Cayman Corporation just paid a dividend of $4.00 on its common stock. Expectations for growth in earnings are expected to be unusually high over the next 2 years. As such, Cayman expects its dividend to grow at a rate of 30% over the next 2 years aft..
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Mutual fund A earned 10 percent while B earned 8 percent. The standard deviations of the returns were 10 percent and 7 percent, respectively. According to the Sharpe ratio, which fund performed better?
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David Wright, CFA, an analyst with Blue River Investments, is considering buying a Montrose Cable Company corporate bond. He has collected the following balance sheet and income statement information for Montrose as shown in Exhibit 10.10. Specifical..
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We are evaluating a project that costs $1,120,000, has a ten-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Calculate the accounting break-even point. Calculate the base-case cash ..
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Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $820,322, $863,275, $937,250, $1,017,610, $1,212,960, and $1,225,000 over the next six years. If the appropriate disco..
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Which of the following statements concerning junk bonds is most correct?
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An American Depository Receipt (ADR) is a security issued by a U.S. bank and traded on a U.S. stock exchange that represents a specific number of shares of a foreign stock. Siemens AG has an ADR that trades on the NYSE and is equivalent to one share ..
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In January 2007, the average price of an asset was $28,658. 7 years earlier, the average price was $20,808. What was the annual increase in selling price? In percentage form
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Returns Year X Y 1 18 % 22 % 2 32 33 3 8 18 4 – 25 – 30 5 10 24 Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. X Y Average return % % Variance Standard deviation % %
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Medical Research Corporation has been expanding its production capacity and research to introduce a new product line. Current plans call for spending $ 100 million in four projects of the same magnitude ($ 25 million each), but offer different perfor..
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Given the following information, calculate the Effective Borrowing Cost (EBC). Loan amount: $175,000, Term: 30 years, Interest rate: 7 %, Payment: $1,164.28, Discount points: 1, Origination fee: $3,250. Assume the loan is held until the end of year 1..
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Your car dealer is willing to lease you a new car for $459 a month for 84 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 5.6 percent, what is the current value of th..
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