Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Vanderheiden Press Inc. and the Herrenhouse Publishing Company had the following balance sheets as of December 31, 2002 (thousands of dollars):
Vanderheiden Press
Herrenhouse Publishing
Current assets
$100,000
$ 80,000
Fixed assets (net)
100,000
120,000
Total assets
$200,000
Current liabilities
$ 20,000
Long-term debt
80,000
20,000
Common stock
50,000
Retained earnings
Total liabilities and equity
Earnings before interest and taxes for both firms are $30 million, and the effective federal-plusstate tax rate is 40 percent.
a. What is the return on equity for each firm if the interest rate on current liabilities is 10 percent and the rate on long-term debt is 13 percent?
b. Assume that the short-term rate rises to 20 percent. While the rate on new long-term debt rises to 16 percent, the rate on existing long-term debt remains unchanged. What would be the return on equity for Vanderheiden Press and Herrenhouse Publishing under these conditions?
c. Which company is in a riskier position? Why?
Calculate the average number in the queue, average number in the system, average time in the queue, average time in the system, the system utilization rate, and the probability that the system is empty.
In practice, how can a firm find out whether it is operating at (or near) its optimal capital structure?
A firm has 110,000 shares of stock outstanding. The firm is considering borrowing $1.5 million at 7.5% interest and using the loan proceeds to repurchase 30,000 shares of stock. What is the value of the firm? Ignore taxes.
The sales price would be set at 1.5 times the variable cost per unit; the variable cost per unit is estimated to be $7.50; and fixed costs are estimated at $120,0000. What sales volume would be required to break even, i.e., to have EBIT = zero?
Is there a particular name brokerage firms and investors use to designate the technique, and if so what is it?
A financial advisor claims that a particular stock earned a totalreturn of 10 percent last year. During the year the stock pricerose from $30-$32.50. What dividend did the stock pay?
Prepare an amortization schedule for a five-year loan of $50,000. The interest rate is 8 percent per year, and the loan calls for equal annual payments. How much interest is paid in the third year? How much total interest is paid over the life of ..
Samuelson Plastics has 7.5 percent preferred stock outstanding. Currently, this stock has a market value per share of $52 and a book value per share of $38. What is the cost of preferred stock?
1. identify and analyse the achievements of the burns and scapens framework for studying management accounting change
Q8-7. In what way is the NPV consistent with the principle of shareholder wealth maximization? What happens to the value of a firm if a positive-NPV project is accepted? If a negative-NPV project is accepted?
You want to borrow $47,170 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1,160, but no more. Assume monthly compounding. What is the highest rate you can afford on a 48-month APR loan?
Suppose the spot exchange rate for the canadian for the canadian dollar is Can 1.02 and the six month forard rate is Can 1.03.
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd