Empirically, what are the wealth effects of corporate control activities? Who wins and who loses in corporate control contests? What explanations or theories are offered for the differences in returns of acquiring firms’ common stocks? Why are higher..
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Swenson’s is considering two mutually exclusive projects, Projects A and B, and has determined that the crossover rate for these projects is 11.7 percent.
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Muscarella Inc. has the following balance sheet and income statement data: Cash $ 14,000 Accounts payable $ 42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 210,000 Total CL $ 70,000 Total CA $294,000 Long-term debt 70,000. Assu..
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Barrett Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Barrett does not pay any dividends, and it has no plans to pay dividends in the near future. What is an estimate of Bar..
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Your portfolio is worth $100,000 and has a beta of 1.12. You have $30,000 of stock A which has a beta of 1.50. The rest of your portfolio is composed of stock B with a beta of 0.84 and stock C with a beta of 1.06. What is the value of stock C in your..
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Calculating OCF. Hammett, Inc., has sales of $34,630, costs of $10,340, depreciation expense of $2,520, and interest expense of $1,750. If the tax rate is 35 percent, what is the operating cash flow, or OCF?
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What is the required return for Dentrix Corporation? The risk-free rate is 2.7%, the risk premium is 7.7, the expected rate of inflation is 3.4% and the company can currently issue bonds at a YTM of 4.9%. The company's beta is estimated to be 0.9. Ro..
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Wexford Industrial Supply is considering a new project with estimated depreciation of $33,000, fixed costs of $35,000, and total sales of $74,500. The variable costs per unit are estimated at $5.00. What is the accounting break-even level of producti..
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An investor has two bonds in his portfolio that both have a face value of $1,000 and pay a 6% annual coupon. Bond L matures in 18 years, while Bond S matures in 1 year. What will the value of the Bond L be if the going interest rate is 4%? What will ..
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Dora Corp. is an all equity firm and its net income is projected to grow 20% in year 1, 25% in year 2, and 30% in year 3, and then 5.5 constant growth thereafter. The retention ratio is held constant at 60% and year 0 net income is 70Millioin. The fi..
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Rita Peatie filed a suit in a Connecticut state court against WalMart Stores, Inc., to recover for injuries to her head, neck, and shoulder. Peatie claimed that she had been struck two years earlier by a metal cylinder falling from a store ceiling. T..
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The U.S. three-month interest rate (annualized) is 2%. The British pound three-month interest rate (annualized) is 3.5%. Assume interest rate parity exists. The expected inflation over this period is 6% in the U.S. and 2% in England. Determine the do..
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