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Answer for a Question on Drewery Pty Ltd

August 26, 2019

Answer for a Question on Drewery Pty Ltd for $2 Only (Instant Download)

Drewery Pty Ltd has fixed costs of $50000 and operating profit of $17000. If sales increase by 18%, by how much will operating profit increase? What would happen to operating profit if sales decreased by 20%?

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Filed under Business, Corporate Finance, Finance, Finance Tagged with Drewery, Fixed Cost, operating profit

Potomac Company’s Bonds

August 21, 2019

Potomac Company’s Bonds for $1 Only

Potomac Company bonds: The Potomac Company’s bonds have a face value of $1,000, will mature in 20 years, and carry a coupon rate of 16 percent. Assume interest payments are made semiannually. Determine the present value of the bond’s cash flows if the required rate of return is 15 percent.

Find the real return on the following investments:

Stock Nominal Return Inflation

B 15% 8%

A 10% 3%

C -5% 2%

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Filed under Business, Corporate Finance, Finance, Finance Tagged with Bonds, Coupon rate, Potomac Company, Real Return

WACC for Sanlam and Santam

July 31, 2019

Answer of WACC for Sanlam and Santam in $3 Only (Instant Download)

Capital structure and dividend policy. 25 marks 1.1 The following information relates to two companies which trade in a Modigliani and Miller world:

Sanlam Santam

Cost of equity 20% 18% Cost of debt 12% – Dividends 200 000 432 000 Interest 150 000 – Shares 1000 1000

Required:

(a) Calculate the WACC for Sanlam and Santam. (4 marks) (b) Calculate the correct value for Sanlam shares assuming that Santam’s shares are correctly valued. (4 marks) (c) Explain what is meant by the term ‘arbitrage’ with reference to the M&M theory. (4 marks)

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Filed under Business, Corporate Finance, Finance Tagged with Sanlam and Santam, WACC

FIN 504 Topic 3 DQ 2

June 17, 2019

FIN 504 Topic 3 DQ 2 for $7 Only
Max Points: 5.0

Provide an example scenario with rationale of an area in your personal life in which you would like to apply, or have already applied, time value of money concepts. What might you do differently to effect a more financially sound future?

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Question on Capital Asset Pricing Model

May 20, 2019

Question on Capital Asset Pricing Model for $1 Only

The capital asset pricing model (CAPM) assumes which of the following?

I. A risk-free asset has no systematic risk.

II. Beta is a reliable estimate of total risk.

III. The reward-to-risk ratio is constant.

IV. The market rate of return can be approximated.

A) II, III, and IV only.

B) I and III only.

C) I, III, and IV only.

D) II and IV only.

E) I, II, III, and IV.

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Roslin Robotics Stock Questions All Versions

April 22, 2019

Roslin Robotics Stock Questions All Versions for $7 Only

Question: Roslin Robotics stock has a volatility of 24% and a current stock price of $61 per share. Roslin pays no dividends. The risk-free interest is 6%. Determine the Black-Scholes value of a one-year, at-the-money call option on Roslin stock.

The Black-Scholes value of a one-year, at-the-money call option on Roslin stock is: __

Similar Question 1
Roslin Robotics stock has a volatility of 36% and a current stock price of $51 per share. Roslin pays no dividends. The risk-free interest is 5%. Determine the Black-Scholes value of a one-year, at-the-money call option on Roslin stock.

The Black-Scholes value of a one-year, at-the-money call option on Roslin stock is: $ __

Similar Question 2
Roslin Robotics stock has a volatility of 25% and a current stock price of $70 per share. Roslin pays no dividends. The risk-free interest is 6%. Determine the Black-Scholes value of a one-year, at-the-money call option on Roslin stock. The Black-Scholes value of a one-year, at-the-money call option on Roslin stock is:

Similar Question 3

Roslin Robotics stock has a volatility of 32% and a current stock price of $72 per share. Roslin pays no dividends. The risk-free interest is 5%. Determine the Black-Scholes value of a one-year, at-the-money call option on Roslin stock.
The Black-Scholes value of a one-year, at-the-money call option on Roslin stock is: $ __

Similar Question 4

Roslin Robotics stock has a volatility of 30% and a current stock price of $64 per share. Roslin pays no dividends. The risk-free interest is 4%. Determine the Black-Scholes value of a one-year, at-the-money call option on Roslin stock.

The Black-Scholes value of a one-year, at-the-money call option on Roslin stock is $?

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Filed under Corporate Finance, Finance, Finance Tagged with Black-Scholes, Dividend, Roslin Robotics, Stock, Volatility

Diane Has Just Turned

April 3, 2019

Diane Has Just Turned for US$3 only (Instant Download)

Diane has just turned 18 and also completed high school and is wondering about the value of a college education. She is pretty good with numbers, and driven by financial considerations only, so she sits down to calculate whether it is worth the large sum of money. She knows that her first year tuition will be $12,000, due at the beginning of the year (that is, right away). Based on historical trends she estimates that tuition will rise at 6% per year for the 4 years she is in school. She also estimates that her living expense above and beyond tuition will be $8,000 per year (assume this occurs at the end of the year) for the first year and will increase $500 each year thereafter to keep up with inflation. She does not plan to work at all while attending school. Were she to forgo college she would be able to make $25,000 per year out of high school and expects that to grow 3% annually. With the college degree, she estimates that she will earn $45,000/year out of college, again with annual 3% increases in salary. Either way, she plans to work until turning 60 (she begins college right away). The interest/discount rate is 6%. What is the NPV of her college education (rounding to the nearest dollar)? Note: All cash flows except tuition payments occur at the end of the year.

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Filed under Business, Corporate Finance, Finance, Finance Tagged with cash flows, Diane, NPV

Financial Statement Comparison of PepsiCo and Coca-Cola

March 14, 2018

Financial Statement Comparison of PepsiCo and Coca-Cola in $21 Only (Instant Download)

Free Sample Answer Given Below

PepsiCo’s financial statements are presented in Appendix A. Financial statements of The Coca-Cola Company are presented in Appendix B.
This is from the appendixes in the 7th edition of financial accounting byWeygandt, kimmel, and kieso.

Instructions:

(a) Based on the information contained in these financial statements, determine each of the following for each company. Please show all numerical equations including numerator and denominator, not just a final number. Present your work in a comparative format using a table as illustrated:
1) Gross profit for 2008 PepsiCo Coca-Cola and Gross profit rate for 2008.

2) Percent change in operating income from 2007 to 2008.

3) Accounts receivable turnover for 2008.

4) Days sales in receivable for 2008.

5) Inventory turnover for 2008.

6) Days inventory on hand for 2008.

7) Increase (decrease) in cash and cash equivalents from 2007 to 2008.

8 ) Asset turnover ratio for 2008.

Teaching Net Present Value and Future Value

December 12, 2017

Teaching Net Present Value (NPV) & Future Value (FV) for $11 Only
You have been asked by a manager in your organization to put together a training program explaining Net Present Value (NPV) and Future Value (FV) and how they are used to evaluate the price of stock. You have been given the following objectives:

Upon completing your Net Present Value (NPV) and Future Value (FV) Training Program, employees should be able to do the following:

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Filed under Corporate Finance, Finance Tagged with Future Value, FV, Net Present Value, NPV

Finance Question Rate of Return Calculation

September 8, 2017

Finance Question Rate of Return Calculation in $0 Only (Instant Download)

Question 5-12

Rate of Return

Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average stock is 13 percent, and the risk-free rate of return is 7 percent. By how much does the required return on the riskier stock exceed the required return on the less risky stock.

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Filed under Corporate Finance, Finance, Financial Management Tagged with Beta, required return, Return, Stock R

Debt, CR and REs After Paying Dividends Calculation

September 30, 2015

Debt, CR and REs After Paying Dividends Calculation in $6.50 only

PSU Manufacturing Inc. has the following financial statements data for 2012.

