Premium Essay

Submitted By caliman1234

Words 2341

Pages 10

Words 2341

Pages 10

Department of Finance

Fin331

Dr. M. Rhee

2010 Spring

NAME: | | ID#: | |

1. If APR = 10%, what is the EAR (effective annual rate) for quarterly compounding? a. 10.00% b. 10.38% c. 12.36% d. 13.36% e. 15.52% Answer: b APR = Nominal rate 10.00% Periods/yr 4 EFF% =(1+(rNOM/N))N − 1 = 10.38% 2. If the current one year CD rate is 3% and the best estimate of one year CD which will be available one year from today is 5%, what is the current two year CD rate with 1% liquidity premium?

a. 4.0% b. 4.5% c. 5.0% d. 5.5% e. 6.0%

Answer: C

(1 + 0R2 – 0.01)2 = (1.03)1 × (1.05)1

0R2 = {(1.03) × (1.05)}1/2 + 0.01 – 1 = 4.9952% ≈ 5.00%

3. Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? a. The present value of a 5-year, $250 annuity due will be lower than the PV of a similar ordinary annuity.

b. A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage.

c. A bank loan's nominal interest rate will always be equal to or greater than its effective annual rate.

d. If an investment pays 10% interest, compounded quarterly, its effective annual rate will be greater than 10%.

e. Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterly and B pays semiannually. Deposits in Bank B will provide the higher future value if you leave your funds on deposit.

Answer: d

4. You have a chance to buy an annuity that pays $550 at the beginning of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? a. $1,412.84 b. $1,487.20 c. $1,565.48 d.…...

Premium Essay

...FIN 515 Week 5 Homework 10-8 Truck: (=NVP: 14%, 5100, 5100, 5100, 5100, 5100) = $17,508.71 - $17,100 = $408.71 (=IRR: -17100, 5100, 5100, 5100, 5100, 5100) = 14.99% (=MIRR: -17100, 5100, 5100, 5100, 5100, 5100, 14%, 14%) = 14.54% → Accept the decision. Pulley System: (=NPV: 14%, 7500, 7500, 7500, 7500, 7500) = $25,748.11 – $22,430 = $3,318.11 (=IRR: -22430, 7500, 7500, 7500, 7500, 7500) = 19.99% → 20% (=MIRR: -22430, 7500, 7500, 7500, 7500, 7500, 14%, 14%) = 17.19% → Accept the decision. 10-9 Electric Truck: (=NPV: 12%, 6290, 6290, 6290, 6290, 6290, 6290) = $25,860 - $22,000 = $3,860 (=IRR: -22000, 6290, 6290, 6290, 6290, 6290, 6290) = 17.99% → 18% Gas Truck: (=NPV: 12%, 5000, 5000, 5000, 5000, 5000, 5000) = $20,557 - $17,500 = $3,057 (IRR= -17500, 5000, 5000, 5000, 5000, 5000, 5000) = 17.97% → 18% → Choose the electric truck, since it has the higher NPV & the IRR for both trucks are the same. 11-2 Operating Cash Flow = NOPAT + Depreciation → NOPAT = EBIT (1-Tax Rate) NOPAT: $10,000,000 [Projected Sales] - $7,000,000 [Operating Costs] - $2,000,000 [Interest Expense] $1,000,000 (1-0.40) → $1,000,000 (0.60) = $600,000 Operating Cash Flow = NOPAT + Depreciation $600,000 [NOPAT] + $2,000,000 [Depreciation] $2,600,000 [Operating Cash Flow] 11-3 $20,000,000 with a depreciation of 80% = $4,000,000 Value $5,000,000 [Gross Sale] - $4,000,000 [Value] $1,000,000 [Profit] 40% Tax on $1,000,000......

