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Roybus, Inc,. a manufacturer of flash memory , just reported that its main production facility in Taiwan was denoted in a fire, Although the plant was fully insured, the loss of production will decrease roybus's free cash flow by $180 million at the end of this year and by $60 million at the end of next year.
a. if roybus has 35 million shares outstanding and a weighted average cost of capital of 13%, what change in roybus's stock price would yo expect upon this announcement?(assume the value of roybus's debt is not affected by the event)
b. would you expect to be able to sell roybus stock on hearing this announcement and make a profit? Explain.
St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has no salvage value. However, even though it is old, it is still functional as originally designed and can be used for quite a while longer. The applicable corporate..
Which of the following bonds makes no interest payments?
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Assume you have the following situations. Using the time value of money (TVM) concepts (formulas or tables) calculate the correct amount in each situation.
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You construct a price-weighted index of 78 stocks. At the beginning of the day the index is 9,364.36. During the day, 77 stock prices remain the same, and one stock price increases $4.30. At the end of the day, your index value is 9,417.95. What is t..
A financial adviser claims that a particular stock earned a total return of 10% last year. During the year the stock price rose from $30 to $32.50. What dividend did the stock pay?
The company is some what unsure about the assumption of a growth rate of 3 percent in its cash flows. At what constant growth rate would the company just break even if it still required a return of 12 percent on investment?
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