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Finance Questions and Answers May 1, 2016

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Question content area top Part 1 You are 3 1 years old, and decide to save $ 1 2 comma 5 0 0 each year ( with the first deposit one year from now ) , in an account paying 1 0 % interest per year. You will make your last deposit 3 4 years from now when you retire at age 6 5 . During retirement, you plan to withdraw funds from the account at the end

Click to see additional instructions The 1-year LIBOR rate is 5.2% with quarterly compounding. The 3-month forward rate, calculated from a Eurodollar futures contract that matures in 15 months, is 6.8% with continuous compounding. To two decimal places, an extimate of the 15 -month LIBOR rate, with quarterly compounding, is %
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Create a job aid for a new hire to an entry-level financial analyst position. Your job aid should be thorough. But it should also be easy to understand for someone new to the field of finance. In your job aid, you'll give a general overview of financial management and its important to a business. Specifically, you must address the following

1. A fund manager invested $10 million in government bonds (trading at par) is concerned about an increase in interest rates over the next 3 months. The manager decides to use the T-bond futures contract to hedge the portfolio. Current futures price is 97.023 (treasury bond futures follow the T-note/bonds price quote convention). The modified
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Saved CHAPTER FOUR HOMEWORK 6 4 Graham Potato Company has projected sales of $6,000 in September, $10,000 in October, $16,000 in November, and $12,000 in December. Of the company's sales, 20 percent are paid for by cash and 80 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale,
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At age 19, Katie Hicks is in the middle of her second year of studies at a community college in Atlanta. She has done well in her course work; majoring in pre-business studies, she currently has a 3.75 grade point average Katie lives at home and works part-time as a filing clerk for a nearby electronics distributor. Her parents can't afford to pay
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A piece of equipment has a first cost of $160,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000-21.000k, where k is the number of years since it was purchased. The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000 + 11.000k. The interest rate is 9% per year.
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a. How far away is the horizon date? I. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2. II. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2. III. The terminal, or horizon, date is infinity since common stocks
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AlCay, Ine, is financed 37% with debt, b\% wath peuferred block, and 55% with common stock. its prolax cost of bebt is 5.5%. th preferred atock pays an annual dividend of $2.48 and is priced at 529 it has an equly beta of 1:14. Assume the fisk-free rete is 2.4%, the market nisk premiom is 7.3% and Alicity's tak rate is 25%. What is its after tax
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Which of the following statement is true? (extra credit) The SML relates required returns to firms' systematic (or market) risk. The slope and intercept of 31. a. this line can be influenced by a manager's actions. b. which is the risk-free rate. The Y-axis intercept of the SML represents the required return of a portfolio with a beta of zero, The
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Question 12 Well before declaring independence, white men in the Thirteen Colonies had, in comparison to white men in Europe... Group of answer choices a. less freedom of the press. b. far less ability to participate in local government. c. far more ability to participate in local government. d. none of the above. Question 13 When comparing

Discussed why data have no value. In particular, we discussed how Amazon and Google were able to spend billions of dollars investing in new tech companies even though they were not profitable. For example, Amazon has managed to become the most valuable and powerful company in the world by leveraging their data. As part of your answer,you 1. Does

Consider the following information about three stocks: a. If your portfolio is invested 70 percent in A and 30 percent in B, what is the portfolio expected return? The variance? The standard deviation
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Corona Inc has the following shares outstanding 5,000 shares $1 par value common stock 1,000 shares $10 par value 4% non-cumulative preferred stock. In their first year of operations, Corona declares a $100 dividend. How much of the dividend will be paid to Preferred? How much of the dividend will be paid to Common? How much, if any, dividend must
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Suppose that two factors have been identified for the US economy the growth rate of industrial production, IP. and the inflation rate. IR. IP is expected to be 4%, and IR 3.5%. A stock with a beta of 1.5 on IP and 1 0 on IR currently is expected to provide a rate of return of 12%. If industrial production actuall grows by 6%, while the inflation
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Question 33 Patricia McDonald has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions is $62,000, and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long term liabilities
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Fill in the table below for the following zero - coupon bonds, all of which have par values of $ 1 , 0 0 0 . Assume annual compounding. Note: Round your answers to 2 decimal places. Answer is not complete.
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Quantitative Problem 1: Hubbard Industries just paid a common dividend, D0, of $1.60. It expects to grow at a constant rate of 3% per year. If investors require a 8% return on equity, what is the current price of Hubbard's common stock? Do not round intermediate calculations. Round your answer to the nearest cent. \$ per share Zero Growth Stocks:
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Catherine owns 100 shares in Telstra Inc. Telstra has 25 million shares outstanding that are trading at $7.5 each. Telstra has decided to place 4 million shares to a group of hedge funds at $6.5 each. Based only on the information above, the wealth transfer suffered by Catherine due to this private placement is closest to, None of the other
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Herman Co. is considering a four-year project that will require an initial investment of $15,000. The base-case cash flows for this project are projected to be $14,000 per year. The best-case cash flows are projected to be $26,000 per year, and the worst-case cash flows are projected to be - $4,500 per year. The company's analysts have estimated
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Consider the following balance sheet for WatchoverU Savings Incorporated ( $ in millions): a. What is WatchoverU's expected net interest income at year-end? b. What will be the net interest income at year-end if interest rates rise by 3 percent? (For all requirements, do not round intermediate calculations. Enter your answers in millions rounded
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Calculating Financial Ratios Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): Current assets Cash Accounts receivable Inventory Total SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Liabilities and Owners' Equity Current liabilities $
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You own a 6% bond, $1000 par value, maturing in 10 years with semi-annual coupons and a market value of $1090.00. What is the yield to maturity? a. 5.504% b. 0.653% c. -3.077% d. -0.651% e. 4.853%

