3. 7. Using Miller-Orr [LO 19.2] Slap Shot Company has a fixed cost of $40 associated with...

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3. 7.

Using Miller-Orr [LO 19.2] Slap Shot Company has a fixed cost of

$40 associated with buying and selling marketable securities. The interest rate is currently 0.013 per cent per day and the firm has estimated that the standard deviation of its daily net cash flows is $80.

Management has set a lower limit of $1 500 on cash holdings.

Calculate the target cash balance and upper limit using the Miller-Orr model. Describe how the system will work.

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Fundamentals Of Corporate Finance

ISBN: 9781743768051

8th Edition

Authors: Stephen A. Ross, Rowan Trayler, Charles Koh, Gerhard Hambusch, Kristoffer Glover, Randolph W. Westerfield, Bradford D. Jordan

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Question Posted: Oct 04, 2024 02:00 AM

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3. 7. Using Miller-Orr [LO 19.2] Slap Shot Company has a fixed cost of $40 associated with...

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Fundamentals Of Corporate Finance

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