Words: 274 - Pages: 2

Premium Essay

...Fin 221 Fall 2006 Exam 2 Multiple Choice Identify the choice that best completes the statement or answers the question. 1) Marcus Nurseries Inc.'s 2005 balance sheet showed total common equity of $2,050,000, which included $1,750,000 of retained earnings. The company had 100,000 shares of stock outstanding which sold at a price of $57.25 per share. If the firm had net income of $250,000 in 2006 and paid out $100,000 as dividends, what would its book value per share be at the end of 2006, assuming that it neither issued nor retired any common stock? A.|$19.00| B.|$20.00| C.|$21.00| D.|$22.00| E.|$23.00| 2) Lennox Furniture Company's 2005 balance sheet showed total current assets of $1,500,000. All of the current assets were required in operations, and its current liabilities consisted of $300,000 of accounts payable, $200,000 of 6% short-term notes payable to the bank, and $100,000 of accrued wages and taxes. What was the net operating working capital that was financed by investors at the end of 2005? A.|$1,100,000| B.|$1,200,000| C.|$1,300,000| D.|$1,400,000| E.|$1,500,000| 3) Johnson Battery Systems Metals recently reported $9,000 of sales, $6,000 of operating costs other than depreciation, and $1,500 of depreciation. The company had no amortization charges, it had $4,000 of bonds that carry a 7% interest rate, and its federal-plus-state income tax rate was 40%. In order to sustain its operations and thus generate sales and cash flows in the......

Words: 2475 - Pages: 10

Premium Essay

...Chapter 18 Capital Budgeting and Valuation with Leverage 18-4. Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $1.5 million per year, growing at a rate of 2.5% per year. Goodyear has an equity cost of capital of 8.5%, a debt cost of capital of 7%, a marginal corporate tax rate of 35%, and a debt-equity ratio of 2.6. If the plant has average risk and Goodyear plans to maintain a constant debt-equity ratio, what after-tax amount must it receive for the plant for the divestiture to be profitable? We can compute the levered value of the plant using the WACC method. Goodyear’s WACC is [pic] Therefore, [pic] A divestiture would be profitable if Goodyear received more than $47.6 million after tax. 18-5. Suppose Alcatel-Lucent has an equity cost of capital of 10%, market capitalization of $10.8 billion, and an enterprise value of $14.4 billion. Suppose Alcatel-Lucent’s debt cost of capital is 6.1% and its marginal tax rate is 35%. a. What is Alcatel-Lucent’s WACC? b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the following expected free cash flows? [pic] c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part b? a. [pic] b. Using the WACC method, the levered value of the......

Words: 881 - Pages: 4

Premium Essay

...Week 5 - Project Jonathan Chapman jwchapman12@gmail.com October 2, 2014 Managerial Finance FIN-515-10284 DeVry University Keller Graduate School of Management Professor Hartzog Week 5 – Project 8-23 - Bauer Industries is an automobile manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental free cash flow projections (in millions of dollars): | Year 0 | Years 1-9 | Year 10 | Revenues | | 100.0 | 100.0 | -Manufacturing expenses(other than depreciation) | | -35.0 | -35.0 | -Marketing expenses | | -10.0 | -10.0 | -Depreciation | | -15.0 | -15.0 | =EBIT | | 40.0 | 40.0 | -Taxes (35%) | | -14.0 | -14.0 | =Unlevered net income | | 26.0 | 26.0 | +Depreciation | | +15.0 | +15.0 | -Increases in net worth capital | | -5.0 | -5.0 | -Capital expenditures | -150.0 | | | +Continuation value | | | +12.0 | =Free cash flow | -150.0 | 36.0 | 48.0 | a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight trucks? NPV=150 + 36 x 1/0.12[1-1/1.12^9] + 48/1.12^10 = $57.3 million b. Based on input from the marketing department, Bauer is uncertain about its revenue forecast. In particular, management would like to examine the sensitivity of the NPV to the revenue assumptions.......

