You are considering a project with an initial cost of $7,800. What is the payback period for this project if the cash inflows are $1,100, $1,640, $3,800, and $4,500 a year over the next four years, respectively?
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A 5-year maturity 6% coupon rate bond is selling to yield 8%. The bond pays interest semi-annually. One year later, interest rates decrease from 8% to 5%. Par = 1,000. What is the current price of the 5-year maturity 6% coupon bond selling to yield 8..
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You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $210,000. The truck falls into the MACRS 10-year class, and it will be sold after 10 years for $21,000. What will the cash fl..
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Technology has a capital budget of $850,000, it wants to maintain a target capital structure of 35% debt and 65% equity, and it also wants to pay a dividend of $400,000. If the company follows a residual dividend policy, how much net income must it e..
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Harrison Clothiers' stock currently sells for $39 a share. It just paid a dividend of $1.75 a share (that is, D0 = 1.75). The dividend is expected to grow at a constant rate of 9% a year. What stock price is expected 1 year from now? What is the requ..
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Assume that you worked for G.E. in cincinnati at an annual salary of $60000. The company transfers you toBoston,MA and gives you a 30% increase in pay after the COLA (cost of limit adjust). Calculate the COLA for the transfer and then increase your s..
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Your portfolio is 100 shares of Sunny Morning, Inc. The stock currently sells for $85.93 per share. The company has announced a dividend of $3.65 per share with an ex-dividend date of April 19. Assuming no taxes and no news or other surprises, how mu..
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Barton Industries expects next year's annual dividend, D1, to be $2.10 and it expects dividends to grow at a constant rate g = 5%. The firm's current common stock price, P0, is $22.40. If it needs to issue new common stock, the firm will encounter a ..
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Calculate the PV of an annuity due, given the following information: (Extension Population Growth): If the current population of city X is 1,000,000 citizens, how long would it take for the city to reach 2,000,000 citizens if the growth rate was 5%?
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What is the value of a bond that matures in 30 years, makes an annual coupon payment of $100, and has a par value of $1000? Assume a required rate of return of 9%, and round your answer to the nearest $10
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Z. Company plans to raise $100 million. The flotation cost is expected ti be 8% issuing debt, 6% for issuing preferred stock and 5% for issuing common stock. How much additional capital will they need ti raise in order ti procure a net amount of $100..
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Richard is using the capital retention approach to determine how much life insurance to purchase. Richard would like to provide $45,000 per year to his family, forever, if he dies. If life insurance proceeds can be invested to earn a 5 percent annua..
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