You are required to submit a bid to supply 200,000,000 widgets per year to the State of Illinois for the next five years. Your company has an idle tract of real estate that cost $1,500,000 ten years ago; if your company sold the land today, it would ..
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The Five & Dime store has a cost of equity of 15.8%, a pretax cost of 7.7%, and a tax rate of 35%. What is the firm's weighted average cost of capital if the debt-equity ratio is 0.40?
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Raman Patel has a personal automobile policy (PAP) with coverage of $25,000/$50,000 for bodily injury liability, $25,000 for property damage liability, $5,000 for medical payments, and a $500 deductible for collision insurance. Raman loses control an..
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A stock is trading at $40 per share. The stock is expected to have a year-end dividend of $2 per share (D1 = $2), and it is expected to grow at some constant rate g throughout time. The stock's required rate of return is 14%
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Bella, Inc. has net income of $3,500,000. The company‘s depreciation expense is $650,000, its interest expense is $200,000, and its income tax rate is 40%. What is its taxable income?
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Assume that all interest rates in the economy decline from 10% to 9%. Which of the following bonds would have the largest percentage increase in price?
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Javits and Son’s common stock currently trades at $30.00 a share. It is expected to pay an annual dividend of $3.00 per share at the end of the year (D1= $3.00), and the constant growth is 5% a year. (A) What is the company’s cost of common equity if..
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Ross has decided that he wants to build enough retirement wealth that, if invested at 7 percent per year, will provide him with $4,200 of monthly income for 30 years. To date, he has saved nothing, but he still has 20 years until he retires. How much..
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It can be argued that a firm’s dividend policy is irrelevant but that changes to dividend policy are relevant. Explain this argument by discussing what factors a firm should consider in setting its dividend policy and why changing dividend policy wil..
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Mr. Daniel Colbert decides to install a fuel storage system for his farm that will save him an estimated 6.5 cents/gallon on his fuel cost. He uses an estimated 20,000 gallons/year on his farm. Initial cost of the system is $10,000 and the annual mai..
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Net Income and OCF. During the year, Belyk Paving Co. had sales of $2,600,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,535,000, $465,000, and $520,000, respectively. In addition, the company had an in..
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In 1986 Standard Oil issued some bonds. At T, investors received $1000 and an additional amount based on the oil price at that time. The additional amount was 170 times the excess of the oil price over $25. The maximum additional amount paid was $255..
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