Words: 494 - Pages: 2

Premium Essay

...Devry FIN 515 (Managerial Finance Course Work) Complete Course Week 1-7 and Final - A+ Highly Rated Work IF You Want To Purcahse A+ Work then Click The Link Below For Instant Down Load http://hwnerd.com/FIN-515-Managerial-Finance-Course-Work-Complete-Course-1119.htm?categoryId=-1 IF You Face Any Problem Then E Mail Us At Contact.Hwnerd@Gmail.Com FIN 515 Managerial Finance Week 1 FIN 515 Week 1 Homework; Problems and Mini Case Week 2 FIN 515 Week 2 Homework Assignment; Problems Prob 3-1 - Prob 3-2 – Prob3-3 –Prob 3-4 – Prob 3.5 – Prob 3.5 – ROE – Prob 3-6 – Prob 3-7 Equity Multiplier Prob 4-1 –Prob 4-2 –Prob 4-6 Prob 4-13a –Prob 4-14 Week 3 FI515 Week 3 Homework Assignment; Problems Prob 5-1 – Prob 5-2 – Prob 5-6 – Prob 5-7 – Prob 5-13 – Prob 6-6 – Prob 6-1 – Prob 6-2 – Prob 6-7 Week 4 Fin 515 Week 4 Weekly Problems and Midterm Exam Prob 7-2 – Prob 7-4 – Prob 7-5 –Prob 9-2 –Prob 9-4 – Prob 9-4 – Prob 9-5 – Prob 9-6 – Prob 9-7 FIN 515 Week 4 : Business Valuation and Stock Valuation - Exam 1. (TCO A) Which of the following statements is CORRECT? (Points : 10) 2. (TCO G) Which of the following statements is CORRECT? (Points : 10) 3. (TCO G) LeCompte Corp. has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its net income after taxes was $24,655. Stockholders recently voted in a new management team that has promised to...

Words: 1751 - Pages: 8

Premium Essay

...Devry FIN 515 (Managerial Finance Course Work) Entire Course Week 1-7 and Final - IF You Want To Purcahse A+ Work then Click The Link Below For Instant Down Load http://acehomework.com/Devry-FIN-515-Managerial-Finance-Course-Work-Week-1-7-and-Final-332323232323.htm IF You Face Any Problem Then E Mail Us At JOHNMATE1122@GMAIL.COM FIN 515 Managerial Finance Week 1 FIN 515 Week 1 Homework; Problems and Mini Case Week 2 FIN 515 Week 2 Homework Assignment; Problems Prob 3-1 - Prob 3-2 – Prob3-3 –Prob 3-4 – Prob 3.5 – Prob 3.5 – ROE – Prob 3-6 – Prob 3-7 Equity Multiplier Prob 4-1 –Prob 4-2 –Prob 4-6 Prob 4-13a –Prob 4-14 Week 3 FI515 Week 3 Homework Assignment; Problems Prob 5-1 – Prob 5-2 – Prob 5-6 – Prob 5-7 – Prob 5-13 – Prob 6-6 – Prob 6-1 – Prob 6-2 – Prob 6-7 Week 4 Fin 515 Week 4 Weekly Problems and Midterm Exam Prob 7-2 – Prob 7-4 – Prob 7-5 –Prob 9-2 –Prob 9-4 – Prob 9-4 – Prob 9-5 – Prob 9-6 – Prob 9-7 FIN 515 Week 4 : Business Valuation and Stock Valuation - Exam 1. (TCO A) Which of the following statements is CORRECT? (Points : 10) 2. (TCO G) Which of the following statements is CORRECT? (Points : 10) 3. (TCO G) LeCompte Corp. has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its net income after taxes was $24,655. Stockholders recently voted in a new management team that has promised to lower costs and......

