Financial literacy

12. If your company pays off a large long-term debt, what is the corresponding c

12. If your company pays off a large long-term debt, what is the corresponding change to the balance sheet? Assets (cash) decreases and liabilities (LT debt) decreases Assets (cas…

12. John and Barbara Roberts are starting to save for their daughter’s college e

12. John and Barbara Roberts are starting to save for their daughter’s college education. • Assume that today's date is September 1. • College costs are currently $10,000 a year a…

12. Jones Aircraft is a large contractor with many defense contracts. Some of th

12. Jones Aircraft is a large contractor with many defense contracts. Some of the contracts are fixed price and some are cost type. The contractor issues work to the shop for each…

12. Lang Enterprises is interested in measuring its overall cost of capital Calc

12. Lang Enterprises is interested in measuring its overall cost of capital Calculation of individual costs and WACC Current investigation has gathered the following data. The fir…

12. M&M is considering the purchase of a new machine for $50,000, installed. M&M

12. M&M is considering the purchase of a new machine for $50,000, installed. M&M will use the CCA method to depreciate the machine. This machine is included in CCA class 8…

12. McCain Foods, a Canadian food processing and distribution company, is consid

12. McCain Foods, a Canadian food processing and distribution company, is considering an investment in Germany. You are in McCain's corporate finance department and are responsibl…

12. Microsoft\'s beta is 0.9 and Amazon\'s beta is 1.5. Microsoft\'s market valu

12. Microsoft's beta is 0.9 and Amazon's beta is 1.5. Microsoft's market value of equity is 500 billion and Amazon's market value of equity is 1 trillion. What is the beta of an e…

12. Mortgage payments Aa Mortgages, loans taken to purchase a property, invo\'ve

12. Mortgage payments Aa Mortgages, loans taken to purchase a property, invo've regu ar pasyments at fixed intervais annuliles. Mortgages and then you make monthly payments to the…

12. Mortgage payments Mortgages, loans taken to purchase a property, involve reg

12. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of…

12. Phoenix Industries has pulled off a miraculous recovery. Four years ago it w

12. Phoenix Industries has pulled off a miraculous recovery. Four years ago it was near bankruptcy. Today, it announced a $1 per share dividend to be paid a year from now, the fir…

12. Preston Industries has two separate divisions. Each division is in a separat

12. Preston Industries has two separate divisions. Each division is in a separate line of business. Division A is the largest division and represents 70 percent of the firm's over…

12. Price risk and reinvestment rate risk Which of the following statements are

12. Price risk and reinvestment rate risk Which of the following statements are true? Check all that apply When interest rates rise, the coupon rates on newly issued bonds will in…

12. Profitability Index action-takeQuiz&quiz; probGuid-QNAPCOA801010000003 af926

12. Profitability Index action-takeQuiz&quiz; probGuid-QNAPCOA801010000003 af926e00d00008ctx-mayest-0006&kck-m.; Keep the Highest: (7 Attempts: 12. Profitability index AaA…

12. Southern Alliance Company needs to raise $55 million to start a new project

12. Southern Alliance Company needs to raise $55 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the…

12. Stanfield Technologies has the following capital structure. Debt 45% Common

12. Stanfield Technologies has the following capital structure. Debt 45% Common equity 55% The after-tax cost of debt is 7%; and the cost of common equity (in the form of retained…

12. Suppose you just won the state lottery, and you have a choice between recelv

12. Suppose you just won the state lottery, and you have a choice between recelvill $2,575,000 today or a 20-year annuity of $250,000, with the first payment coming one year from …

12. Suppose your firm is considering two mutually exclusive, required projects w

12. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class…

12. THE FINAL PROBLEM IS A CALCULATION PROBLEM with multiple parts Frozen Turkey

12. THE FINAL PROBLEM IS A CALCULATION PROBLEM with multiple parts Frozen Turkeys Scenario Cost of Land                                                               $ 210,000 Cos…

12. Temple is considering a new project whose data are shown below. The equipmen

12. Temple is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight line method over i…

12. The CFO of Lenox Industries hired you as a consultant to help estimate its c

12. The CFO of Lenox Industries hired you as a consultant to help estimate its cost of capital. You have obtained the following data: (1) rd = yield on the firm’s bonds = 7.00% an…

12. The cost of new common stock (external equity) is generally higher than the

12. The cost of new common stock (external equity) is generally higher than the cost of retained earnings (internal equity) because of a. Tax effects b. Investors' required return…

12. The following is part of the computer output from a regression of monthly re

12. The following is part of the computer output from a regression of monthly returns on Waterworks stock against the S&P 500 index. A hedge fund manager believes that Waterwo…

12. The preferred stock of ACE pays a constant $2.00 per share dividend. The com

12. The preferred stock of ACE pays a constant $2.00 per share dividend. The common stock of ACME just paid a $2.00 dividend per share, but its dividend is expcted to grow at 3 pe…

12. The preferred stock, which has a par value of $100 pays a 3% preferred stock

12. The preferred stock, which has a par value of $100 pays a 3% preferred stock dividend and is now priced in the market at $75 per share. What is the cost of capital for the fir…

12. The return relative solves the problem of a. inflation b negative returns c.

12. The return relative solves the problem of a. inflation b negative returns c. interest rates d. tax differences If the Dow Jones Industrials had a price appreciation of 6 perce…

