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Finance Questions and Answers April 22, 2016

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Stock XYZ has a current dividend of $4.00 . The dividend is expected to grow at 2.00% per year until year 3 and then at 3.00% per year for the rest of time. Based on the riskiness XYZ, its discount rate is 6.00% . With this information, what is the dividend yield from today to year 1? 3.00% 6.00% 2.94% 3.21% 3.06% 2.90%

PRINTER VERSION BACK Problem 10.16 a-b (Solution Video) Crane Industries is expanding its product line and its production capacity. The costs and expected cash flows of the two independent projects are given in the following table. The firm uses a discount rate of 14.60 percent for such projects. Year Product Line Expansion -$1,592,200 503,500
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17 Consider the following linear programming problem 4X + 10Y Maximize 2x + 4y s 104 Subject to: 4X + 2Y = 78 all variable > 0 The feasible corner points are (12,15), (018), (0,0). (30,0). What is the maximum possible value ?for the objective function () (1.5
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Although the world economy is much more integrated today than was the case 1 0 or 2 0 years ago, a variety of barriers still hamper free movements of people, goods, services, and capital across national boundaries. These barriers include Multiple Choice Information asymmetry. all of the options excessive transportation costs. legal restrictions
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Question 23 2 pts At an effective interest rate of i, i > 0, both of the following annuities have a present value of X: (i) a 20-year annuity immediate with annual payments of 110 (ii) a 30-year annuity immediate with annual payments of 50 per year for the first 10 years, 100 per year for the second 10 years, and 150 per year for the final 10
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Five years have passed and Jamie Lee, 34 is considering taking the plunge--not only is she engaged to be married, but she is also deciding on whether to purchase a new home Jamie Lee's cupcake cafe is a success! It has been open for over a year now and has earned itself rave reviews in the local press and from its regular customers who just cannot
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Microbiotics currently sells all of its frozen dinners cash on delivery but believes it can increase sales by offering supermarkets 1 month of free credit. The price per carton is $90, and the cost per carton is $60. The unit sales will increase from 1,040 cartons to 1,100 per month if credit is granted. Assume all customers pay their bills and

Common stock value: Constant growth Seagate Technology is a global leader in data storage solutions and a high-yield dividend payer. From 2018 through 2022, Seagate paid the following per-share dividends: Year Dividend per share 2022 $2.57 2021 2.29 2020 1.81 2019 1.18 2018 1.51 Assume that the historical annual growth rate of Seagate dividends is
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Consider the following two projects: Project Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow Discount Rate A 100 40 50 60 N/A 0.16 B 73 30 30 30 30 0.16 The net present value (NPV) of project A is closest to: a: 11.1 b:10 1 c:25.2 d:12.6

The Belton Corporation has $7 million in earnings after taxes and 2 million shares outstanding. The stock trades at a P/E of 20. The firm has $3 million in excess cash. a. Compute the current price of the stock. Current price $ 70 b. If the $3 million is used to pay dividends, how much will dividends per share be? Dividends per share $ 1.50 c. If
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Below is list of companies and their stock prices, and the amount of their outstanding shares, build a price weighted index with a divisor of 5 based on this data. Company Stock Price Shares Outstanding A $5 100,000 shares B $25 1 million shares C $250 10,000 shares Based on the data above please construct a value weighted Index using a divisor of

(Present value of complex cash flows) You have an opportunity to make an investment that will pay $400 at the end of the first year, $400 at the end of the second year, $400 at the end of the third year, $100 at the end of the fourth year, and $200 at the end of the fifth year. a. Find the present value if the interest rate is 11 percent. (Hint:
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Your best friend, Jiang, is now 27-years old and has worked for the same accounting firm since he graduated from Baruch College five years ago. His current income is good but not great. He has just started an MBA program at night and plans to eventually take the CPA exam. His boss has told him he can expect a considerable bump in his compensation

Kassim has just been offered a job at 500,000 a year. He anticipates his salary will increase by 5% annually until his retirement in 40 years. Kassim's required return on any investment is 8%. What is the present value of Kassim's lifetime salary? (5 marks) (iv) Paulina Larbi is applying to Ghana Home Loans for a mortgage of 200,000. Ghana Home
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SF Corporation is planning to acquire a slower growth competitor, which will materially increase SF sales. A company to be acquired has pretax margins that are approximately the same for SF. SF plans to issue $300 million in long-term debt to finance the entire cost of the acquisition. Use the Constant Growth Discounted Dividends Model to

QUESTION 7 The cost of equity for an unlevered firm is 10%. The firm's cost of debt is 5% of the tax rate is 25%, what is the firm's cost of equity if they increase their debt ratio to 3092 10.096 O 12.79 11.6% O 8.5% QUESTIONS Using the information below, determine the appropratie value of a $10,000 dividend cash flow 1.5 years from today. Cost
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Question 8 Problem 27-10 NPV and Reducing Float No More Books Corporation has an agreement with Floyd Bank, whereby the bank andles \\( \\$ 3.5 \\) million in collections a day and requires a \\( \\$ 350,000 \\) compensating palance. No More Books is contemplating canceling the agreement and dividing its eastern region so that two other banks will
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Monthly loan payments Personal Finance Problem Tim Smith is shopping for a used luxury car. He has found one priced at $32,000. The dealer has told Tim that if he can come up with a down payment of $6,300, the dealer will finance the balance of the price at a 8% annual rate over 3 years (36 months). (Hint: Use four decimal places for the monthly
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A company has the following information. What is the current ratio? Inventory $85,000 Cash and marketable securities 67,500 Total current assets 245,000 Accounts payable 78,500 Total current liabilities 102,000 Prepaid expenses 15,400 2.40 1.57 1.42 0.66

