## Objective Type Questions

a) A company sells a product which has a unit sales price of \$5, unit variable cost of \$3 and total fixed costs of \$120,000. The number of units the company must sell to break even is

1. 60,000 units.
2. 24,000 units.
3. 240,000 units.
4. 40,000 units.

b) A company has total fixed costs of \$120,000 and a contribution margin ratio of 20%. The total sales necessary to break even are

1. \$480,000.
2. \$600,000.
3. \$150,000.
4. \$144,000.

c) At the break-even point of 2,500 units, variable costs are \$55,000, and fixed costs are \$32,000. How much is the selling price per unit?

1. \$34.80
2. \$9.20
3. \$12.80
4. \$22.00

## Regression, Beta, Standard Dev, Correlation and other Calculation for S&P500

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The assignment will be collected at the beginning of final exam. You should turn in the Excel
workbook for this assignment with your report.
1. Use http://finance.yahoo.com to obtain daily closing prices for your company. Use Excel to
calculate daily returns for the period January 1, 2010 – December 31, 2010. Calculate,
• Average daily return,
• Standard deviation of returns.
Repeat the analysis for the Dow Jones Industrial Average (DJIA). Ticker is ^DJI.
• Average daily return for your stock, yourstock R
• Standard deviation of daily returns, yourstock σ
• Average daily return for DJIA, DJIA R
• Standard deviation of daily returns on the DJIA, DJIA σ .

## Report on Ford Motors

Report on Ford Motors in \$14 only

1. Capstone CheckPoint

• Resource: http://www.annualreports.com/
• Follow the directions below to access the annual report for a company of your choice. It may be, but does not have to be, the company for your final project.
1. Go to http://www.annualreports.com/
2. Enter your company’s name in the Search by Company Name field.
3. Click Search.
5. Open the PDF or HTML version of the annual report.

Read the letter to shareholders from the CEO or chairman of the board.
• Evaluate the CEOÃ‚Â’s letter, in 200 to 300 words. An effective annual report letter from company leadership should include:
o An assessment of the firmÃ‚Â’s performance in the last year
o Both positive and negative developments
o Ideas for strategic planning for the future
• Answer the following question in your evaluation: What impressions does the letter give you about the quality of the company’s financial leadership and planning?

2. Final Project: Evaluating an Annual Report
• Resources: Appendix A
• Due Date: Day 7 [Individual forum]
• Review Appendix A for details to include in your analysis of your chosen company’s financial health.
• Prepare a 1,750- to 2,100-word paper, formatted according to APA guidelines, that includes performance ratios based on the company’s last two annual reports and data available on the company’s Web site.
o Compute the eight ratios listed below for two consecutive years. Discuss their significance for management and compare them to industry averages.
• Current Ratio
• Quick Ratio
• Inventory Turnover Ratio (Note: on the Dunn and Bradstreet Web site this ratio is labeled Sales to Inventory)
• Debt Ratio (Note: on the Dunn and Bradstreet Web site this ratio is labeled Total Liabilities to Net Worth)
• Net Profit Margin Ratio (Note: on the Dunn and Bradstreet Web site this ratio is labeled Return on Sales)
• ROI (Note: on the Dunn and Bradstreet Web site this ratio is labeled Return on Assets)
• ROE (Note: on the Dunn and Bradstreet Web site this ratio is labeled Return on Net)
• Price-to-Earnings Ratio (P/E) Ratio
o Analyze the company’s working capital management. Explain why the company’s operating and cash cycles are currently optimized. If you think they are not optimized, explain why.
o Based on the companyÃ‚Â’s financial statements, list the long-term debt held by the corporation, maturity dates and yield to maturity. List the types of stock issued by the company, the stocksÃ‚Â’ current selling price, and the 52-week average selling price.
o Compute the weighted average cost of capital (WACC) for both years and discuss your findings.
o Write a brief analysis that summarizes the data youÃ‚Â’ve gathered throughout the weeks and evaluates how your company compares to industry averages.
o Write your recommendations on whether as an investor you should buy this company’s stock and why.

Price of Answer: Just US\$ 14 onlyNeed Assistance…?? email us at [email protected].

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## General Motors 2006 & 2007 Long Term Debt

General Motors 2006 & 2007 Long Term Debt

Based on the company’s financial statements of 2006 and 2007, list the long-term debt held by the corporation, maturity dates and yield to maturity. List the types of stock issued by the company, the stocksÂ’ current selling price, and the 52-week average selling price.

Price of Answer: Just US\$ 2.50 onlyNeed Assistance…?? email us at [email protected].

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## Finance Questions I

Finance Questions I

1. If you invest \$2,000 a year in a retirement account, how much will you have in 40 years at 12%?
2. There is a stock that pays dividends of \$2.00 at the end of 1st yr, \$2.20 at the end of 2nd yr, and \$2.40 at the end of 3rd yr. At the end of 3rd yr the stock will sell for \$33.00 what is the present value of all future benefits if a discount rate of 11% is applied?
3. \$1,000 par value bonds are outstanding at 8% interest. The bonds mature in 25 yrs. What is the current price of the bonds if the present yield to maturity is 13%?
4. Preferred stock is issued at a fixed dividend of \$6 per share. With time yields have soared to 14%.
5. If the yield on the S&P preferred stock index declines, how will the price of the preferred stock be affected?

