Financial literacy

3. (4 points) A stock is currently traded at So -$50. The one-month European cal

3. (4 points) A stock is currently traded at So -$50. The one-month European call option on the stock with strike K = $50 is being sold for $2. If an investor has $1000 to spare, …

3. (40 Points) Otter must decide whether to replace a 10 year-old packing machin

3. (40 Points) Otter must decide whether to replace a 10 year-old packing machine with a new one that costs$153,800. Replacing the old machine will increase net operating income(e…

3. (6 points) A bank has the following balance sheet (in millions), Its duration

3. (6 points) A bank has the following balance sheet (in millions), Its duration of liabilities is 0.377 years Amount- Duration Cash Federal funds Muni Loans Total A 0 years 0.01 …

3. (6 polnsy) Highlander Enterprises is currently an all-equity firm with an esp

3. (6 polnsy) Highlander Enterprises is currently an all-equity firm with an espected return of recapitalization in which it would borrow and repurchase 12%. Itis no taxes amount …

3. (7 points- The value of risk management on perfect financial markets) Steel I

3. (7 points- The value of risk management on perfect financial markets) Steel Inc. (SI) has the following end-of-year cash flows per share: $200 with a probability of 0.8 when th…

3. (9 points) Match the items in column 1 with the correct item in column 2. Col

3. (9 points) Match the items in column 1 with the correct item in column 2. Column 1 olumn 2 Capital structure 1. Stock value per dollar of net income 2. The markets are quick an…

3. (A modified version of Problem 13-22 in p.470 of the textbook) NEW PROJECT AN

3. (A modified version of Problem 13-22 in p.470 of the textbook) NEW PROJECT ANALYSIS You must analyze a potential new product—a caulking compound that Cory Materials’ R&D pe…

3. (Analyzing the cash flow statement) The cash flow statements for retailing gi

3. (Analyzing the cash flow statement) The cash flow statements for retailing giant BigBox Inc spanning the period 2010 – 2013 are found here: In Millions of U. S. Dollars Answer …

3. (Comparative Advantage) The following table shows tion capabilities for Austr

3. (Comparative Advantage) The following table shows tion capabilities for Austria and Russia. Production units Containers of Snowboards 20/unit 10/unit Cases of wine 3/unit 8/uni…

3. (Mishkin 13.17) How do hedge funds differ from mutual funds? 4. (Mishkin 17.)

3. (Mishkin 13.17) How do hedge funds differ from mutual funds? 4. (Mishkin 17.) Classify each of these transactions as an asset, a liability, or neither for each of the "players"…

3. (One step beyond) PC Fun & Games, Inc., produces a game for personal computer

3. (One step beyond) PC Fun & Games, Inc., produces a game for personal computers on a CD-ROM disk, which is entitled: Armageddon, the Final Battle. The company sells the disk…

3. (TCO 5) From the corporate financial officer\'s viewpoint, which of the follo

3. (TCO 5) From the corporate financial officer's viewpoint, which of the following is a reason for not calling a bond for redemption when the conversion value is above the par va…

3. (TCO 5) From the corporate financial officer\'s viewpoint, which of the follo

3. (TCO 5) From the corporate financial officer's viewpoint, which of the following is a reason for not calling a bond for redemption when the conversion value is above the par va…

3. (TCO 7) The beta coefficient is a measure of: (Points : 3) the relationship b

3. (TCO 7) The beta coefficient is a measure of: (Points : 3) the relationship between the return of an individual stock and the return on the market. the relationship between the…

3. (TCO 9) Protection and Indemnity coverage provided under Ocean Marine policy

3. (TCO 9) Protection and Indemnity coverage provided under Ocean Marine policy covers: (Points : 3) damage to the ship or its cargo. damage to the cargo only. essentially the sam…

3. (TCO 9) The Inside the Premises Theft of Money and Securities insuring agreem

3. (TCO 9) The Inside the Premises Theft of Money and Securities insuring agreement: (Points : 3) covers money and securities on an open-peril basis. includes coverage for employe…

3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a

3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a ra…

3. (TCO E) Daves Inc. recently hired you as a consultant to estimate the company

3. (TCO E) Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20…

3. (TCO E) Market risk is often measured using (Points : 4) the price/earnings r

3. (TCO E) Market risk is often measured using (Points : 4)        the price/earnings ratio.        the dividend yield.        alpha.        beta.        None of the above Questio…

3. (TCO E) Sapp Trucking\'s balance sheet shows a total of noncallable $45 milli

3. (TCO E) Sapp Trucking's balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%. This debt currently …

3. (a) Describe the fiduciary duties of an agent to his principal with 20% refer

3. (a) Describe the fiduciary duties of an agent to his principal with 20% reference to cases where appropriate Gillian was engaged by Twins Company Ltd ("TCL") as a disclosed age…

3. (calculating the after-tax cost of debt) Suppose your firm can borrow what it

3. (calculating the after-tax cost of debt) Suppose your firm can borrow what it needs from a local bank at 4.5% interest. If your firm’s effective tax rate is 40%, what is its af…

3. 100 pnts value: You did not receive full credit for this qu Problem 5-7 Calcu

3. 100 pnts value: You did not receive full credit for this qu Problem 5-7 Calculating Annuity Values LO 1] For each of the following annuities, calculate the annual cash flow. (D…

3. 200 points 2.00 points Consider the following income statement for the Heir J

3. 200 points 2.00 points Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales Costs $43,200 34,000 Taxable inco…

3. 25.00 points Problem 27-11 Lockboxes and Collection Time Bird\'s Eye Treehous

3. 25.00 points Problem 27-11 Lockboxes and Collection Time Bird's Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located in the Pen…

