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!
A hedge fund manager has a negative view of retail stocks right now based on the belief that Amazon will drive many retailers into bankruptcy. To act on his view, the manager sells short 20,000 shares of Target Corp (TGT). The manager finds a broker willing to lend the shares. The current market price is 59.00 and TGT pays quarterly dividends of $0.62 per share. Assume the next dividend takes place 3 months from today, and subsequent dividends follow the same pattern.
A) Assume the manager maintains the short sale for 6 months. List all transactions involved in the short-sale, holding the position, and closing it out after 6 months.
B) What is the profit (loss) on the short sale if the market price of TGT is $40.00 when the manager closes the position after 6 months? Assume there is no fee to borrow the stock.
C) What is the profit (loss) on the short sale if the market price of TGT is $68.00 when the manager closes the position after 6 months? Assume there is no fee to borrow the stock.
D) Now assume the investor pays approximately $1.70 per share over the 6 months to borrow the stock. This is an approximation based on a 5% borrow fee on $68 for 0.5 years. Re-compute your answers to b. and c. incorporating that fee.
A firm has a target capital structure of 40% common stock, 5% preferred stock and 55% debt. What is firm’s WACC?
The company will receive the payments for 12 years. What is the annual worth of this investment?
For each of the following? cases, indicate the amount of the? foreign-earned income exclusion.?
The balance sheet for Stratton Co. shows $400,00 in common equity, $100,000 in preferred stock, and $500,000 in long-term debt. The company has 20,000 common shares outstanding at a market price of $65 per share. what is the firm's weighted average c..
Baatar Hotels is interested in developing a new hotel in Mongolia. The company estimates that the hotel would require an initial investment of $20M. Baatar expects the hotel will produce positive cash flows of $5M a year at the end of each year for t..
Dan is going to buy a 19 year bond that pays a coupon rate of 11.56% per year and has a $1,000 par value. The bond currently priced at $1,326.92. What is the yield to maturity of this bond? Assume annual coupon payments. Round the answer to two decim..
Calculate the WACC based on the following information. Assume tax rate is 35%. Debt: $10M face value, current price $10.8M, 6.4% coupon rate, 25 years to maturity, semiannual coupon payment. (Hint: cost of debt is YTM of the bond) Equity: 495,000 sha..
The most recent financial statements for Hornick, Inc., are shown here (assuming no income taxes): Income Statement Balance Sheet Sales $ 6,700 Assets $ 22,050 Debt $ 8,050 Costs 3,850 Equity 14,000 Net income $ 2,850 Total $ 22,050 Total $ 22,050 As..
A stock is expected to pay a dividend of $1.50 per share in 2 months and 5 months. The stock price is $50, risk free rate is 8%. An investor has taken a long position in a 6 month forward contract on a stock. What is the forward price?
A fast-growing firm recently paid a dividend of $0.20 per share. The dividend is expected to increase at a 20 percent rate for the next three years. Afterwards, a more stable 10 percent growth rate can be assumed. If an 11 percent discount rate is ap..
A project that costs $3100 to install will provide annual cash flows of$7 for each of next 7 year. How high can discount rate be before you would reject project
There is expected to be no debt or available cash at the investment horizon.
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