12. The stock of Supergro Inc. is expected to grow at an annual rate of 28% for

12. The stock of Supergro Inc. is expected to grow at an annual rate of 28% for the next 2 years, after which growth will return to the normal constant growth rate of 8%. If the l…

12. Today is a day in May 2525 and a bond with an coupon rate of 8.0% just yeste

12. Today is a day in May 2525 and a bond with an coupon rate of 8.0% just yesterday paid a coupon. The bond matures in November 2540 and its quoted bond price is 118.03 percent o…

12. Twenty years ago, Elle Inc. began manufacturing and selling coin-operated ar

12. Twenty years ago, Elle Inc. began manufacturing and selling coin-operated arcade games. Dividends are currently $5.50 per share, having grown at a 8 percent compound annual ra…

12. Twenty years ago, Elle Inc. began manufacturing and selling coin-operated ar

12. Twenty years ago, Elle Inc. began manufacturing and selling coin-operated arcade games. Dividends are currently $5.50 per share, having grown at a 8 percent compound annual ra…

12. Use the data from the following fnancial tatements 3, The company paid inter

12. Use the data from the following fnancial tatements 3, The company paid interest espemse of $17,400 for 201 and had an ovr rate of 40% for 2011. What is the operating cash flow…

12. Using the above forecasts, determine the intrinsic value of High Flyer share

12. Using the above forecasts, determine the intrinsic value of High Flyer shares. Use the discounted dividends model; assume the forecast dividend payment in 2011 is $0.35 and th…

12. Valuing preferred stock Aa Aa Companies that have preferred stock outstandin

12. Valuing preferred stock Aa Aa Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpet…

12. Valuing preferred stock AaAa Companies that have preferred stock outstanding

12. Valuing preferred stock AaAa Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetu…

12. What is the intrinsic value for a CISCO Jan 50 put option when the current m

12. What is the intrinsic value for a CISCO Jan 50 put option when the current market pri CISCO share is 40? a. 0 b. -10 c. 10 d. 50 e. none of the above 13. The lower the riskles…

12. What is the intrinsic value for a CISCO Jan 50 put option when the current m

12. What is the intrinsic value for a CISCO Jan 50 put option when the current market price ofa CISCO share is 40? a. 0 b. -10 c. 10 d. 50 e. none of the above 13. The lower the r…

12. What would be the expected return and variance of a portfolio with 60% inves

12. What would be the expected return and variance of a portfolio with 60% invested in Google and 40% invested in Yahoo? Is the risk of the portfolio higher or lower than the risk…

12. When an investor buys shares of stock they have a; a. margin position b. sho

12. When an investor buys shares of stock they have a; a. margin position b. short position c. long position d. market order 13. When an investor shorts a stock that indicates the…

12. Which of the following is not related to the responsibilities principle? A.

12. Which of the following is not related to the responsibilities principle? A. Firm-wide policies to evaluate the financial and professional relationships of its professionals B.…

12. Which of the following statements is CORRECT? a. Assume that two bonds have

12. Which of the following statements is CORRECT? a. Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premiu…

12. Which of the following statements is not correct? a. The present value of a

  12. Which of the following statements is not correct? a. The present value of a three-year $150 annuity due exceeds thepresent value of a three-year $150 ordinary annuity.b. The…

12. Which one of the following is a source of cash? a. an increase in accounts r

12. Which one of the following is a source of cash? a. an increase in accounts receivable b. a decrease in common stock c. an increase in long-term debt d. a decrease in accounts …

12. Which one of the following statements is correct? A. Preferred stock is a fo

12. Which one of the following statements is correct? A. Preferred stock is a form of corporate equity B. All classes of stock have equal voting rights per share C. Common shareho…

12. Which one of these statements related to growing annuities and perpetuities

12. Which one of these statements related to growing annuities and perpetuities is correct? A. The cash flow used in the growing annuity formula is the initial cash flow at time z…

12. Wilson Electric is planning a $100 million expansion. This expansion will be

12. Wilson Electric is planning a $100 million expansion. This expansion will be financed, in part with debt issued with a coupon interest rate of 8.27%. The bonds have a 20-year …

12. You are long 10 gold futures contracts, established at an initial settle pri

12. You are long 10 gold futures contracts, established at an initial settle price of $1500 per ounce, where each contract represents 100 troy ounces. Your initial margin to estab…

12. You want to create a portfolio that is equally invested in a risk-free asset

12.  You want to create a portfolio that is equally invested in a risk-free asset and two stocks (i.e. 1/3 in each). One stock has a beta of .80. What must be the beta of the seco…

12. Your grandmother asks for your help in choosing a certificate of deposit (CD

12. Your grandmother asks for your help in choosing a certificate of deposit (CD) from a bank with a one year maturity and a fixed interest rate. The first certificate of deposit,…

12. a. Risk management can reduce the volatility of cash flows, and this decreas

12.       a.   Risk management can reduce the volatility of cash flows, and this decreases the probability of bankruptcy. b.   Risk management makes sense for firms directly engag…

12.. value: 2.50 points Problem 4-4 (LO4.3) For each of these situations, determ

12.. value: 2.50 points Problem 4-4 (LO4.3) For each of these situations, determine the savings amount. Use the time value of money tables in Exhibit 1-A, Exhibit 1-B. Exhibit 1-C…

12.00% 15.53% 18.62% 19.08% 20.46% Green Grocers is deciding among two mutually

12.00% 15.53% 18.62% 19.08% 20.46% Green Grocers is deciding among two mutually exclusive projects. The two projects have the following cash flows: Project A Project B Year Cash F…