. Future value of an annuity: Jayadev Athreya has started on his first job. He plans to start saving for retirement early. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years? (Round to the nearest dollar.)
$3,594,524
$5,233,442
$1,745,600
$2,667,904
12. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)
40%
12%
16%
32%
13. Bond price: Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company's bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)
$1,066
$923
$972
$1,014
14. PV of dividends: Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return is 14 percent, what is the present value of their dividends over the ne.
Uop fin 370 final exam guide
This document contains a practice exam for the UOP FIN 370 course with 60 multiple choice questions covering topics like the cash cycle, time value of money, capital budgeting, cost of capital, and financial statement analysis. An online resource is provided for additional practice exams.
Uop fin 370 final exam guide
fin 370,uop fin 370,uop fin 370 complete course,uop fin 370 entire course, uop fin 370 week 1,uop fin 370 week 2,uop fin 370 week 3,uop fin 370 week 4,uop fin 370 week 5,fin 370 final exam guide new,fin 370 tutorials,fin 370 assignments,fin 370 help, fin 370 cash flow problem sets new,fin 370 final exam guide new,fin 370 final exam guide new,
AssetsLiabilitiesTotal Reserves$50,000Demand Deposits$18.docx
Assets
Liabilities
Total Reserves
$50,000
Demand Deposits
$180,000
U.S. Government Bonds
$110,000
Loans
$20,000
Assume the balance sheet above is for Eastlandia National Bank. The reserve requirement is 20%.
a. Given the current situation, how much money can Eastlandia National Bank lend to borrowers if it wants to keep all of its bonds?
b. Based on your answer in part (a), how much additional money can Eastlandia National Bank create? (Remember, how means how and why.)
c. Explain two reasons why the money supply may not increase by the amount you identified in part (b).
Spring 2013 Due Wed May. 15 by 4pm (my office)
1) Describe (in detail) the three forms of underwriting.
2) You want to set up an education trust for a relative starting in 2014. The trust will pay $25,000 a year starting in year 2022 and ending in year 2025. The stated annual percentage rate is 8% compounded annually.
a. How much will you have to invest in 2010 to achieve your objective?
b. How much will you have to invest each year from 2012 – 2017 to achieve your objective?
3) Samuelson Plastics has 7.5 percent preferred stock outstanding. Currently, this stock has a market value per share of $52 and a book value per share of $38. What is the cost of preferred stock?
4) Tidewater Fishing has a current beta of 1.21. The market risk premium is 8.9 percent and the risk-free rate of return is 3.2 percent. By how much will the cost of equity increase if the company expands its operations such that the company beta rises to 1.50?
5) Penn Corporation does not currently pay dividends. It is expected to begin paying dividends in year three (3) with a $2.50 dividend. This dividend is expected to grow at a rate of 14% for three years and then 6% every year after that forever. The required return on Penn’s stock is 16%. Calculate the price of Penn’s stock today.
6) Suppose Primerica has just paid a dividend of $1.75 per share. Sales and profits for Primerica are expected to grow at a rate of 5% per year. Its dividend is expected to grow by the same amount. If the required return is 12%, what is the value of a share of Primerica in 6 years?
7) IPOs typically experience underpricing. Describe (1) what is underpricing, (2) the evidence that underpricing occurs (be sure to include real world numbers/examples), and (3) why does underpricing occur.
8) Adelson's Electric had beginning long-term debt of $42,511 and ending long-term debt of $48,919. The beginning and ending total debt balances were $84,652 and $78,613, respectively. The interest paid was $4,767. What is the amount of the cash flow to creditors?
9) You arrived at work today to see the CFO, COO and most of the company’s top management team taken away in handcuffs. The only executive who was not arrested was the newly appointed CEO. Before you can even reach your cube, the CEO calls you into his office to explain some incomplete project an ...
Fin 370 final exam
This document appears to be a study guide or list of questions for a final exam in FIN 370. It includes 30 multiple choice or short answer questions covering various topics in finance, including: the goals of firms, primary and secondary markets, agency theory, principles of financial management, cash budgets, break-even analysis, present value, sources of financing, capital budgeting techniques like payback period and NPV, cost of capital calculation, capital structure, leverage, and international finance topics.
STR 581 Capstone Final Examination, Part 2 - STR 581 Capstone Final Examinati...
Transweb E Tutors provides the finest assignments and Homework help for STR 581 Capstone Final Examination, Part Two. Come to get the all Course matters and weekly assignments of STR 581 Capstone Final Examination of all part at the Transweb E Tutors. Find the STR 581 capstone final examination part 2 questions and their answers for free.
http://www.transwebetutors.com/University-of-phoenix/STR-581-Week-4-Capstone-Final-Examination-Part-Two.html
Question 1 Which of the following is considered a hybrid org.docx
Question 1
Which of the following is considered a hybrid organizational form?
corporation
sole proprietorship
limited liability partnership
partnership
Question 2
Which of the following is a principal within the agency relationship?
the CEO of the firm
a shareholder
the board of directors
a company engineer
Question 3
Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?
$1,844,022
$2,303,010
$2,123,612
$803,010
Question 4
Which of the following presents a summary of the changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period?
The statement of working capital.
The statement of cash flows.
The statement of retained earnings.
The statement of net worth.
Question 5
Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?
57.9 days
64.3 days
65.2 days
61.7 days
Question 6
Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?
1.47
0
1.74
0.60
Question 7
Which of the following is not a method of “benchmarking”?
Evaluating a single firm’s performance over time.
Identify a group of firms that compete with the company being analyzed.
Utilize the DuPont system to analyze a firm’s performance.
Conduct an industry group analysis.
Question 8
Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
$26,454
$16,670
$19,444
$22,680
estion 9
PV of multiple cash flows: Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)
$2,615,432
$2,815,885
$2,431,224
$2,735,200
Question 10
PV of multiple cash flows: Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
$480,906
$414,322
$429,560
$477,235
Question 11
Future value of an annuity: Jayadev Athreya has started on his first job. He plans to start saving for retirement early. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years? (Round to the nearest dollar.)
$1,745,600
$5,233 ...
1.A proxy fight occurs when a competitor offers to sell t.docx
1.
A proxy fight occurs when:
a competitor offers to sell their ownership interest in the firm.
the board of directors disagree on the members of the management team.
a group solicits voting rights to replace the board of directors.
the firm is declared insolvent.
the firm files for bankruptcy.
2.
The process of planning and managing a firm's long-term assets is called:
capital structure.
capital budgeting.
working capital management.
financial depreciation.
agency cost analysis.
3.
Which one of the following actions by a financial manager creates an agency problem?
agreeing to pay bonuses based on the market value of the company’s stock
refusing to borrow money when doing so will create losses for the firm
agreeing to expand the company at the expense of stockholders' value
increasing current costs in order to increase the market value of the stockholders' equity
refusing to lower selling prices if doing so will reduce the net profits
4.
Which one of these is a cash outflow from a corporation?
sale of an asset
dividend payment
profit retained by the firm
sale of common stock
issuance of debt
5.
First City Bank pays 6 percent simple interest on its savings account balances, whereas Second City Bank pays 6 percent interest compounded annually.
If you made a $66,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years?
(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Difference in accounts
6.
Gerold invested $125 in an account that pays 5 percent simple interest. How much money will he have at the end of 7 years?
$160.31
$168.75
$155.00
$175.50
$162.50
7.
What is the present value of $12,450 to be received 5 years from today if the discount rate is 4.75 percent?
$10,340.78
$9,871.86
$13,105.26
$9,761.00
$9,773.15
8.
One year ago, you purchased 300 shares of IXC stock at a price of $22.05 per share, received $460 in dividends over the year, and today sold all of your shares for $29.32 per share. What was your dividend yield?
5.87%
5.23%
1.92%
6.95%
2.48%
9.
One year ago, you purchased a stock at a price of $32.50. The stock pays quarterly dividends of $.40 per share. Today, the stock is worth $34.60 per share. What is the total dollar return per share to date from this investment?
rev: 06_21_2016_QC_CS-54260
$2.50
$3.40
$2.10
$3.70
$3.80
10.
Which one of these accounts is classified as a current asset on the balance sheet?
accounts payable
preferred stock
net plant and equipment
inventory
intangible asset
11.
Net working capital is defined as:
current assets plus stockholders' equity.
current assets minus current liabilities.
fixed assets minus long-term liabilities.
total assets minus total liabilities.
current assets plus fixed assets.
12.
Which one of the following accounts is included in stockholders' equity?
intan ...
Question 1 (17 marks)HiSpeed Ltd. plans to manufacture cross-cou.docx
Question 1 (17 marks)
HiSpeed Ltd. plans to manufacture cross-country skiing equipment. Its cash flows are highly dependent on the weather in early winter. HiSpeed operates under ideal conditions of uncertainty. On August 1, 2014, the beginning of its first year in business, HiSpeed acquires equipment to be used in its operations. The equipment will last two years, at which time its salvage value will be zero. The company finances the equipment purchase by issuing common shares.
HiSpeed’s annual net cash flows will be $800 if the weather is snowy and $300 if it is not snowy. Assume that cash flows are received at year end. In each year, the objective probability that the weather is snowy is 0.7 and 0.3 that it is not snowy. The interest rate in the economy is 3% in both years.
HiSpeed will pay a dividend of $50 at the end of each year of operation.
Required
a. (9 marks)
In 2014, the weather is snowy. Prepare a statement of financial position as at July 31, 2015, the end of HiSpeed’s first year of operations, and an income statement for the year.
b. (2 marks)
What timing of revenue recognition is implicit in the income statement you have prepared in part (a)? When ideal conditions do not hold, is this timing of revenue recognition relevant? Is it reliable? Explain.
c. (6 marks)
Assume that HiSpeed paid the present value you calculated in part (a) for its equipment. Calculate HiSpeed’s net income for the year ended July 31, 2015 on a historical cost basis, assuming that equipment is depreciated on a straight-line basis. Under the more realistic assumption that ideal conditions do not hold, which measure of net income is most relevant? Which is most reliable? Why?
Question 2 (18 marks)
Prem has $2,000 that he wishes to invest for one year. He has narrowed his choices down to one of the following two actions:
i: Buy bonds of X Ltd., a company that has a very high debt-to-equity ratio. These bonds pay 8% interest, unless X defaults, in which case Prem will receive no interest but will recover his principal. (a1)
ii: Buy Canada Savings Bonds, paying 3% interest. (a2)
Prem assesses the prior probability of X Ltd. defaulting as 0.40. His utility for money is given by the square root of the amount of his net payoff. That is, if he buys the Canada Savings Bonds, his net payoff is $60, yielding utility of √60 = 7.75, and so on. Prem is a rational decision maker.
Required
a. (4 marks)
Based on his prior probability calculations, which action should Prem take? Show your calculations.
b. (9 marks)
Before making a final decision, Prem decides he needs more information. He obtains X Ltd.’s current financial statements and examines its times-interest-earned ratio. This ratio can be either high or low. Upon calculating the ratio, Prem observes that it is low. On the basis of his prior experience in bond investments, Prem knows the following conditional probabilities:
Debt-to-Equity Ratio
Future State
Low
High
ND (no default)
0.50
0.50
D ( ...
Mgt 325 week 3 discussion questions 1 (measuring performance)
The document contains a collection of questions and answers on various business and finance topics such as capital structure theory, financial ratios, accounting concepts, investment analysis, and more. It provides links to additional resources and discusses measurements used to evaluate airline and company performance. The document serves as a study guide or practice questions for students or professionals.
Uop fin 571 final exam
fin 571,uop fin 571,uop fin 571 entire course,uop fin 571 week 1,uop fin 571 week 2,uop fin 571 week 3,uop fin 571 week 4,uop fin 571 week 5,fin 571 final exam guide new,fin 571 tutorials,fin 571 assignments,fin 571 help
Financial Analysis and Decision MakingMake sure all work is legi.docx
Financial Analysis and Decision Making
Make sure all work is legible and all work is shown for problems 16 – 27.
FOR MULTIPLE CHOICE, HIGHLIGHT OR BOLD YOUR RESPONSE
1. Moshen Corporation just announced that its net income was lower than last year. Nevertheless, analysts estimate that the company’s net cash flow increased. What factors could explain this inconsistency?
a. The company’s depreciation expense increased.
b. The company’s interest expense declined.
c. The company had an increase in its non-cash revenues.
d. Answers a and b are correct.
e. Answers b and c are correct.
2.
Rivers Edge Inc. has annual sales of $737,000. Earnings before interest and taxes is equal to 21 percent of sales. For the period, the firm paid $7,900 in interest. What is the profit margin if the tax rate is 35 percent?
a. 12.46 percent
b. 12.95 percent
c. 13.33 percent
d. 15.29 percent
e. 16.11 percent
3.
