JJ Industries will pay a regular dividend of $3.15 per share for each of the next four years. At the end of the four years, the company will also pay out a $83 per share liquidating dividend, and the company will cease operations. If the discount rat..
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The Birdhouse Manufacturing Company posted $687,400 total sales in 2012 and generated a profit margin of 4.8 percent. At the end of the year, Birdhouse's balance sheet reported total debt of $210,000 and total equity of $365,000. What is the return o..
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Consider two projects with the following cash flows: Project S is a 4 year project with initial (time 0) cash outflow of 3000 and time 1 through 4 cash inflows of 1500, 1200, 800 and 300 respectively. Project L is a 4 year project with initial (time ..
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Lamar Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 30; and it currently pays after 5 days and takes discounts. Lamar plans to expand, which will require additional financing. Assume 365 days in year for your calculation..
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On Sept 30th, the Disney Corp had a Retained Earnings balance of $7,933 million. One year later it had jumped to $9,557 million. They sold no stock during the year but did pay $442 million in common dividends. Their DPS = $0.51. Given this informatio..
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First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. If you made a deposit of $8,500 in each bank, how much more money would you earn from your Second Ci..
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Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $26,100, and the company expects to sell 1,460 per year. The company currently sells 1,960 units of its existing model per year..
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We are evaluating a project that costs $829,000, has an nine-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 113,000 units per year. Calculate the best-case N..
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Mullineaux Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity is 16 percent, and the cost of debt is 8 percent. The relevant tax rate is 30 percent.
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In order to fund her retirement, Michele requires a portfolio with an expected return of 0.11 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock..
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There does not exist a financial instrument to insure against the default of bonds or asset-backed debt securities. In the case of two random variables, X and Y , that are independent, the variance of X + Y is simply the sum of the variances of both ..
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Suppose you purchase eight put contracts on Testaburger Co. The strike price is $35, and the premium is $2.20. If, at expiration, the stock is selling for $26 per share, what are your put options worth? What is your net profit?
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