Words: 1748 - Pages: 7

Premium Essay

...Devry FIN 515 (Managerial Finance Course Work) Complete Course Week 1-7 and Final - A+ Highly Rated Work IF You Want To Purcahse A+ Work then Click The Link Below For Instant Down Load http://hwnerd.com/FIN-515-Managerial-Finance-Course-Work-Complete-Course-1119.htm?categoryId=-1 IF You Face Any Problem Then E Mail Us At Contact.Hwnerd@Gmail.Com FIN 515 Managerial Finance Week 1 FIN 515 Week 1 Homework; Problems and Mini Case Week 2 FIN 515 Week 2 Homework Assignment; Problems Prob 3-1 - Prob 3-2 – Prob3-3 –Prob 3-4 – Prob 3.5 – Prob 3.5 – ROE – Prob 3-6 – Prob 3-7 Equity Multiplier Prob 4-1 –Prob 4-2 –Prob 4-6 Prob 4-13a –Prob 4-14 Week 3 FI515 Week 3 Homework Assignment; Problems Prob 5-1 – Prob 5-2 – Prob 5-6 – Prob 5-7 – Prob 5-13 – Prob 6-6 – Prob 6-1 – Prob 6-2 – Prob 6-7 Week 4 Fin 515 Week 4 Weekly Problems and Midterm Exam Prob 7-2 – Prob 7-4 – Prob 7-5 –Prob 9-2 –Prob 9-4 – Prob 9-4 – Prob 9-5 – Prob 9-6 – Prob 9-7 FIN 515 Week 4 : Business Valuation and Stock Valuation - Exam 1. (TCO A) Which of the following statements is CORRECT? (Points : 10) 2. (TCO G) Which of the following statements is CORRECT? (Points : 10) 3. (TCO G) LeCompte Corp. has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its net income after taxes was $24,655. Stockholders recently voted in a new management team that has promised to...

Words: 1751 - Pages: 8

Premium Essay

...Devry FIN 515 (Managerial Finance Course Work) Entire Course Week 1-7 and Final - IF You Want To Purcahse A+ Work then Click The Link Below For Instant Down Load http://acehomework.com/Devry-FIN-515-Managerial-Finance-Course-Work-Week-1-7-and-Final-332323232323.htm IF You Face Any Problem Then E Mail Us At JOHNMATE1122@GMAIL.COM FIN 515 Managerial Finance Week 1 FIN 515 Week 1 Homework; Problems and Mini Case Week 2 FIN 515 Week 2 Homework Assignment; Problems Prob 3-1 - Prob 3-2 – Prob3-3 –Prob 3-4 – Prob 3.5 – Prob 3.5 – ROE – Prob 3-6 – Prob 3-7 Equity Multiplier Prob 4-1 –Prob 4-2 –Prob 4-6 Prob 4-13a –Prob 4-14 Week 3 FI515 Week 3 Homework Assignment; Problems Prob 5-1 – Prob 5-2 – Prob 5-6 – Prob 5-7 – Prob 5-13 – Prob 6-6 – Prob 6-1 – Prob 6-2 – Prob 6-7 Week 4 Fin 515 Week 4 Weekly Problems and Midterm Exam Prob 7-2 – Prob 7-4 – Prob 7-5 –Prob 9-2 –Prob 9-4 – Prob 9-4 – Prob 9-5 – Prob 9-6 – Prob 9-7 FIN 515 Week 4 : Business Valuation and Stock Valuation - Exam 1. (TCO A) Which of the following statements is CORRECT? (Points : 10) 2. (TCO G) Which of the following statements is CORRECT? (Points : 10) 3. (TCO G) LeCompte Corp. has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its net income after taxes was $24,655. Stockholders recently voted in a new management team that has promised to lower costs and......

Words: 1748 - Pages: 7

Premium Essay

...Devry FIN 515 (Managerial Finance Course Work) Entire Course Week 1-7 and Final IF You Want To Purcahse A+ Work then Click The Link Below For Instant Down Load http://acehomework.com/Devry-FIN-515-Managerial-Finance-Course-Work-Week-1-7-and-Final-332323232323.htm IF You Face Any Problem Then E Mail Us At JOHNMATE1122@GMAIL.COM FIN 515 Managerial Finance Week 1 FIN 515 Week 1 Homework; Problems and Mini Case Week 2 FIN 515 Week 2 Homework Assignment; Problems Prob 3-1 - Prob 3-2 – Prob3-3 –Prob 3-4 – Prob 3.5 – Prob 3.5 – ROE – Prob 3-6 – Prob 3-7 Equity Multiplier Prob 4-1 –Prob 4-2 –Prob 4-6 Prob 4-13a –Prob 4-14 Week 3 FI515 Week 3 Homework Assignment; Problems Prob 5-1 – Prob 5-2 – Prob 5-6 – Prob 5-7 – Prob 5-13 – Prob 6-6 – Prob 6-1 – Prob 6-2 – Prob 6-7 Week 4 Fin 515 Week 4 Weekly Problems and Midterm Exam Prob 7-2 – Prob 7-4 – Prob 7-5 –Prob 9-2 –Prob 9-4 – Prob 9-4 – Prob 9-5 – Prob 9-6 – Prob 9-7 FIN 515 Week 4 : Business Valuation and Stock Valuation - Exam 1. (TCO A) Which of the following statements is CORRECT? (Points : 10) 2. (TCO G) Which of the following statements is CORRECT? (Points : 10) 3. (TCO G) LeCompte Corp. has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its net income after taxes was $24,655. Stockholders recently voted in a new management team that has promised to lower costs and get......

Words: 1748 - Pages: 7

Premium Essay

... [pic] DeVry FIN 515 Group Project Company analysis as of 12/31/2013 and 12/31/2012 in USD 2012 2013 Profitability Ratios: Gross Margin 48.74 39.12 Operating Margin 11.37 10.21 EBITDA Margin % 13.39 12.21 Calculated Tax Rate % 37.80 30.21 Profit Margin (TTM) 6.96 5.67 Valuation Ratios: Price/Earnings (TTM) 113.38 115.21 Price/Book (TTM) 17.54 18.19 Price/Cash Flow (TTM) 153.19 158.30 Asset Management: Total Asset Turnover 1.71 2.24 Receivables Turnover 12.10 13.21 Inventory Turnover 3.03 4.03 Property Plant & Equip Turnover 11.52 12.71 Cash & Equivalents Turnover 6.77 8.12 Debt Management: Interest Coverage 90.38 90.40 Long Term Debt/Equity 0.05 0.06 Long Term Debt as % of Invested Capital 3.98 3.99 Total Debt/Equity 0.15 0.16 Accounts Payable Turnover 15.09 15.10 Accrued Expenses Turnover 21.32 21.34 Liquidity Indicators: Quick Ratio 1.29 1.34 Current Ratio 2.65 2.70 Net Current Assets as % of Total Assets 44.51 44.55 Free Cash Flow per Share 0.15 0.17 Revenue to Assets 1.48 1.50 Under Armour Inc. Introduction Under Armour, Inc. is an American sports clothing and accessories company. The company is a supplier of the sportswear and casual apparel. Under Armour began to offer footwear in 2006. Under......

Words: 1437 - Pages: 6

Premium Essay

...DeVry FIN 515 Week 8 Final Exam - Latest IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download http://www.hwspeed.com/DeVry-FIN-515-Week-8-Final-Exam-Latest-23132.htm?categoryId=-1 If You Face Any Problem E- Mail Us At JOHNMATE1122@Gmail.Com Final Exam Page 1 1. (TCO A) Which of the following does NOT always increase a company's market value? (Points : 5) 2. (TCO F) Which of the following statements is correct? (Points : 5) 3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock? (Points : 20) 4. (TCO G) Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March? (Points : 20) Final Exam Page 2 1. (TCO H) Zervos Inc. had the following data for 2008 (in millions). The new CFO believes (a) that an improved......

Words: 726 - Pages: 3

Premium Essay

...FIN 515 Entire Course Managerial Finance http://hwguiders.com/downloads/fin-515-entire-course-managerial-finance FIN 515 Entire Course Managerial Finance FIN 515 Week 1 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_1_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 1 (page 19) 1. What is the most important difference between a corporation and all other organizational forms? 2. What does the phrase limited liability mean in a corporate context? 3. Which organizational forms give their owners limited liability? 4. What are the main advantages and disadvantages of organizing a firm as a corporation? 5. Explain the difference between an S corporation and a C corporation. Chapter 2 The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text and all questions on pages 56–57. 29. In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million. a. Compare the gross margins for Starbucks and Peet’s. b. Compare the net profit margins for Starbucks and Peet’s. c. Which firm was more profitable in 2011? ...