Of the following activities, which will increase cash?
a. increasing inventory
b. repurchasing shares of stock
c. increasing accounts payable
d. buying new equipment
e. increasing prepaid taxes
4. All else held constant, which will increase the present value of an annuity?
I. Increase in the number of payments
II. Increase in the interest rate
III. Decrease in the interest rate.
IV. Decrease in the payment amount
a. I and II only
b. I and III only
c. II and IV only
d. I, II, and IV only
e. I, III, and IV only
5.
An investment will pay $3,500 five years from now. If the going interest rate on the 5-year security is 4.25%, how much is it worth today?
a.
$1,928.78
b.$2,030.30
c.
$2,131.81
d.$2,238.40
e.
$2,842.42
6.
Standard deviation measures _____ risk while beta measures _____ risk.
a. systematic; unsystematic
b. unsystematic; systematic
c. total; unsystematic
d. total; systematic
e. asset-specific; market
7.
Forever Memories Corp. just paid an annual dividend of $2.80. The company has increased its dividend by 2.5 percent a year for the past ten years and expects to continue doing so. What will a share of this stock be worth six years from now if the required return is 16 percent?
a. $23.60
b. $24.65
c. $25.08
d. $25.50
e. $26.90
8. Main distinguishing differences between debt and equity capital consist of all of the following EXCEPT:
a. Debtholders have no voice in management so long as the issuer does not
violate stated contractual obligations.
b. Claims on income and assets are as follows: bondholders, preferred
shareholders, common shareholders.
c. Debt has a stated maturity, while equity does not.
d. In terms of tax treatment, common equity is entitled to a tax deduction.
e. Common stockholders have voting rights.
9. The payback period is the length of time it takes an investment to generate sufficient cash flows to enable the project to:
a. produce a positive annual cash flow.
b. produce a positive cash flow from assets.
c. offset its fixed e ...
Acct 221 Principles of Accounting IIThere are 27 questions in thi.docx
Acct 221: Principles of Accounting II
There are 27 questions in this exam. Upload the Answer Sheet when you complete the exam.
For this exam,
omit
all general journal entry
explanations.
Be sure to include correct dollar signs, underlines and double underlines.
Question 1 (15 points) Statement of Cash Flows
The following is selected information from Murphy Company for the fiscal years ended December 31, 2015: Murphy Company had net income of $500,000. Depreciation was $50,000, purchases of plant assets were $ 250,000, and disposals of plant assets for $500,000 resulted in a $20,000 gain. Stock was issued in exchange for an outstanding note payable of $925,000. Accounts receivable decreased by $25,000. Accounts payable decreased by $10,000. Dividends of $200,000 were paid to shareholders. Murphy Company had interest expense of $5,000. Cash balance on January 1, 2015 was $250,000.
Requirements:
Prepare Murphy Company's statement of cash flows for the year ended December 31, 2015 using the indirect method.
Hint (recall the 3 sections)
Question 2 (10 points)
On January 1, 2015, Baker Company purchased 10,000 shares of the stock of Murphy,
and did obtain significant influence
. The investment is intended as a long-term investment. The stock was purchased for $70,000, and represents a 25% ownership stake. Murphy made $20,000 of net income in 2015, and paid dividends of $10,000. The price of Murphy's stock increased from $20 per share at the beginning of the year, to $22 per share at the end of the year.
Requirements:
Prepare the January 1 and December 31 general journal entries for Baker Company.
How much should the Baker Company report on the balance sheet for the investment in Murphy at the end of 2015?
Question 3 (20 Points)
On December 31, 2016, Murphy Inc. had the following balances (all balances are normal):
Accounts
Amount
Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares issued and outstanding)
$1,000,000
Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding)
$1,000,000
Paid-in Capital in Excess of par, Common
150,000
Retained Earnings
700,000
The following events occurred during 2016 and were not recorded:
On January 1, Murphy declared a 5% stock dividend on its common stock when the market value of the common stock was $15 per share. Stock dividends were distributed on January 31 to shareholders as of January 25.
On February 15, Murphy re-acquired 1,000 shares of common stock for $20 each.
On March 31, Murphy reissued 250 shares of treasury stock for $25 each.
