Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The Thomas Co. is analyzing a proposed expansion project. Currently, the company owns 15 acres of land, which it purchased for $6 million 5 years ago. The land is currently valued at $7.2 million and is totally debt-free. The company wants to build a new distribution center at a cost of $19 million dollars, which will be depreciated on a straight-line basis over 30 years. An additional $500 thousand is required for developmental design plans and consulting fees. The center will require an increase in current assets of $2 million during the project life of 20 years. Management has estimated that the facility will increase the firm’s earnings before taxes by $2.5 million a year. After 20 years, the company plans to sell the facility, including the land, for an estimated $15 million.
The company has 50,000 shares of common stock outstanding at a market price of $46 a share. This stock just paid an annual dividend of $2.80 a share. The dividend is expected to increase by 4 percent annually. They also have 10,000 shares of 5 percent preferred stock with a market value of $51 a share. The company has a 8 percent, semiannual coupon bond issue outstanding with a total face value of $1.5 million. The bonds are currently priced at 101 percent of face value and mature in 11 years. The tax rate is 35 percent.
Should the Thomas Co. pursue the expansion at this point in time? Why or why not?
Beryl’s Iced Tea currently rents a bottling machine for $55,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options: Purchase the machine it is currently renting for $150,000. Thi..
A portfolio is invested 12 percent in Stock G, 52 percent in Stock J, and 36 percent in Stock K. The expected returns on these stocks are 8 percent, 14 percent, and 16 percent, respectively. What is the portfolio's expected return? (Round your answer..
The current spot exchange rate is $1.55 = €1.00 and the three-month forward rate is $1.60 = €1.00. Consider a three-month American call option on €62,500 with a strike price of $1.50 = €1.00. If you pay an option premium of $5,000 to buy this call, a..
You are analyzing two companies that manufacture electronic toys – Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is relatively new company that has been operation for only the past two years. (high or low..
Binomial Tree Farm’s financing includes $7 million of bank loans. Its common equity is shown in Binomial’s Annual Report at $6.87 million. It has 500,000 shares of common stock outstanding, which trade on the Wichita Stock Exchange at $16 per share. ..
The principal-agent problem arises because _____ Buying bonds in a firm that has a high net worth is beneficial to the investor because _____. Governments regulate financial systems because _____
The present value of $1,000 received at the end of year 1, $1,200 received at the end of year 2, and $1,300 received at the end of year 3, assuming an opportunity cost of 7 percent, is _____. If a United States Savings bond can be purchased from $29...
A bond with face and redemption amount of $3000 with annual coupons is selling at an effective annual yield rate equal to twice the coupon rate. The present value of the coupons is equal to the present value of the redemption amount. What is the sell..
The statement of cash flows is the last of the four financial statements we discussed. Explain why this statement is important to investors and how it complements the income statement and balance sheet. You should be able to answer this question in s..
If the a bond is quoted at a price of 109.385 on February 1, 2008 that pays a coupon of 8% and matures in 9 years, what is the premium to par?
A US$ corporate bond can never have a yield lower than a US government bond with the same maturity. If interest rates rise a 10-year zero coupon bond would fall by about half as much as a 5-year zero coupon bond. The capital appreciation on the Nikke..
Identify the sources of short/medium and long term finances available to Citilink now and in near future. You may refer to Appendix I to support your findings, if needed.
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd