Looking for advance corporate finance tutor specialized on currency, libor rate calculation and dividend distribution .

1--Company A, a low-rated firm, desires a fixed-rate, long-term loan. Company A presently has access to floating interest rate funds at a margin of 1.5% over LIBOR. Its direct borrowing cost is 13% in the fixedrate bond market. In contrast, company B, which prefers a floating-rate loan, has access to fixed-rate funds at 11% and floating-rate funds at LIBOR+0.5%. Suppose both companies enter into an interest rate swap and split the spread differential; that is, they share the spread differential equally. With the swap deal, what interest rate would Company B pay for its floating-rate funds? Note: You can just assume that both companies enter into the swap directly with each other without going through a bank, or you can assume that they go through a bank but the gain to the bank is zero. Select one: a. LIBOR-.02% b. LIBOR+.2% c. LIBOR+.5% d. LIBOR+0% 2---Company A desires a fixed-rate, long-term loan. Company A presently has access to floating interest rate funds at a margin of 1.5% over LIBOR. Its direct borrowing cost is 13% in the fixed-rate bond market. In contrast, company B, which prefers a floating-rate loan, has access to fixed-rate funds at 10.5% and floating-rate funds at LIBOR+1%. Both companies enter into an interest rate swap with Bank C. Based on the swap, Bank C would gain 0.6% and the two companies would split the remaining spread differential equally. With the swap deal, what interest rate would Company B pay for its floating-rate funds? Select one: a. LIBOR+.7% b. LIBOR+.3% c. LIBOR+1.5% d. LIBOR-1% e. LIBOR-.6% f. LIBOR+1.2% 3----Company E presently has access to floating interest rate funds at a margin of 1.8% over LIBOR. Its direct borrowing cost is 12% in the fixed-rate bond market. In contrast, company F has access to fixed-rate funds at 11.2% and floating-rate funds at LIBOR+1.3%. Based on these four rates, Is the fixed rate or floating rate the better deal for Company E? Select one: a. Fixed rate b. Floating rate c. Can't tell from the information given. 4----"TARGET DISTRIBUTION RATIO and TARGET PAYOUT RATIO have the same meaning." True or False? Select one: a. False b. True 5----IYY Company is planning for $4 million in capital expenditures next year. IYY's target capital structure consists of 40% debt and 60% equity. If net income next year is $3 million and IYY follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio? Select one: a. 17.5% b. 22.5% c. 20% d. 15% e. 25% 6-----XHB is planning to expand its manufacturing capacity with a $2 million investment in new machinery. XHB plans to maintain its current 20% debt-to-total assets ratio for its capital structure and to maintain its dividend policy in which at the end of each year it distributes 40% of the year's net income. This year's net income was $8 million. How much external equity must XHB seek now to expand as planned? Select one: a. $1.5 million b. $6 million c. $0 d. $3.2 million e. $4 million 7------"A Eurodollar is a U.S. dollar deposited in a bank outside the United States." True or false? Select one: a. False b. True 8-----"MM's dividend irrelevance theory says that while dividend policy does not affect a firm's value, it can affect the cost of capital." True or false? Select one: a. True b. False 9---Firm A is considering a merger with Firm B. Based on the following data, what is the stock exchange ratio if Firm A negotiates a merger with Firm B and if all the synergy gain goes to Firm B's shareholders? Firm A: Market value of debt: $2 million Market value of equity: $4.5 million Number of shares: 0.2 million Estimated total firm value based on value-based management model: 8 million Firm B: Market value of debt: $5 million Market value of equity: $7 million Number of shares: 0.5 million Estimated total firm value based on value-based management model: 13 million Select one: a. 2.3112, that is, 1 B share exchanges for 2.3112 A shares. b. 0.5578, that is, 1 A share exchanges for 0.5578 B shares. c. 0.5578, that is, 1 B share exchanges for 0.5578 A shares. d. 2.3112, that is, 1 A share exchanges for 2.3112 B shares. e. 1.1842 that is, 1 A share exchanges for 1.1842 B shares. f. 1.1842, that is, 1 B share exchanges for 1.1842 A shares. 10-----Taiwan Semiconductor (TSM) is considering a 2-year project in the U.S. The project's expected dollar cash flows consist of an initial investment of $100,000 with cash flows of $70,000 in year 1 and $60,000 in year 2. The risk-adjusted cost of capital for the project is 20%. The current exchange rate is NT$30=$1. Risk-free interest rates in the U.S. and Taiwan are: U.S. 1-year: 4.0% 2-year: 7% Taiwan: 1-year: 3% 2-year: 5% What is the NPV of the project? Note: During the calculations, the rounding of the numbers may impact the final answer. So select the closest answer. Select one: a. -$63,166.67 b. $45,655.09 c. -$52,900.77 d. $12,532.86 e. $23,090.74 11----Suppose the exchange rate between the U.S. dollar and the Swiss francs is SF1.20 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.30 = 1 euro. What is the cross-rate between the Swiss franc and the euro; that is, how many Swiss francs can one euro buy? Select one: a. .95 Swiss francs b. 1.083 Swiss francs c. 1.56 Swiss francs d. 1.72 Swiss francs e. 1.95 Swiss francs 12----Firm A is considering a merger with Firm B. Based on the following data, what is the synergy gain from the merger? Firm A: Market value of debt: $2 million Market value of equity: $4 million Number of