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Next year's expected net income after tax, but before new financing -------- $80 Million
Sinking-fund payments due next year on existing debt ---------------------------$23 Million
Interest due next year on existing debt------------------------------------------------$14 Million
Company Tax Rate--------------------------------------------------------------------------35%
Common Stock Price-----------------------------------------------------------------------$32
Common Shares outstanding------------------------------------------------------------30 Million
1. Calculate the times interest earned ratio for next year assuming the firm raises $40 million of new debt at an interest rate of %6
2. Calculate the times burden covered ratio for next year assuming annual sinking fund payments on the new debt will equal $10 million.
Suppose you plan to borrow $10000 from the bank and have two options to pay back: What is EAR implied in each option? Which one do you prefer and explain why?
State the intrinsic value and the speculative premium for the call and put options. Why is the speculative premium so small for each option - Use the Black-Scholes OPM to find C.
What is the rational for the Federal Reserve Board keeping the federal rate to a nominal rate in recent years. How does this effect the financial markets.
Write about the cause and the effect which until today. Also, write about how the government or the market itself to solve the problem.
If the CAPM is used to estimate the cost of equity capital, the expected excess market return is equal to
Discuss the topic-Should a multinational firm risk overhedging - creditors may prefer that the multinational firms maintain low exposure to exchange rate risk. Consequently, multinational firms that hedge their exposure to risk may be able to borro..
A bank offers two 30 year, fixed rate, fully amortizing LPMs: an 85% LTV loan at 6%, and an 80% LTV loan at 5.5%. What is the marginal cost of borrowing if the loan is going to be held for 10 years?
The last dividend paid by Marquette Inc. was $1.25. The dividend growth rate is expected to be constant at 15% for 3 years, after which dividends are expected to grow at a rate of 6% forever. If the firm's required return (rs) is 11%, what is its ..
A stock has had returns of -26 percent, 6 percent, 34 percent, -5 percent, 28 percent, and 19 percent over the last six years. What are the arithmetic and geometric returns for the stock?
The company with the common equity accounts shown here has declared a 4-for-one stock split when the market value of its stock is $33 per share. The firm’s 80-cent per share cash dividend on the new (post split) shares represents an increase of 25 pe..
Great Wall Pizzeria issued 14-year bonds one year ago at a coupon rate of 8.4 percent. If the YTM on these bonds is 9.4 percent, what is the current bond price?
Based on the organization you selected, write a critical risk assessment and milestones schedule of 350-500 words (plus a spreadsheet) that addresses the following (guidelines): Describe the preferred timing and objectives of your business plan.
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