Income Statement
Sales                      $102,500
Cost of Goods           $50,000
SG & E Expenses   $35,000
EBIT                         $17,000
Interest Expenses        $2,500
Taxes                         $6,000
Net Income                 $9,000

Balance Sheet
Cash                              $40,000
Fixes Assets                   $55,000
Total Assets                   $95,000
Accounts Payable           $12,000
Long-term Debt              $25,000
Retained Earnings           $28,000
Paid-in Common Equity   $30,000

Time Value of Money

June 1, 2015

Time Value of Money

Time Value of Money, Practical Applications in Business and Personal Decisions

If you have put money in a savings account, made monthly auto or mortgage payments, or paid down your student loan ahead of time you have inherently applied TVM.

Discuss how you may have used TVM in a recent investment or loan decision and explain some of the TVM details that may have been involved in your transaction.
If you have not used TVM in the past financial transactions explain potential TVM applications you would encounter in future business or personal transactions.

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Filed under Corporate Finance, Finance, Financial Accounting Tagged with Finance, Time value of money

ACC 423 Week 2 WileyPlus Assignment-Exercises

April 24, 2013

ACC 423 Week 2 WileyPlus Assignment-Exercises in $7 only

E15-13 (a,b) (Stock Split and Stock Dividend)
The common stock of Warner Inc. is currently selling at $110 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Five million shares are issued and outstanding.

(a) How much is the debit to retained earnings if the board votes a 2-for-1 stock split?
(b) Prepare the necessary journal entries if the board votes a 100% stock dividend.

P15-1 (Equity Transactions and Statement Preparation)
On January 5, 2010, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions.
Jan. 11 Issued 20,000 shares of common stock at $16 per share.
Feb. 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: machinery with a fair market value of $50,000; a factory building with a fair market value of $160,000; and land with an appraised value of $270,000.
July 29 Purchased 1,800 shares of common stock at $17 per share. (Use cost method.)
Aug. 10 Sold the 1,800 treasury shares at $14 per share.
Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend.
Dec. 31 Closed the Income Summary account. There was a $175,700 net income.

Case Problem 9.2: Deb Takes Measure of the Market

August 29, 2012

Assignment case problem 9.2 of Gitman/Joehnk (2010), 11th editions: Deb Takes Measure of the Market

Several months ago, Deb Forrester received a substantial sum of money from the estate of her late aunt. Deb initially placed the money in a savings account because she was not sure what to do with it. Since then, however, she has taken a course in investments at the local university. Excited about what she has learned in class, Deb has decided that she definitely wants to invest in stocks. But before she does, she wants to use her newfound knowledge in technical analysis to determine whether now would be a good time to enter the market.

Deb has decided to use all 5 of the following measures to help her determine if now is a good time to start putting money into the stock market:

• Dow Theory

• Advance-decline line

• New highs-new lows (NH-NL) indicator (Assume the current 10-day moving average is zero and the last 10 periods were each zero.)

• Arms index

• Mutual fund cash ratio

FIN 571 Week 5 Individual Assignment Text Problem Sets

July 7, 2012

FIN571 Week 5 Individual Assignment Text Problem Sets

A1. (Bond valuation) A $1,000 face value bond has a remaining maturity of 10 years and a required return of 9%. The bond’s coupon rate is 7.4%. What is the fair value of this bond?

A10. (Dividend discount model) Assume RHM is expected to pay a total cash dividend of $5.60 next year and its dividends are expected to grow at a rate of 6% per year forever. Assuming annual dividend payments, what is the current market value of a share of RHM stock if the required return on RHM common stock is 10%?

A12. (Required return for a preferred stock) James River $3.38 preferred is selling for $45.25. The preferred dividend is nongrowing. What is the required return on James River preferred stock?

A14. (Stock valuation) Suppose Toyota has nonmaturing (perpetual) preferred stock outstanding that pays a $1.00 quarterly dividend and has a required return of 12% APR (3% per quarter). What is the stock worth?

B16. (Interest-rate risk) Philadelphia Electric has many bonds trading on the New York Stock Exchange. Suppose PhilEl’s bonds have identical coupon rates of 9.125% but that one issue matures in 1 year one in 7 years, and the third in 15 years. Assume that a coupon payment was made yesterday.

a. If the yield to maturity for all three bonds is 8%, what is the fair price of each bond?