3. 5 years’ project is defined as it follows: • Revenues are $645,000 the first

3. 5 years’ project is defined as it follows: • Revenues are $645,000 the first year and will increase 3% per year for the next 4 years. • Fixed cost are $52,000 and they will inc…

3. A 10 year maturity bond with a coupon rate of 6.25% and face value of $1,000

3. A 10 year maturity bond with a coupon rate of 6.25% and face value of $1,000 makes semi-annual coupon payments. What is the bond’s yield to maturity if the bond is selling for:…

3. A CD matruing after 6 months with a par of one million dollars paying an inte

3. A CD matruing after 6 months with a par of one million dollars paying an interest rate of 1.5% annually, will have an Effective Annual Rate (EAR) of: a. 1.629% b. 1.622% c. 1.6…

3. A European put and European call both have strike price $17 and expire in six

3. A European put and European call both have strike price $17 and expire in six months. The call is currently selling for $1.30 and the put is currently selling for $1.40. Both o…

3. A U.S. based MNC has the following two sets of information, one for its domes

3. A U.S. based MNC has the following two sets of information, one for its domestic operations and one for its global operations: Domestic: Standard deviation of the company's ret…

3. A US multinational company is required to report its financial results in US

3. A US multinational company is required to report its financial results in US dollars. How does this create currency exchange risk for the company? What is the term which most a…

3. A bond with a 12 percent quarterly coupon rate has a yield to maturity of 16

3. A bond with a 12 percent quarterly coupon rate has a yield to maturity of 16 percent. The bond has a par value of $1,000 and matures in 20 years. Based on this information, a f…

3. A company is considering to select a project out of the two mutually exclusiv

3. A company is considering to select a project out of the two mutually exclusive projects. The Company’s cost of capital is 10% and the net after tax cash flow of ht project are …

3. A company must decide between 3 alternatives. First it will determine if each

3. A company must decide between 3 alternatives. First it will determine if each makes sense as a single alternative, and if any project makes sense it will compare the appropriat…

3. A company receives advance payments from customers that are immediately taxab

3. A company receives advance payments from customers that are immediately taxable but will not be recognized for accounting purposes until the company fulfils its obligation. The…

3. A coupon bond pays semi-annual interest is reported as having a price quotati

3. A coupon bond pays semi-annual interest is reported as having a price quotation of 117% of its $1,000 par value. If the last interest payment was made 2 months ago and the coup…

3. A decision to hedge receivables in the money market will be taken if: A: B: C

3. A decision to hedge receivables in the money market will be taken if: A: B: C: D: E: the domestic interest rate is higher than the foreign interest rate. the domestic interest …

3. A down-and-in option _______________. A. provides a payoff if the firm\'s sto

3. A down-and-in option _______________. A. provides a payoff if the firm's stock price falls below some specified percentage of what it was at the beginning of the option term B.…

3. A firm has 5,000,000 shares of common stock outstanding, each with a market p

3. A firm has 5,000,000 shares of common stock outstanding, each with a market price of $8.00 per share. It has 25,000 bonds outstanding, each selling for $1,100 with a $1,000 fac…

3. A firm offers credit terms of 3/15, net 20 to its customers, which means the

3. A firm offers credit terms of 3/15, net 20 to its customers, which means the firm allows its customers to: a. take a 15 percent discount on the invoice price if payment is made…

3. A firm with no debt financing has a firm value of $34 million. It has a corpo

3. A firm with no debt financing has a firm value of $34 million. It has a corporate marginal tax rate of 38 percent. The firm’s investors are estimated to have marginal tax rates…

3. A firm’s current balance sheet is as follows: Assets $100 Debt $10 Equity $90

3. A firm’s current balance sheet is as follows: Assets $100                               Debt $10                                                   Equity $90 a.What is the firm…

3. A large profitable corporation purchased a small jet plane for use by its exe

3. A large profitable corporation purchased a small jet plane for use by its executives. The plane cost $3,500,000. It has a depreciation life of seven years and $0 salvage value.…

3. A machine with a useful life of 3 years is purchased for $100,000. It is know

3. A machine with a useful life of 3 years is purchased for $100,000. It is known that the market value of the machine decreases by 10% each year. The book value can be calculated…

3. A new college hire has been offered a position with a firm starting at $55,00

3. A new college hire has been offered a position with a firm starting at $55,000.00 per year. The new hire is told that in three years her salary is expected to be S67,375.00 per…

3. A new product launch has the following cash flow attributes: Start-up cost at

3. A new product launch has the following cash flow attributes: Start-up cost at the beginning of the launch (t-0): $2,000,000 Annual production costs: Annual revenue: Product Lif…

3. A portfolio manager analyzes 100 stocks and constructs a mean-variance effici

3. A portfolio manager analyzes 100 stocks and constructs a mean-variance efficient portfolio using these 100 securities. (13 points) (a) How many estimates are needed to optimize…

3. A portfolio manager analyzes 100 stocks and constructs a mean-variance effici

3. A portfolio manager analyzes 100 stocks and constructs a mean-variance efficient portfolio using these 100 securities. (13 points) (c) Calculate alpha values for two stocks. (2…

3. A portfolio manager analyzes 100 stocks and constructs a mean-variance effici

3. A portfolio manager analyzes 100 stocks and constructs a mean-variance efficient portfolio using these 100 securities. (13 points) The market index has an expected return of 16…

3. A project will generate before tax cost savings of $83,000 per year for 5 yea

3. A project will generate before tax cost savings of $83,000 per year for 5 years, create additional depreciation expense of $73,000 per year and result in the following net work…