On July 1, Murphy reissued 500 shares of treasury stock for $16 each.
On October 1, Murphy declared full year dividends for preferred stock and $1.50 cash dividends for outstanding shares and paid shareholders on October 15.
On December 15, Murphy split common stock 2 shares for 1.
Net Income for 2016 was $275,000.
Requirements:
Prepare journal entries for the transactions listed above.
Prepa.
Similar to Corporate finance. 9901366442 / 9902787224 / www.mbacasestudyanswers.com (20)
Isbm corporate law.corporate finance mgmt.aravind 9901366442
Isbm corporate law.corporate finance mgmt.aravind 9901366442
Chartered finance. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
Chartered finance. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
1.Which of the following is considered a hybrid organizational for.docx
1.Which of the following is considered a hybrid organizational for.docx
Description Instructions Complete final exam.Ques.docx
Description Instructions Complete final exam.Ques.docx
1.Which of the following is considered a hybrid organizational for.docx
1.Which of the following is considered a hybrid organizational for.docx
AssetsLiabilitiesTotal Reserves$50,000Demand Deposits$18.docx
AssetsLiabilitiesTotal Reserves$50,000Demand Deposits$18.docx
STR 581 Capstone Final Examination, Part 2 - STR 581 Capstone Final Examinati...
STR 581 Capstone Final Examination, Part 2 - STR 581 Capstone Final Examinati...
Question 1 Which of the following is considered a hybrid org.docx
Question 1 Which of the following is considered a hybrid org.docx
1.A proxy fight occurs when a competitor offers to sell t.docx
1.A proxy fight occurs when a competitor offers to sell t.docx
Question 1 (17 marks)HiSpeed Ltd. plans to manufacture cross-cou.docx
Question 1 (17 marks)HiSpeed Ltd. plans to manufacture cross-cou.docx
Mgt 325 week 3 discussion questions 1 (measuring performance)
Mgt 325 week 3 discussion questions 1 (measuring performance)
Financial Analysis and Decision MakingMake sure all work is legi.docx
Financial Analysis and Decision MakingMake sure all work is legi.docx
Acct 221 Principles of Accounting IIThere are 27 questions in thi.docx
Acct 221 Principles of Accounting IIThere are 27 questions in thi.docx
Recently uploaded
Digital Artifact 1 - 10VCD Environments Unit
Digital Artifact 1 - 10VCD Environments Unit - NGV Pavilion Concept Design
How to Make a Field Mandatory in Odoo 17
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
How to Build a Module in Odoo 17 Using the Scaffold Method
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
DRUGS AND ITS classification slide share
Any substance (other than food) that is used to prevent, diagnose, treat, or relieve symptoms of a
disease or abnormal condition
Main Java[All of the Base Concepts}.docx
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar KanvariaANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
The Diamonds of 2023-2024 in the IGRA collection
A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
Hindi varnamala | hindi alphabet PPT.pdf
हिंदी वर्णमाला पीपीटी, hindi alphabet PPT presentation, hindi varnamala PPT, Hindi Varnamala pdf, हिंदी स्वर, हिंदी व्यंजन, sikhiye hindi varnmala, dr. mulla adam ali, hindi language and literature, hindi alphabet with drawing, hindi alphabet pdf, hindi varnamala for childrens, hindi language, hindi varnamala practice for kids, https://www.drmullaadamali.com
How to Add Chatter in the odoo 17 ERP Module
In Odoo, the chatter is like a chat tool that helps you work together on records. You can leave notes and track things, making it easier to talk with your team and partners. Inside chatter, all communication history, activity, and changes will be displayed.
South African Journal of Science: Writing with integrity workshop (2024)
South African Journal of Science: Writing with integrity workshop (2024)Academy of Science of South Africa
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.Walmart Business+ and Spark Good for Nonprofits.pdf
"Learn about all the ways Walmart supports nonprofit organizations.
You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
The webinar may also give some examples on how nonprofits can best leverage Walmart Business+.
The event will cover the following::
Walmart Business + (https://business.walmart.com/plus) is a new shopping experience for nonprofits, schools, and local business customers that connects an exclusive online shopping experience to stores. Benefits include free delivery and shipping, a 'Spend Analytics” feature, special discounts, deals and tax-exempt shopping.