2GFU Corporation has the following financial data for the years 20XX and 20XY : a. Compute inventory turnover based on sales for each year. (Round the finol answer to 1 decimal place.) b. Compute inventory turnover based on cost of goods sold for each year. (Round the final answers to 1 decimal place c. This part of the question is not part of
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Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 30% standard deviation of expected returns. Stock Y has a 13.0% expected return, a beta coefficient of 1.3, and a 25.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Round your answers to two
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jeny corp needs to raise 47 million to fund a nee project. the company will sell shares at a price of 27.80 in a general cash offer and the companys underwriters will charge a spread of 7.5 percent. the direct flotation costs associated with the issue are 62500". how many shares need tk be sold? Carnesto 547 The compact The www5625.000 tha O
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On January 1, 2017, The Ledge Inc. issued $500 million of zero coupon bonds at a market yield of 5%. The bonds mature in 10 years. What was the issue price of these bonds on 1/1/17? In other words, how much money was raised? Group of answer choices 500,000,000 535,000,000 306,956,627 228,757,181 467,289,720 How much interest will The Ledge pay in

With regards to tangibility, which of the following statements is accurate? Multiple Choice O In order to be considered a good, a product must be 100 percent tangible, In order to be considered a service, a product must be mostly intangible . Products are either tangible or intangible. Products exist on a spectrum of tangibility and most have some
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A business needs $1,000 to start and expects Sales $2,000 Expenses $1,850 Tax rate 33% of earnings Answer the following questions and SHOW ALL CALCULATION DETAILS TO GET CREDIT. A. What are earnings if the owners invest $1.000 of their own money in the business (no debt, all equity)? B. If the business borrows $400 of the $1.000 at an interest
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Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.32 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1.735 million in annual sales, with costs of

Suppose you want to buy a car today. If you can afford payments of $50 per month and want to pay the loan back over the next 5 years. Assuming no down payment is required, how much can you borrow if the bank will change you an annual percentage rate of APR? (Work out the problem on separate sheet of paper before entering the answer) Answer Check
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What is the variance of a portfolio that consists of risky assets (70%) and the remaining is risk free assets, if the variance of the risky assets is 15% and the variance of risk free assets is 2%. a. 12.5% b. 7.35% c. 19.5% d. 13.5%
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What is Soluble fibre? Soluble fibre helps to control the normal spikes in sugar, and helps lower
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The Sunbelt Corporation has $48 million of bonds outstanding that were issued at a coupon rate of 12.575 percent seven years ago. Interest rates have fallen to 11.80 percent. Mr. Heath, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Mr. Heath would like to refund the bonds

Aspen Recreation Company sells three products today. The first product is called the Apache Classic Dunebuggy and they sell 530 units each year. The second product is called the Apache Basic Dunebuggy and they sell 680 units each year. The third product is called the Apache Deluxe Dunebuggy and they sell 430 units per year. Aspen Recreation is
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You are evaluating two business leases in a famous shopping centre in Australia, Chadstone. A 2 0 0 square meter retail shop space, currently occupied by Louis Vuitton is up renewal today. Louis Vuitton wants to renew the lease today and is offering $ 1 . 2 mil p . a . in advance for 5 years. Chadstone property management has another bid for the

Need Answer ASAP please One year ago, your company purchased a machine used in manufacturing for $95,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $170,000 today. It will be depreciated on a straight-line basis over 10 years and has no salvage value. You expect that the new machine
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h 09: End-ot Chapter Problems Stocks and Their Valuation ack to Assignment Attempts Keep the Highest 1 9. Problem 9.11 (Valuation of a Constant Growth Stock) eBook Problem Walk Through A stock is expected to pay a dividend of $1.00 at the end of the year (16.02- 51.00), and it should continue to grow at a constant rate of a year. It is required
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Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $25.00 million. The plant and equipment will be depreciated over 10 years to a book value of $1.00 million, and sold for that amount in year 10. Net working capital will
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the McGovern backery chain manufacturers french breads and pastries and is consiering expansion into the west coast area.. such a move would neccessitate a capital expenditure of $200 million, McGoverns is considering raising theis money through one of two plans (1) sell $20 million new stock share of stock at $10 each or (2) sell $10 million new

An Australian importer has an outright forward contract ( FEC ) to buy USD and sell AUD. By the time the contract is due for settlement, the AUD has depreciated. What is the cost to the importer? Select one: a . The AUD cost is variable b . The AUD cost will be greater c . The AUD cost will be less d . The AUD cost will not change
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If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. There are two approaches to use to account for flotation costs. The first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. Because the investment cost is
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2. What XY2 Cep's net cash low. EBIT. peruting cash now and free cash flow (12 points) XYZ 2002 Revenue 5.20,000,000 We 5.000.000 Re: 52,000,000 Depilation Amortization: $1,000,000 Property Plant Equipment investment: $2,000,000 Tax Rate: 2016 NOWC (2022 $800,000 NOWC (2021): 5600,000 Remember to show all work
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Businesses can be classified into the following forms; proprietorship, partnership, corporation, limited ilabulity company (Lic), and Himited liability partrership (tLP); Difieient forms of businesses have different characteristics. Which of the foltowing characteristics belong to a limited liability parthership? Check av that atphy, Generaf
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