Question
1.Likeline, Inc., has sales of $445,000, costs of $173,000, depreciation expense of $72,000, interest expense of $36,000, and a tax rate of 35 percent. What
1.Likeline, Inc., has sales of $445,000, costs of $173,000, depreciation expense of $72,000, interest expense of $36,000, and a tax rate of 35 percent. What is their net income?
Question 2.2. Hammett, Inc. has sales of $19,570, costs of $9,460, depreciation expense of $2,130, and interest expense of $1,620. If the tax rate is 35 percent, what is the operating cash flow, or OCF?
Question 3.3.App Co. issued 15-year, $1,000 bonds at a coupon rate of 6 percent. The bonds make annual payments. If the YTM on these bonds is 5 percent, what is the current bond price?
Question 4.4.Sixteenth Bank has an issue of preferred stock with a $10 stated dividend that just sold for $70 per share. What is the banks cost of preferred stock? (Show your work and round your answer to two decimal places.)
Question 5.5. You own a portfolio that has $2,500 invested in Stock A and $3,500 invested in Stock B. If the expected returns on these stocks are 10 percent and 16 percent, respectively, what is the expected return on the portfolio? (Show your work.)
Question 6.6.A stock has a beta of 1.25, the expected return on the market is 12 percent, and the risk-free rate is 2 percent. What must the expected return on this stock be? (Show your work and express your percentage in two decimal places)
Question 7.7 Suppose Tom, Ltd. just issued a dividend of $2.00 per share on its common stock. The companys dividends have been growing at a rate of 7%. If the stock currently sells for $50.00, what is your best estimate of the companys cost of equity? (Show your work.)
Question 8.8.Given the following information, calculate the weighted average cost for the Han Corp. Percent of capital structure: Preferred stock 15% Common equity 60% Debt 25% Additional information: Corporate tax rate 34% Dividend, preferred $9.50 Dividend, expected common $1.50 Price, preferred $100.00 Growth rate 9% Bond yield 6% Price, common $75.00
Question 9.9.What are some important factors to consider when conducting a credit evaluation and scoring?
Question 10.10.Explain the concept of the stakeholder in contemporary finance.
Question 11.11 What are the factors that make up the capital asset pricing model? Where would you typically find the data for these factors?
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