WACC Calculation for Filer Manufacturing

February 9, 2012

Filer manufacturing has 7.5 millions shares of common stock outstanding. The current share price is $49, and the book value per share is $4. Filer also has 2 bond issues outstanding the first bond issue has a face value of $60 millions and a 7% coupon and sells for 93% of par. The second issue has a face value of $50 million and a 6.5% coupon and sells for 96.5 percent of par. The first issue matures in 10 years, the second in 6 years. Suppose the company’s stock has a beta of 1.2. The risk free rate is 5.2%, and the market risk premium is 7%. Assume that the overall cost of debt is the weighted average implied by the 2 outstanding debt issues. Both bonds make semiannual payments. The tax rate is 35%. What is the company’s WACC?

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Clark Paints: Calculate Annual cash flows, Payback Period NPV & IRR

January 6, 2012

Clark Paints: Calculate Annual cash flows, Payback Period NPV & IRR

Clark Paints: The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchasing them. The equipment needed would cost $200,000, with a disposal value of $40,000, and it would be able to produce 5,500,000 cans over the life of the machinery. The production department estimates that approximately 1,100,000 cans would be needed for each of the next five years.

The company would hire three new employees. These three individuals would be full-time employees working 2,000 hours per year and earning $12.00 per hour. They would also receive the same benefits as other production employees, 18% of wages, in addition to $2,500 of health benefits.

It is estimated that the raw materials will cost 25¢ per can and that other variable costs would be 5¢ per can. Since there is currently unused space in the factory, no additional fixed costs would be incurred if this proposal is accepted.

Cost of Capital Mini Case: Cascade Water Company

November 29, 2011

Source Book : Corporate Finance: Linking Theory to What Companies Do By John Graham, Scott B. Smart, William L. Megginson

Chapter 9: Cost of Capital and Project Risk

Mini Case

Cascade Water Company (CWC) currently has 30,000,000 shares of common stock out- standing that trade at a price of $42 per share. CWC also has 500,000 bonds outstanding that currently trade at $923.38 each. CWC has no preferred stock outstanding and has an equity beta of 2.639. The risk-free rate is 3.5%, and the market is expected to return 12.52%. The firm’s bonds have a 20-year life, a $1,000 par value, a 10% coupon rate and pay interest semi-annually.

CWC is considering adding to its product mix a “healthy” bottled water geared toward children. The initial outlay for the project is expected to be $3,000,000, which will be depreciated using the straight-line method to a zero salvage value, and sales are expected to be 1,250,000 units per year at a price of $1.25 per unit. Variable costs are estimated to be $0.24 per unit, and fixed costs of the project are estimated at $200,000 per year. The project is expected to have a 3-year life and a terminal value (excluding the operating cash flows in year 3) of $500,000. CWC has a 34% marginal tax rate. For the purposes of this project, working capital effects will be ignored. Bottled water targeted at children is expected to have different risk characteristics from the firm’s current products. Therefore, CWC has decided to use the “pure play” approach to evaluate this project. After researching the market, CWC managed to find two pure-play firms. The specifics for those two firms are:

Solve My Question: Home Work and Assignment Help for All Subjects

Answer for a Question on Drewery Pty Ltd

Potomac Company’s Bonds

WACC for Sanlam and Santam

FIN 504 Topic 3 DQ 2

Question on Capital Asset Pricing Model

Roslin Robotics Stock Questions All Versions

Diane Has Just Turned

Financial Statement Comparison of PepsiCo and Coca-Cola

Teaching Net Present Value and Future Value

Finance Question Rate of Return Calculation

Debt, CR and REs After Paying Dividends Calculation

Time Value of Money

ACC 423 Week 2 WileyPlus Assignment-Exercises

Case Problem 9.2: Deb Takes Measure of the Market

FIN 571 Week 5 Individual Assignment Text Problem Sets

WACC Calculation for Filer Manufacturing

Clark Paints: Calculate Annual cash flows, Payback Period NPV & IRR

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