Topic Corporate Finance. Please Answer Multiple Choice Question

Answer for Topic Corporate Finance. Please answer Multiple Choice Question in $1 Only (Instant Download)

Corporate Finance

Topic Corporate Finance. Please answer multiple choice question:

Which of the following statements is True?
a) The debt overhang problem is part of the pecking order theory.
b) The debt overhang problem can be alleviated by issuing longer term debt.
c) The debt overhang problem can be alleviated by issuing shorter term debt.
d) The debt overhand problem can be alleviated if debt holders refuse to accept a loss
on the debt they hold.

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A Company Wants to Pay $30,000 to its Shareholders

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Shareholders

A company wants to pay $30,000 to its shareholders. It can do this either by a special dividend or a share repurchase. The current stock price is $46 a share and current earnings are $2.75 a share. There are 2700 shares outstanding. Assume that there are no taxes.

            a.    If the company pays the special dividend, what will be the new stock price?

            b,   What will be the price-earnings ratio after the dividend?

            c.    If the company does the repurchase, how many shares will it buy?

            d.   If the company repurchases shares, what will be the new stock price?

            e.    Which way will the stockholder be better off and why?

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Suppose that Amazon Bank Has $964m as Daily Average Total in Net

Answer of Suppose that Amazon Bank Has $964m as Daily Average Total in Net for 41 Only (Instant Download)

Amazon Bank

Suppose that Amazon bank has $964m as daily average total in net transaction accounts over 14 days of computation period on which reserve requirement applies. His daily average vault cash has been $46m over the computation period. In addition, the reserve carry-forward (from prior period) is $2.47m million. Using above information what will be gross reserve requirement?

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Canterbury Berhad (CTB) Has Assets Worth RM 10 Million Which is Financed

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Canterbury Berhad

Canterbury Berhad (CTB) has assets worth RM 10 million which is financed by 70% equity and 30% debt. The net income is RM4.5 million. CTB has set a 30% dividend payout to its shareholders. Net income and dividend are expected to remain constant or no growth (g=0%). CTB has 500,000 outstanding stocks. Current cost of equity is 14% while before tax cost of debt is 12%. CTB is considering to recapitalize by issuing a bond worth RM2 million at a cost of 13% before tax. CTB will use this bond’s proceed to repurchase some of its stocks from the market. CTB CTB’s corporate tax rate is 28%. CTB also forecasts that the cost of equity will rise to 17% should the proposed recapitazation is accepted. ( Note: NI=(EBIT-I)(1-T)) where NI is net income, EBIT is earnings before taxes and interest, I is interest and T is taxes.

Manitowoc Crane (U.S.) Exports Heavy Crane Equipment

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Manitowoc

Manitowoc Crane (8). Manitowoc Crane (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 10,000 units per year at the yuan equivalent of $22,000 each. The Chinese yuan (renminbi) has been trading at Yuan 7.60/$, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan 8.30/$, after which it will remain unchanged for at least a decade. Accepting this forecast as given, Manitowoc Crane faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume Direct costs are 75% of the U.S. sales price. Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 10% per annum through year eight. Dollar costs will not change. At the end of years, Manitowoc’s patent expires and it will no longer export to China. After the yuan is devalued to Yuan 8.30/5, no further devaluations are expected. If Manitowoc Crane raises the yuan price so as to maintain its dollar price, volume will increase at only 2% per annum through year eight, starting from the lower initial base of 9,000 units. Again, dolar costs will not change, and at the end of eight years Manitowoc Crane will stop exporting to China. Manitowoc’s weighted average cost of capital is 13%. Given these considerations, what should be Manitowoc’s pricing policy?

A $25 000, 10% Bond Redeemable at Par on December

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Bond

A $25 000, 10% bond redeemable at par on December 1, 2025, is purchased on September 25, 2014, to yield 7.6% compounded semi-annually. Bond interest is payable semi-annually.

Q1) What is the Market Price?

Q2) What is the Accrued Interest?

Round your answer to 2 decimal places.

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Burnett Corp. Pays a Constant $27 Dividend on its Stock

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Dividend

Burnett Corp. pays a constant $27 dividend on its stock. The company will maintain this dividend for the next 15 years and will then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share price? Multiple Choice:

$405.00

$193.09

$180.22

$183.89

$205.96

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Answer for Previous Page Next Page Page 15 of 19 Question 15

Answer for Previous Page Next Page Page 15 of 19 Question 15 (Mandatory) in $1 Only (Instant Download)

Rental

Previous Page Next Page Page 15 of 19 Question 15 (Mandatory) (20 points) You have found a vacation home at the Rim Golf Club in Payson for sale. You think it would make an excellent investment opportunity as a short-term rental property for people from Phoenix looking to get out of the summer heat. The home is $450,000 and you would finance it with an 80% loan-to-value loan. Your mortgage lender has told you that you can borrow for 30 years at 4.25%, but you would have to pay 2 points to get that loan. Based on these terms, what is the effective interest cost?

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