Special TechSoup offer for a free 180 days membership, and up to $150 in discounts on eligible orders.
Spark Good (walmart.com/sparkgood) is a charitable platform that enables nonprofits to receive donations directly from customers and associates.
Answers about how you can do more with Walmart!"
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
Discover the Simplified Electron and Muon Model: A New Wave-Based Approach to Understanding Particles delves into a groundbreaking theory that presents electrons and muons as rotating soliton waves within oscillating spacetime. Geared towards students, researchers, and science buffs, this book breaks down complex ideas into simple explanations. It covers topics such as electron waves, temporal dynamics, and the implications of this model on particle physics. With clear illustrations and easy-to-follow explanations, readers will gain a new outlook on the universe's fundamental nature.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UP
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
BBR 2024 Summer Sessions Interview Training
Qualitative research interview training by Professor Katrina Pritchard and Dr Helen Williams
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
Chapter 4 - Islamic Financial Institutions in Malaysia.pptxMohd Adib Abd Muin, Senior Lecturer at Universiti Utara Malaysia
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
Recently uploaded (20)
How to Build a Module in Odoo 17 Using the Scaffold Method
How to Build a Module in Odoo 17 Using the Scaffold Method
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Liberal Approach to the Study of Indian Politics.pdf
Liberal Approach to the Study of Indian Politics.pdf
South African Journal of Science: Writing with integrity workshop (2024)
South African Journal of Science: Writing with integrity workshop (2024)
Walmart Business+ and Spark Good for Nonprofits.pdf
Walmart Business+ and Spark Good for Nonprofits.pdf
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
The simplified electron and muon model, Oscillating Spacetime: The Foundation...
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UP
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UP
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
Pride Month Slides 2024 David Douglas School District
Pride Month Slides 2024 David Douglas School District
Corporate finance. 9901366442 / 9902787224 / www.mbacasestudyanswers.com
- 1. Sub:- CORPORATE FINANCE CASE STUDY : 1 Reliance company has a $ 1,000 face value convertible bond issue that is currently selling in the market for $ 950. Each bond is exchangeable at any time for 25 shares of the company’s stock. The convertible bond has a 7 percent coupon. Payable semi-annually. Similar non-convertible bonds are priced to yield 10 percent. The bond matures in 10 years stock in Reliance sells for $ 36 per share. Q1) What are the conversion ratio, conversion price, and conversion premium? Q2) What is the straight bond value? Q3) What is the conversion value? Q4) What is the option value of the bond? CASE STUDY : 2 Suppose your company needs $ 15 million to build a new assembly line. Your target debt equity ratio is 0.90. The flotation cost for new equity is 8 percent, but the flotation cost for debt is only 5%. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. Q1) What do you think about the rationale behind borrowing the entire amount? Q2) What is your company’s weighted average flotation cost, assuming all equity is raised externally? Q3) What is the true cost of building the new assembly line after taking flotation costs into account? Q4) Does it matter in this case that the entire amount is being raised from debt? CASE STUDY : 3 ABC Co. & XYZ Co. are identical firms in all respects except for their capital structure. ABC is all equity financed with $ 800,000 in stock XYZ uses both stocks and perpetual debt, its stock is worth $ 400,000 and the interest rate on its debt is 10 per cent. Both firms expect EBIT to be $ 90000. Ignore taxes. AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL
- 2. Q1) Rico owns $ 30,000 worth of XYZ’s stock. What rate of return is he expecting? Q2) Show how Rico could generate exactly the same cash flows and rate of return by investing in ABC and using homemade leverage? Q3) What is the cost of equity for ABC? What is it for XYZ? Q4) What is the WACC for ABC? For XYZ? What principle have you illustrated? CASE STUDY : 4 The Nike Company sells 3000 pairs of running shoes per month at a cash price of $88 per pair. The firm is considering a new policy that involves 30 days credit and an increase in price to $ 90.72 per pair on credit sales. The cash price will remain at $ 88 and the new policy is not expected to affect the quantity sold. The discount period will be 20 days. The required return is 1 percent per month. Q1) How would be the new credit terms be quoted? Q2) What investment is receivables is required under the new policy? Q3) Explain why the variable cost of manufacturing the shoes is not relevant here? Q4) If the default rate is anticipated to be 10 per cent, should the switch be made? What is the break even credit price?