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Task - You recently joined a small investment company in Sydney as an intern. As part of your first assignment you've been given an opportunity to invest $10,000 of a not so sophisticated investor to the following alternatives:
Your client's required rates of return for these investments are 6% for the bond, 7% for preference shares and 15% for the ordinary shares. Using the above information, answer the following questions:
1. Calculate the value of each investment based on the required rate of return.
2. Which investment would you recommend and why? Research on the current trends and future prospects on each of the industries and include a summary.
3. Assume Southern Cross Electricals' Chief Finance Officer expects an earning downturn and a resulting decrease in growth of 3%. How does this affect your recommendation?
4. What required rates of return would make your recommendation indifferent to all three options?
How is this information useful to you from a managerial perspective? Explain your reasoning and support your conclusions with the numbers you have pulled out for the comparison above.
(a) What is the dividend yield for each of these four shares? (b) What is the expected capital gains yield? (c) Discuss the relationship among the various returns that you find for each of these shares?
Why does it matter whether Social Security is considered a pension plan or an entitlement program.How does the Federal Accounting Standards Advisory Board (FASAB) direct that Social Security be reported.
Discuss the accounting treatments for the expenditure incurred by Scooter Ltd in the last five years in accordance with AASB138. Provide relevant paragraph numbers from the standard to support your answer.
Net nonoperating expense before tax of $53,828 thousand. Great Lakes statutory tax rate for 2010 is 35%. Illustrate what is Great Lake’s effective tax rate?
A company establishes a sinking fund for plant retooling in 6 years at an estimated cost of $850,000. How much should be invested semi annually into an account paying 8.76% compounded semi annually? How much interest will the account earn in the 6 ye..
Oct. 10 Buyer returned to Urquhart Company unacceptable merchandise that had an invoice price of $600. Urquhart receives them one day later and restores them to inventory. The returned goods had cost Urquhart $400.
Flip Company at the end of the fiscal 2014 year has the following information: Credit Sales, $2,500,000 Sales Returns & Allowances $25,000 Accounts Receivable $200,000 and Allowance for Doubtful Accounts with a debit o $1,500. Prepare the general jou..
The inventory item class used to indicate how time is spent when performing services for a customer is called the:
calculation of time period when the company should harvest the forest analyzing the pros and cons.bunyan lumber llc
TruCut Mower Company manufactures a variety of gasoline-powered mowers for discount hardware and department stores. TruCut uses a job cost system and treats each customer's order as a separate job. Prepare a complete analysis of all activity in Work-..
Compute the following for the month of December: Variable overhead spending variance and Variable overhead efficiency variance.
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