shares: 0.2 million Estimated total firm value based on value-based management model: 8 million Firm B: Market value of debt: $5 million Market value of equity: $6 million Number of shares: 0.5 million Estimated total firm value based on value-based management model: 12.8 million Select one: a. $3.8 million b. $2.4 million c. $1.2 million d. $5.1 million e. $4.5 million 13-----"Using the value-based management model to evaluate a merger/acquisition project does not need to take into account the incidental effects from the merger/acquisition." True or false? Select one: a. True b. False 14---"The tie-in with the US dollar ensures that all currencies are related to one another in a consistent manner - if this consistency does not exist, currency traders can profit by buying overvalued and selling undervalued currencies. This process is known as arbitrage." True or false? Select one: a. False b. True 15----"When considering the risk of a foreign investment, a higher risk might arise from exchange rate risk and political risk while lower risk might result from international diversification." True or false? Select one: a. False b. True 16----"A foreign currency will, on average, depreciate against the U.S. dollar at a percentage rate approximately equal to the amount by which its inflation rate exceeds that of the United States." True or false? Select one: a. False b. True 17----"Foreign bonds are bonds sold by a foreign borrower but denominated in the currency of the country in which the issue is sold." True or false? Select one: a. False b. True 18----Company A, a lower-rated firm, desires a fixed-rate long-term loan. Company A presently has access to floating interest rate funds at a margin of 1.2% over LIBOR. In contrast, company B, a higher-rated firm, prefers a floating-rate loan. Company B has access to fixed-rate funds at 10.5% and floating-rate funds at LIBOR+0.7%. Both companies enter into an interest rate swap with Bank C. Based on the swap, Bank C would gain 0.2% and each of the two companies would gain 0.5%. What is the current fixed rate available for Company A? Select one: a. 8.8% b. 9.6% c. 11.8% d. 13.4% e. 12.9% f. 12.2% " 19----The term Eurobond is used to designate any bond issued in one country but denominated in the currency of some other country." True or false? Select one: a. False b. True 20- NNE Company declared a 5-for-3 stock split last year, and this year its dividend is $3 per share. This total dividend payout represents a 5% increase over last year's pre-split total dividend payout. What was last year's dividend per share? Select one: a. $5.443 b. $3.751 c. $4.101 d. $4.762 e. $5.221 21---- "'1dollar=110 yens' is an indirect quote." True or false? Select one: a. True b. False 22---- A is considering a merger/acquisition with Firm B. Based on the following data, what is the stock exchange ratio if Firm A negotiates a merger with Firm B and if all the synergy gain goes to Firm A's shareholders? Firm A: Market value of debt: $4 million Market value of equity: $6 million Number of shares: 0.5 million Estimated total firm value based on value-based management model: 12 million Firm B: Market value of debt: $6 million Market value of equity: $7 million Number of shares: 0.5 million Estimated total firm value based on value-based management model: 15 million Select one: a. 1.0156, that is, 1 A share exchanges for 1.0156 B shares. b. 1.0156, that is, 1 B share exchanges for 1.0156 A shares. c. 1.4286, that is, 1 B share exchanges for 1.4286 A shares. d. 1.4286, that is, 1 A share exchanges for 1.4286 B shares. e. 2.1332, that is, 1 A share exchanges for 2.1332 B shares. f. 2.1332, that is, 1 B share exchanges for 2.1332 A shares. 23-----If a firm adopts a residual distribution policy, distributions are determined as a residual after funding the capital budget. Therefore, the better the firm's investment opportunities, the lower its payout ratio should be." True or false? Select one: a. True b. False "24---From a purely economic standpoint, stock dividends and splits are just additional pieces of paper. However, they provide management with a relatively low-cost way of signalling that the firm's prospects look good." True or false? Select one: a. False b. True 25---IYT stock is currently selling at $600 per share. A 5-to-2 stock split is conptemplated. What will be the stock price following the stock split, assuming that the split has no effect on the total market value of IYT's equity? Select one: a. $120 b. $480 c. $240 d. $1,500 e. $60 26----"A non-zero credit spread differential indicates that two markets assess the credit risk of two firms differently, which is the result of market imperfections." True or false? Select one: a. False b. True 27---Which of the following actions will best enable a company to raise additional equity capital? Select one: a. Begin a new-stock dividend reinvestment plan. b. Initiate a stock repurchase program. c. Refund long-term debt with lower cost short-term debt. d. Declare a stock split. e. Begin an open-market purchase dividend reinvestment plan. 28---Suppose that the exchange rate is 1.2 dollars per euro. If the euro depreciates 7% against the dollar, how many dollars would a euro buy tomorrow? Select one: a. $1.284 b. $1.311 c. $1.032 d. $1.116 If 1 dollar=80 yens and 1 euro=1.3 dollars, how many yens can one euro buy? Select one: a. 120 yens b. 104 yens c. 61.54 yens d. .0163 yens 29---If 1 dollar = 80 yens and 1 euro=1.3 dollars, how many yens can one euro buy? Select one: a. 120 yens b. 104 yens c. . 61.54 yens d. .0163 yens