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Finance Questions and Answers October 9, 2024

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Private equity firm DiamondGrey is considering investing in solar energy company Few-Drums, but only if the company's debt-to-equity ratio is well below 50%. The target company's financial report shows shareholders' equity of USD 1.2 billion and bank debt of USD 0.7 billion. The integrated report, which takes into account natural, social, human

Zach bought a new car. Zach took the car in to the dealer and asked for new sub-woofers, a new spoiler, and seat covers for an additional fee. Are the additional add-ons at the dealership considered a sale of goods? a. Yes, in this transaction, the sale of goods predominates. b. No, these are add-ons to his original good purchased. c. Yes, he had

Stock Split JPix management is considering a stock split. JPix currently sells for $60 per share and a 3-for-1 stock split is contemplated. What will be the company's stock price following the stock split, assuming that the split has no effect on the total market value of JPix's equity? Round your answer to the nearest cent. $

Discuss the tradeoff between taking on a large load of debt due to its lower cost and increased probability of financial distress when too much debt is used on the other hand. How does this relate to optimal capital structure?

Write a 1 page summary of Otis's business, using the Business description section of the 10-K. It should summarize the key points but also be a concise description. In addition, use the Press releases for FY2021 and FY2020 earnings to "spread" the numbers for the last 3 years. You can use the Otis Model to lay out the numbers. You will hand in the
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Summarize the highlights of the video talk and connect it to chapter 8 around the concepts of Funding your business. This talk is 15 years old how do you think VC financing has changed (or not)? Evidence? Post your 300+ word reply to the task above. Good morning. My name is David Rose. I am a serial entrepreneur turned serial investor. And by the

The total market value of the common stock of the Okefenokee Real Estate Company is $6 million, and the total value of its debt is $4 million. The treasurer estimates that the beta of the stock is currently 1.5 and the expected risk premium on the market is 6%. The Treasury bill rate is 4%. Assume that the company debt is risk-free and the company

Globex Corp. will use _______ by borrowing funds to increase the return on the owners equity. a. common stock b. preferred stock c. financial leverage d. equity capital risk-return ratio

PPE Inc. plans to pay a dividend of $2.10 per share next year and increase it by 2.5% annually going forward. Shareholders expect a return of 8.5% on PPEs stock. How much would they pay for it now? B. $42.00 C. $24.71 D. $19.09 A. $35.00

ROBLEMS Lynn paid $12.75 for 15 candles. At this rate, how much would it cost Lynn to buy 10 candles? A $1.27

Suppose we estimate the following regression yt= + xt+ ut. The output of the regresion is follows: = 0.03, SE( ) = 0.02, = 0.9, SE( ) = 0.04, and T = 120. (a) Using a two tailed t-test, at the 5% level of significance, test the hypothesis = 0. Report the 95% confidence interval for . (b) Using a two tailed t-test, at the 5% level of significance,

Calculate the purchase price of an annuity paying $200 per month for 10 years with a lump payment of $2000 on the same day as the last payment of $200, at 6.5% compounded monthly. Using BAll Plus Calculator

The price per share of common stock of America's Storage is $54. The company paid common stock dividend of $0.80 per share most recently and dividend is expected to at 3.20% per year for the foreseeable future. Compute the required rate of return (Ks) on the common stock

You are reviewing a new project and have estimated the following cash flows: Year 0: CF = -165,000; Year 1: CF = 63,120; Year 2: CF = 70,800; Year 3: CF = 91,080. Your required return for assets of this risk level is 12%. Compute the NPV for the project

2. Acme Inc. just released a new product that will allow them to increase their current (Do) $1.00 dividend by 40%. 30%, and 20% for each of the next three years, after which dividends will go back to their normal 5% yearly growth. If the required return for Acme's stock is 15%. a. What is the current price of the stock? b. Find the Dividend Yield

You bought a stock one year ago for $48.21 per share and sold it today for $56.03 per share. It paid a $1.92 per share dividend today. What was your realized return? The realized return was %. (Round to one decimal place.)
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ontrell, an active duty servicemember, receives student loan repayment benefits of $8,000 annually. In September 2022, Dontrell was deployed to the Persian Gulf. How much of Dontrell's student loan repayment benefits are nontaxable, due to his service in a combat zone for 2022? $2,000 $2,667 $4,000 $8,000

- Briefly discuss Internal and External growth strategies. Also discuss advantages and disadvantages of internal growth strategies

Companies that are much more uncertain future financing need should borrow more, because they like to hold back some debt capacity. True or False

6. Dividend Discount Model (DDM) a. Evergrey Corporation just paid its annual dividend of $2.00 pershare. Thefirm is expected to grow at a rate of 15 percent for the next three years and then at 6 percent per year thereafter. The required return of the stock of Evergrey Corp is 12%. Find the expected price of the stock in one year. (6 marks) b. A

237 0 PART 1 Razul and Amy decided to start a partnership called SA Consulting on January 1, 2020. Each of them contributed a number of items to the partnership, which are listed below. All tangible assets are listed at their market value. Razul Cash $48,100 Equipment 197.900 Bank Loan 86,000 Amy Cash Furniture Accounts Payable $65,200 179.800
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You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $1.75 a share at the end of the year (D 1 = $1.75) and has a beta of 0.9. The risk-free rate is 4.5%, and the market risk premium is 6%. Justus currently sells for $47.00 a share, and its dividend is expected to grow at some constant rate, g.

can someone answer these questions and show work. Single Cash flow A. PV: Firm ABC Inc. has a debt of $ 50,000 due in six years, the firm has the following three investment options today: 1. Annual compounding investment with annual percentage rate of 12 % 2. Semi-annual compounding investment with annual percentage rate of 12 % 3. Monthly
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You are considering a project that will require an initial outlay of $54,200. This project has an expected life of 5 years and will generate after-tax flows to the company as a whole of $20,608 at the end of each year over its 5-year life. In addition to the $20, 608 cash flow from operations during the fifth and final year, there will be an

5 An example of shopping products of a. cars, clothing, furniture, televisions, computer Ob. cars, clothing, furniture, televisions, life insurance O c. cars, designer clothes, furniture, televisions. d. cars, clothing, fast food, televisions
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Note: Please include your R codes in an appendix at the end of your answers, 1. Bob, a budding investor, wants to model the movement of stock price over time. Let X denote the stock price movement indicator at time t, given by: 1 X := { if stock price goes up, if stock price remains the same, if stock price goes down. its Bob assumes that {X} is a
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Problem 10-30 Break-Even Replacement [LO2] Light emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.55 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.90 and lasts for 12,000 hours. A kilowatt-hour is
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all x value 6 2) Please answer the questions below for Crime and Punishment (CP) and The Brothers Karamazov (BK) Corporations: (show all your computations) Economy Probability Recession Below Average Average Above Average Boom 0.15 0.20 0.30 0.20 0.15 Expected Returns CP Inc. BK Inc. -0.6x -0.4x -0.2x -0.1x 0.1 x 0.2x 0.2x 0.3x 0.4x 0.5x a)
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Crystal Glass Co projects to pay $380, SA 10, and $1.25 as dividends at the end of the next 3 years, respectively. After that, beginning 4 years from now, the dividend is expected to increase by 2.32 percent annually. What is one share of this stock worth to you today if you require a 125 percent rate of retur? O A. $36.62 OB. $45.60 OC. $39.60
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Which one of the following best describes fundamental risk? Multiple Choice You buy a stock that you believe is underpriced, and the underpricing persists for a long time, hurting your short - term results. Your models indicate a stock is mispriced, but you are not sure if this is a real profit opportunity or a model input error. A stock is

FASTER PLEASE I NEED THE ANSWER An individual has the following utility function u(w)=2w0.5 +10 using the expected utility, order the following prospects in terms of preference, from the most to the least preferred. P1(0.9,3,500,500) P2 (0.7,3700, 400) P3 (0.5, 5000, 350) What is the certainty equivalent level for P3
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You wish to borrow $2,000 to be repaid in 12 monthly installments of $170.30. The effective monthly interest rate is You wish to borrow $2,000 to be repaid in 12 monthly installments of $175.30. The effective annual interest rate is ___. (use a percentage number, rounded to the nearest 100th, without % sign. For example, 1.235% 1.24) You wish to

(Compounding using a calculator and annues duo) Imagine that Homer Simpson actually invested $100,000 5 years ago at a 75 percent annual interest rate the invests an additional 51.500 a yont at the beginning of each year for 20 years at the same 75 percent annual rato, how much money wil Homer have 20 years from TO a. Homer invested 100.000 5
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Case 2 Application of Stock Valuation Methods How Low Can It Go? Dwayne sat at his desk wondering what he should do. Having opted for early retirement, six months ago, he knew that he needed to make some changes in the way his investment portfolio was structured. However, being primarily focused on science during his career, he had a fairly

Projected Spontaneous Liabilities Smiley Corporation's current sales and partial balance sheet are shown below. This year Sales $10,000 Balance Sheet: Liabilities Accounts payable Notes payable Accruals Total current liabilities Long-term bonds Total liabilities Common stock $ 1,500 $ 3,000 $ 2,000 $ 6,500 $ 2,000 $ 8,500 $ 1,000 $ 3,000 $ 4,000
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Which of the following is true regarding the coupon rate on many corporate bonds? Group of answer choices It is often times fixed for the life of the bond. It is the same as the YTM. It is usually higher than the YTM. It is usually lower than the YTM. Which of the following statements are true concerning common stock? Group of answer choices

Use following information to calculate Ratios: Salinas Limited Balance Sheet At December 31, 2012 Liabilities and Equity $ 72 Accounts Payable 88 Bank Loan, non-current 100 40 Preferred Shares Common Shares 320 Retained Earnings $620 Total Liabilities and Equity Assets Cash Accounts Receivable Merchandise Inventory Prepaid Expenses Property,
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Value of Operations Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 8%. The company's weighted average cost of capital is 14%. a. What is the terminal, or horizon, value of operations? (Hint:
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Ghost, Inc., has no debt outstanding and a total market value of $185,000. Earnings before interest and taxes, EBIT, are projected to be $29,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 30 percent higher. If there is a recession, then EBIT will be 40 percent lower. The company is considering
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(3 points) Most scholarships are established by making a one time deposit into an account. The scholarship money is then taken from the earned interest on the account at the end of each investment year. How much money should you deposit into an account earning an annual interest rate of 2.706% compounded continuously to establish an annual
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You wish to buy a $15,000 car. The auto dealer offers you a three-year loan with a 9.5 percent APR. What are the monthly payments? (Round your answer to two decimal places, for example, if the answer is 20.20 and you type 20.2, it will be wrong.)
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