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sealed coat pockets or bags away from where you are siln 1. Scott le is issuing bond Scott plans to sell si 000 face amount bonds paying (stated or coupon) 8% interest annually while the market demands 12% The bonds will come due in 10 years. a. How much will each bond sell for if the interest is paid once annually b. How much will each bond sell for if the interest is paid semi-annually (twice a year)? 2. Nina, Inc, has the following free cash flows: Year $150,000 160,000 175,000 After year 3. Cash flow is expected to grow at 8% annually while the investors require a 12% return. How much is Nina Ine. Business valuation? Dima Inc.'s most recent balance sheet is as follows: Cash Receivables 11,000 Inventory Fixed assets 15.000 Totals 3. $ 4,000 22,000 4,000 $10,000 Sales Cost of Goods Operating expenses Interest expense Income Taxes 3,000 1,200 800 S 5,000 Current liabilities Long term liabilities 200 Common stock S 40,000 Totals 300 There are 4,000 authorized and 2,.000 outstanding. Nina's P/E ratio is 10. Calculate. a. Book value per share b. Earnings per share c. Market price per share. You are ten years from retirement. You want to take exotic vacations for twelve years after you each cost $10,000. Realizing you will be on a fixed income, vacation funds. You approach your investment advisor at Quack Finance Services. They offer to sell you an annuity investment for which you will make 10 annual payments to fund the annuity. The in 4. retire. The vacations will you want to purchase an annuity to guarantee the needed annual vested amount will earn an 8% return for the 10 years. Once you reach retirement, they will pay out the $10,000 for twelve years. The money not yet disbursed will earn a 5% return. How much are your 10 annual payments into the fund until retirement. Tony Manero Men's Suits manufactures and seils men's suits. Their trademark bright yellow leisure suit is seen in Disco Halls throughout the world. Each suit sells for $600 and has variable costs of $100 per suit. Monthly fixed costs are S100,000 5. a. b. c How many suits does Tony have to sell each month to breakeven? What is Tomy's operating leverage on the sale of 800 suits? Tony is considering purchasing a automated sewing machine that will lower his variable costs by 25% but has a monthly increase in fixed costs by S10,000 per year d. With the new sewing machine, how many suits does Tony have to manufacture and sell to break even? 6. Bubba, Sissy, and Fido are siblings and each has a company three companies competing in the same market. Each company has earnings before interest and taxes of $100,000. Each company has total assets of $1,000,000. Bubba has financed his company 90% debt and 10% equity: Sissy uses 50% debt and 50% equity, while Fido uses all equity to finance their assets. Interest is 5% on all debt and the tax rate is 20%. The equity portion of their comp any s funded with S 1000 shares of common stock a. List the companies from I to 3 in their degree of financial leverage b. Calculate the degree of financial leverage c. Calculate EPS for each company