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Your firm expects a total cash need of $9,000 over the next four months. They have a beginning cash balance of $1,000, and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $4.00. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month.
What is the total opportunity cost for a month based on the firm's current practice?
Comment on the following quote:"... agency problems do not mean that the corporate firm will not act in the best interest of shareholders, only that is costly to make it do so. However, agency problems can never be perfectly solved ..."
Increase in demand for funds as well as an increase in inflation will put upward pressure on interest rates and businesses will also reign in on capital purchases and expansion plans in order to keep their operating costs in line.
How much will you have left over each half year if you adopt the latter course of action?
Can you help Mr. Jackson develop a financial plan? Do you think his growth plan is feasible? Specific calculations are not necessary, but you should describe any specific calculations one may use to assist Mr. Jackson.
Suppose the company cancels the dividend and announces that it will use the money saved to repurchase shares. What happens to the stock price on the announcement date?
What are Divas projected profits for the fiscal year ending September 1995 - what factors affect a firm's exposure to exchange-rate risk? How much exposure to exchange rate risk does Diva Shoes have in April 1995?
determine the firm's free cash flow and calculate the liquidity, activity, debt, profitability, and market ratios for Jaedan industries. Perform a DuPont analysis and compare the firm to the industry ratios (see last table in this sequence). Highl..
Determine the WACC given the above assumptions and indicate how these might be useful to determine the feasibility of the capital project.
discuss the impact of each of the factors on your opinion. Offer some logic or current reference(s) to support your answer. Which factor do you think will have the biggest impact on interest rates?
If the appropriate discount rate is 12% and the tax rate is 40%, which copier should be selected? Why? Be sure to quantify your answer.
Describe Vernon's product life-cycle theory of FDI
Lawrence Industries' most recent annual dividend was $1.80 per share (D0=$1.80), and the firm's required return is 11%. Find the market value of Lawrence's shares when: Dividends are expected to grow at 8% annually for 3 years, followed by a 5% con..
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