Questions and Answers of Finance Applications And Theory

Tater and Pepper Corp. reported free cash flows for 2021 of $39.1 million and investment in operating capital of $22.1 million. Tater and Pepper incurred $13.6 million in depreciation expense and
Mr. Husker’s Tuxedos, Corp. began the year 2021 with $256 million in retained earnings. The firm earned net income of $33 million in 2021 and paid dividends of $5 million to its preferred
Mikey’s Bar and Grill has total assets of $15 million of which $5 million are current assets. Cash makes up 10 percent of the current assets and accounts receivable makes up another 40 percent of
Sophie’s Tobacco Shop has total assets of $91.8 million. Fifty percent of these assets are financed with debt of which $28.9 million is current liabilities. The firm has no preferred stock, but the
You are considering a stock investment in one of two firms (NoEquity, Inc., and NoDebt, Inc.), both of which operate in the same industry and have identical EBITDA of $37.7 million and operating
You are considering a stock investment in one of two firms (AllDebt, Inc., and AllEquity, Inc.), both of which operate in the same industry and have identical EBITDA of $14.7 million and operating
Consider a firm with an EBITDA of $1,100,000 and an EBIT of $1,000,000. The firm finances its assets with $4,500,000 debt (costing 8 percent, all of which is tax deductible) and 200,000 shares of
The Dakota Corporation had a 2021 taxable income of $33,365,000 from operations after all operating costs but before (1) interest charges of $8,500,000, all of which is tax deductible; (2) dividends
Consider a firm with an EBITDA of $13,00,000 and an EBIT of $10,500,000. The firm finances its assets with $50,000,000 debt (costing 6.5 percent) and 10,000,000 shares of stock selling at $10.00 per
Suppose that in addition to $17.85 million of taxable income, Texas Taco, Inc., received $1,105,000 of interest on state-issued bonds and $760,000 of dividends on common stock it owns in ArizonaTaco,
The 2021 income statement for Duffy’s Pest Control shows that depreciation expense was $197 million, EBIT was $440 million, and the tax rate was 21 percent. At the beginning of the year, the
Listed below is the 2021 income statement for Tom and Sue Travels, Inc. Tom and Sue Travels, Inc. Income Statement for Year Ending December 31, 2021 (in millions of dollars) Net sales Less: Cost of
The 2021 income statement for Egyptian Noise Blasters shows that depreciation expense is $85 million, NOPAT is $246 million. At the end of the year, the balance of gross fixed assets was $655
You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2021a. Net sales = $38,250,000. b. Cost of goods sold = $22,070,000.c. Other operating expenses =
What’s the present value, when interest rates are 7.5 percent, of a $50 payment made every year forever?
Ramakrishnan Inc. reported 2024 net income of $15 million and depreciation of $2,650,000. The top part of Ramakrishnan, Inc.’s 2024 and 2023 balance sheets is listed below (in millions of
Use the following information to find dividends paid to common stockholders during 2024. Balance of retained earnings, December 31, 2023 Plus: Net income for 2024 Less: Cash dividends paid Preferred
What is the difference between current liabilities and long-term debt?
The Fitness Studio, Inc.’s income statement lists the following income and expenses: EBITDA = $650,000, EBIT = $538,000, interest expense = $63,000, and net income = $435,000. Calculate the taxes
What is bonus depreciation? How did the Tax Cuts and Jobs Act of 2017 temporarily extend and modify bonus depreciation?
Chapman & Power Inc., is concerned about the taxes paid by the company. In addition to $135,000,000 of taxable income, the firm received $15,500,000 of interest on state-issued bonds and
How did the Tax Cuts and Jobs Act of 2017 change corporate tax laws?
Usher Sports Shop had cash flows from investing activities of -$4,364,000 and cash flows from financing activities of -$5,880,000. The balance in the firm’s cash account was $1,615,000 at the
How did the Tax Cuts and Jobs Act of 2017 change the tax deductibility of corporate interest in debt?
The income statement for Duffy’s Pest Control shows that depreciation expense was $197 million, EBIT was $440 million, and the tax rate was21percent. At the beginning of the year, the balance of
For each of the following actions, determine what would happen to the current ratio. Assume nothing else on the balance sheet changes and that net working capital is positive.
Assume that you contribute $150 per month to a retirement plan for 20 years. Then you can increase the contribution to $250 per month for another 20 years, and finally, $400 per month for the last 10
What is the difference between time series analysis and cross-sectional analysis?
What is the future value of $500 deposited for one year earning an 8 percent interest rate annually.
Consider the following annual returns of EsteeLauder and Lowe’s Companies:Compute each stock’s average return, standard deviation, and coefficient of variation. Which stock appears better? Why?
Determine the interest rate earned on a $2,300 deposit when $3,500 is paid back in three years.
What annual rate of return is earned on a $4,000 investment made in year 2 when it grows to $6,500 by the end of year 7?
What is the present value of a $100 annual payment over 10 years if interest rates are 4 percent using both end-of-year and beginning-of-year payments?
For the following economic state probability distribution, determine the expected return and the standard deviation of the expected return. 1 2 234567 A Fast growth Slow growth No
You realize that you can retire when you have $1 million in assets. You currently have $500,000 in retirement assets and contribute $500 more each month? If your investment portfolio earns an 8%
Consider the following annual returns of Clearwater Beer and Bed & Bath Corp:Compute each stock’s average return, standard deviation, and coefficient of variation. Which stock appears better?
You have a portfolio of six stocks. The portfolio weights of each stock and each stock's beta are shown below. What is your portfolio beta? 1 -NO A 2 Wingbat 3 Flow Exchange 4 Mega Metalurgy 5 Fly by
Suppose a firm has had the historic sales figures shown as follows. What would be the forecast for next year’s sales using the naïve approach?
What is a forward interest rate?
Explain how mortgage-backed securities work.
Waller Co. paid a $0.137 dividend per share in 2000, which grew to $0.55 in 2012. This growth is expected to continue. What is the value of this stock at the beginning of 2013 when the required
You own the portfolio of five stocks shown below. Given the amount owned of each stock and their respective betas, what is the beta of your portfolio? If the market return is expected to be 9.5
What’s the source of firm-specific risk? What’s the source of market risk?
Suppose a firm has a retention ratio of 35 percent and net income of $5 million. How much does it pay out in dividends?
What is the difference between a fixed-rate and a floating-rate loan?
What is venture capital?
If the spot exchange rate between the U.S. dollar and the Singapore dollar is $1 = SG$1.5266 and the 3-month expected exchange rate is $1 = SG$1.5305, then what is the expected inflation relationship
What is the Herfindahl-Hirschman Index? How is it calculated and interpreted?
What is a credit-scoring model?

Showing 500 - 600 of 549

1
2
3
4
5
6