Price of Answer: Just US\$5 only

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## Finance Questions

Finance Questions Answers in \$9 only

Question 1

Lump sum issuance of stock.

Landon Corporation has issued 2,000 shares of common stock and 400 shares of preferred stock for a lump sum of \$72,000 cash.

Instructions

(a) Give the entry for the issuance assuming the par value of the common was \$5 and the market value \$30, and the par value of the preferred was \$40 and the market value \$50. (Each valuation is on a per share basis and there are ready markets for each stock.)

(b) Give the entry for the issuance assuming the same facts as (a) above except the preferred stock has no ready market and the common stock has a market value of \$25 per share.

Question 2

Treasury stock.

For numerous reasons, a corporation may reacquire shares of its own capital stock. When a company purchases treasury stock, it usually accounts for the stock using the cost method.

Instructions

Explain how a company would account for each of the following:

1. Purchase of shares at a price less than par value.

2. Subsequent resale of treasury shares at a price less than purchase price, but more than par value.

3. Subsequent resale of treasury shares at a price greater than both purchase price and par value.

4. Effect on net income.

Question 3

Dividends on preferred stock.

The stockholders’ equity section of Knott Corporation shows the following on December 31, 2007:

 Preferred stock—6%, \$100 par, 4,000 shares outstanding \$ 400,000 Common stock—\$10 par, 60,000 shares outstanding \$ 600,000 Paid-in capital in excess of par \$ 200,000 Retained earnings \$ 114,000 Total stockholders’ equity \$ 1,314,000

instructions

Assuming that all of the company’s retained earnings are to be paid out in dividends on 12/31/07 and that preferred dividends were last paid on 12/31/05, show how much the preferred and common stockholders should receive if the preferred stock is cumulative and fully participating.

Question 4

(EPS with Convertible Bonds and Preferred Stock)

On January 1, 2007, Crocker Company issued 10-year, \$2,400,000 face value, 10% bonds, at par. Each \$1,000 bond is convertible into 16 shares of Crocker common stock. Crocker’s net income in 2007 was \$300,000, and its tax rate was 40%. The company had 100,000 shares of common stock outstanding throughout 2007. None of the bonds were converted in 2007.

Instructions

(Round answers to 2 decimal places.)

a.) Compute diluted earnings per share for 2007.

b.) compute diluted earnings per share for 2007 using the same facts as those assumed for part (a), except that \$1,200,000 of 10% convertible preferred stock was issued instead of the bonds. Each \$100 preferred share is convertible into 7 shares of Crocker common stock.

Question 5

Basic and diluted EPS.

The following information was taken from the books and records of Simonic, Inc.:

Instructions

Compute basic and diluted earnings per share.

Price of Answer: Just US\$9 only

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## Assignment on Exxon Mobil FIN 534

The analysis should be 3-4 pages.
Lecture/discussion on types of business organizations and corporate securities.
Review of Financial Research Report: This assignment is an analysis of a US publicly-traded company; its common stock could be a prospective investment.
Company Overview. Conduct research and describe the company, its operations, locations, markets, and lines of business. Collect financial statements for the past three years, fiscal or calendar.

## Finance Questions III

Finance Questions III in \$3 Only

a) Explain why selecting a target senior debt rating is a reasonable approach to choosing a capital structure. Explain why a target senior debt rating of single-A is a prudent objective when there is only a very limited new issue market for non-investment-grade debt, and when investor willingness to purchase triple-B-rated debt is likely to be highly sensitive to the state of the economy.

b) The development of the new issue junk bond market had important implications for capital structure choice. The existence of a viable junk bond market means that firms can comfortably maintain higher degrees of leverage than they could prior to the development of this market. Do you agree or disagree? Justify your answer.

Price of Answer: Just US\$3 only

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## Financial Management: Unit 3 Individual Project

Assignment Name: Unit 3 Individual Project
Deliverable Length: 2 pages

By walking through a set of financial data for XYZ, this assignment will help you better understand how theoretical stock prices are calculated and how prices may react to market forces such as risk and interest rates. You will use both the CAPM (capital asset pricing model) and the constant growth model (CGM) to arrive at XYZ’s stock price.

To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at financial values.

Assignment Guidelines:

• Find an estimate of the risk-free rate of interest (krf). To obtain this value, go to Bloomberg.com: Market Data and use the “U.S. 10-year Treasury” bond rate (middle column) as the risk-free rate. In addition, you also need a value for the market risk premium. Use an assumed market risk premium of 7.5%.
• Using the information from the XYZ Stock Information document, record the following values:
• XYZ’s beta (ß)
• XYZ’s current annual dividend
• XYZ’s 3-year dividend growth rate (g)
• Industry P/E
• XYZ’s EPS

## Computation of Consolidated Net Income and Retained Earnings

Computation of Consolidated Net Income and Retained Earnings in \$3 Only

1. On January 1, 2002, Park Corporation purchased 70 percent of the common stock of North Corporation for \$1,100,000. At that date, north had \$1,150,000 of common stock outstanding and retained earnings of \$370,000. Equipment with a remaining life of 5 years had a book value of \$560,000 and a fair value of \$600,000. North’s remaining assets had book values equal to their fair values. The income and dividend figures for both Park and North are as follows:

Park’s income as shown does not include any income from its investment in North. Park’s retained earnings balance at the date of acquisition was \$1,402,000.

Required:

A) Compute consolidated net income for 2003.

B) Compute consolidated retained earnings as of December 31, 2003.