Insook, Inc., and Hankyu Corp. both have 7 percent coupon bonds outstanding, with semi-annual interest payments, and both are prices at par value. The Insook, Inc. bond has 2 years to maturity, whereas the Hankyu Corp. bond has 5 years to maturity. a. If the interest rates suddenly rise by 2 percent, what is the price of Insook, and Hankyus bonds

DFB, Inc. expects earnings next year of $4.48 per share, and it plans to pay a $2.54 dividend to shareholders (assume that is one year from now). DFB will retain $1.94 per share of its earnings to reinvest in new projects that have an expected return of 15.7% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and
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The balance sheet for Kare Corp. is shown here in market value terms. There are 10,000 shares of stock outstanding. The company has declared a dividend of $1.60 per share. The stock goes ex dividend tomorrow. a. Ignoring any tax effects, what is the stock selling for today? (Do not round intermediate calculations and round your answer to 2 decimal
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Netgear is considering making a new wireless home networking gadget Sales and cost forecasts: Annual sales of 50,000 units per year; for each of four years of forecasted product life, Wholesale price of $260, Unit production costs of $110 The product would be ready to ship in one year The project requires: Purchasing new equipment for $7.5

From the base price level of 1 0 0 in 1 9 8 1 , Saudi Arabian and U . S . price levels in 2 0 1 0 stood at 3 5 0 and 1 0 0 , respectively. Assume the 1 9 8 1 $ per riyal exchange rate was $ 0 . 8 6 per riyal. Suggestion: Using the purchasing power parity, adjust the exchange rate to compensate for inflation. That is , determine the relative rate
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Payday loans are high-interest short-term loans, usually over a period of two weeks. One recurring political question is whether or not interest rates on such loans should be capped. Roughly speaking, those in favor of caps want to protect consumers from potentially harmful loans, while those against caps want to let the free market determine what

Fletcher Company's current stock price is $36, its last dividend was $2.40, and its required rate of return is 12%. If dividends are expected to grow at a constant rate, g, what is Fletcher's expected stock price 7 years from now? (Round your answer to the nearest hundredth, have two decimal digits after decimal place)
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A commodity producer sells a call option to finance the purchase of a put (sells a collar). The strike price of the call option is $70, the premium for the call option is $0.67, and the premium for the put option is $0.41. What is the net hedge price (ceiling) for the producer, accounting for both the premium paid (put) and the premium received

1). What is Dylan's quick ratio for the current year? Show your calculations. 2). What is Dylan's return on fixed assets for the current year? Show your calculations. 3). What is Dylan's equity multiplier for the current year? Show your calculations. 4). What is Dylan's return on total asset for the current year? Show your calculations
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Which of the following is not one of the primary types of the financing activities in the statement of cash flows? Paying dividends Borrowing money Buying equipment Issuing shares of stock
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The part of a life insurance policy guaranteed to be true is called a ( n ) : representation waiver warranty exclusion
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PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $80 million on equipment with an assumed life of 5 years and an assumed salvage value of $25 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $70 million. A new modem pool can be installed today for
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Denise Inc. 2012 2011 Inventory Turnover 91.25 14.60 Days of inventory on hand (DOH) 4 25 Receivables turnover 8.11 9.36 Days of sales outstanding (DSO) 45 39 Accounts payable turnover 4.24 3.76 Days of payables outstanding 86 97 Total Asset Turnover 1.5 2.0 Cash Conversion Cycle (37) (33) Zara Ltd. 2012 2011 Inventory Turnover 73.00 30.42 Days of