Consider $1000 par value bond with a 7 percent annual coupon. The bond pays interest annually. There are 9 years remaining until maturity. What is the current yield on the bond assuming that the required return on the bond is 10 percent?
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In a slow year, Deutsche Burgers will produce 2.0 million hamburgers at a total cost of $4.1 million. In a good year, it can produce 5.0 million hamburgers at a total cost of $5.6 million. What are the fixed costs of hamburger production? What is the..
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Tarzak Inc. has earnings of $10 per share, and investors expect that the earnings per share will grow by 3 percent per year. Furthermore, the mean PE ratio of all other firms in the same industry as Tarzak is 15. Tarzak is expected to pay a dividend ..
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Describe the different types of leases. Explain how they would benefit managers for financial planning. Select one lease option and describe the advantages and disadvantages of selecting that option in your role as manager. In response to your peers,..
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Ralf owns a home with a fireplace and a generator. He has stacks of wood and several 55-gallon drums of camping oil in his garage. He likes to go camping and leaves his home for several days at a time, often with a fire burning in his fireplace. In a..
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An investor was expecting a 18% return on his portfolio with beta of 1.25 before the market risk premium decreased from 8% to 6%. Based on this change, what return will now be expected on the portfolio?
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Internal Growth Rate Leash N Collar reported a profit margin of 9.5%, total asset turnover ratio of 3 times, debt-to-equity ratio of 0.9 times, net income of $550,000, and dividends paid to common stockholders of $350,000. The firm has no preferred s..
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Consider a mutual fund with 171 million dollars in assets at the start of the year, and 21 millon shares outstanding. If the gross annual return last year was 13.4 percent, and the fund charges a total expense ratio of 1.5 percent of end-of-year valu..
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You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $85,000 per year for the next two years, or you can have $74,000 per year for the next two years, along wi..
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A project has an initial cost of $68,000 and a four-year life. The company uses straight-line depreciation to a book value of zero over the life of the project. The projected net income from the project is $2,700, $2,200, $2,600, and $4,500 a year fo..
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PING, INC. projects a rate of return on equity of 20%. Management plans to pay 70% of earnings as dividends. Earnings this year will be $3 per share, and investors expect a 12 rate of return on the stock. Calculate the sustainable growth rate.
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To look at the firm's dividend policy, you look at RAD's financial statements for the last year. RAD, in 2013, had net income of $118 million (operating income $1,132 million), capital expenditures of $315.846 million, depreciation and amortization o..
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