Words: 5533 - Pages: 23

Free Essay

...FIN 515 UOP, FIN 515 Phoenix, FIN 515 UOPhelp, FIN 515 Week 3, FIN 515 Individual Assignment , FIN 515 Learning team Assignment, FIN 515 Product, FIN 515 A Graded , FIN 515 Summary, FIN 515 Study Guide, FIN 515 Questions , FIN 515 Answered , FIN 515 Solution, FIN 515 Final Guide, FIN 515 Final Exam, FIN 515 A++ Work, FIN 515 A Graded, FIN 515 Homework, FIN 515 help, FIN 515 week 1 DQ, FIN 515 week 2 DQ, FIN 515 week 3DQ, FIN 515 week 4 DQ, FIN 515 week 5DQ, FIN 515 week 6 DQ, FIN 515 week 1 Assignment, FIN 515 week 2 Assignment, FIN 515 week 3Assignment, FIN 515 week 4 Assignment, FIN 515 week 5 Assignment, FIN 515 All Individual and Learning Team Assignments, FIN 515 Full Course , FIN 515 Whole Class FIN 515 Entire Solution, FIN 515 University of Phoenix Learning Team Assignment, FIN 515 Checkpoint, FIN 515 All Weeks , FIN 515 Week 1-5, FIN 515 Axia College, FIN 515 online class, FIN 515 week 3DQ, FIN 515 week 4 DQ, FIN 515 week 5DQ, FIN 515 Syllabus, FIN 515 Version, FIN 515 Week 1, FIN 515 Week 2, FIN 515 Week 3, FIN 515 Week 4, FIN 515 Week 5, FIN 515 week 1 DQ, FIN 515 week 2 DQ,, FIN 515 week 2 Assignment, FIN 515 week 3Assignment, FIN 515 week 4 Assignment, FIN 515 Week 1-6, FIN 515 Assignment, FIN 515 DQs, FIN 515 Week, FIN 515 Complete Course, FIN 515 Entire Class, FIN 515 Whole Tutorial, FIN 515 Work, FIN 515 final Project, FIN 515 Material, FIN 515 tutorial, FIN 515 Complete......

Words: 408 - Pages: 2

Premium Essay

...DeVry FIN 515 Final EXAM-2015 IF You Want To Purchase A+ Work then Click The Link Below For Instant Down Load http://www.hwspeed.com/DeVry-FIN-515-Final-EXAM-2015-040404441450.htm?categoryId=-1 IF You Face Any Problem Then E Mail Us At JOHNMATE1122@GMAIL.COM Question 1. What are the names of the four components of the DuPont identity and how they are calculated and what do the measure 1. Pfizer has just paid a dividend and will pay a dividend of $3.25 in a year. The dividend will stay constant for the rest of the time. The return on equity for similar stocks is 9%. What is Po? 2. General mills has declared an annual dividend of $2.15 to be paid one year from today, The dividend is expected to grow at 3% annual rate. The return on equity for similar stock is 10% what is po? 3. Apple has a bond with six years to maturity, it has a face value of $1,000. It has a YTM of 6.5% and the coupons are paid semiannually at a 9% annual rate. What does the bond currently sell for? 4. A stericycle bond is selling for $1,050 even though it has a par of $1,000. It was issued two years ago and has a maturity rate of 10 years. The coupon rate is 6% and the interest payments are made semiannually. What is the YTM? 1. What is Beta and why is it important to investors and issuers of stock? Describe the behavior of stocks with beta greater than one, less that one and less than zero. 2. Tennant has 10 million shares outstanding trading for $7 per per share....

Words: 415 - Pages: 2

Premium Essay

...FIN 515 Managerial Finance Entire Course http://homeworklance.com/downloads/fin-515-managerial-finance-entire-course/ FIN 515 Week First Course Project FIN 515 Week Second Course Project FIN 515 Week 1 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_1_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 1 (page 19) 1. What is the most important difference between a corporation and all other organizational forms? 2. What does the phrase limited liability mean in a corporate context? 3. Which organizational forms give their owners limited liability? 4. What are the main advantages and disadvantages of organizing a firm as a corporation? 5. Explain the difference between an S corporation and a C corporation. Chapter 2 The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text and all questions on pages 56–57. 29. In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million. a. Compare the gross margins for Starbucks and Peet’s. b. Compare the net profit margins for Starbucks and Peet’s. c. Which firm was......

Words: 5617 - Pages: 23