QUESTION 1. Compute the price of a share of stock that pays a $1- per-year dividend and that you expect to be able to sell in one year for $20, assuming you require a 15% return. 2. After careful analysis, you have determined that a firm s dividends should grow at 7% on average in […]
Date: September 2nd, 2020
QUESTION List two useful tools to help an entrepreneur to understand the cash requirements of a business and to estimate the financing needs of his or her business. irm. This is the pessimistic condition when the company is not able to collect all the receivables in the current period. Financing needs are dependent on the […]
Date: September 2nd, 2020
QUESTION 1. Which of the following three expressions uses the economists definition of money? a. How much money did you earn last week? b. When I go to the store, I always make sure that I have enough money. c. The love of money is the root of all evil. 2. There are three goods […]
Date: September 2nd, 2020
QUESTION Inventory Types what are the different inventory types? How do the types differ? Why are some types said to have dependent demand whereas other types are said to have independent demand? Inventory are the raw materials, work in process and finished goods that are the part of business assets and are ready for sale […]
Date: September 2nd, 2020
QUESTION (Computation of Future Values and Present Values) Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.) (a) What is the future value of $9,000 at the end of 5 periods at 8% compounded interest? (b) What is the present value of $9,000 due 8 periods […]
Date: September 2nd, 2020
QUESTION Champoux Hair Factory, Inc., has earnings before interest and taxes of $200,000. Annual interest amounts to $80,000, and annual depreciation is $80,000. Taxes are computed at a 40 percent rate. Existing bond obligations require the payment of $40,000 per year into a sinking fund. Champoux wishes to pay a $2 per-share dividend on the […]
Date: September 2nd, 2020
QUESTION A firm is about to double its assets to serve its rapidly growing market. It must choose between a highly automated production process and a less automated one. It also must choose a capital structure for financing the expansion. Should the asset investment and financing decisions be jointly determined, or should each decision be […]
Date: September 2nd, 2020
QUESTION The MacBurger Company, a chain of fast-food restaurants, expects to earn $200 million after taxes for the current year. The company has a policy of paying out half of its net after-tax income to the holders of the companys 100 million shares of common stock. A share of common stock of the company currently […]
Date: September 2nd, 2020
QUESTION On January 1, 2010, Corgan Company acquired 80 percent of the outstanding voting stock of smashing, Inc., for a total of 980,000 in cash and other consideration, at the acquisition date, smashing had common stock of 700,000 retained earnings of 250,000 and a noncontrolling interest fair value of 245,000. Corgan attributed the excess of […]
Date: September 2nd, 2020
QUESTION Flotation cost Goodbye, Inc., recently issued new securities to finance a new TV show. The project cost $10.5 million, and the company paid $750,000 in flotation costs. In addition, the equity issued had a flotation cost of 8 percent of the amount raised, whereas the debt issued had a flotation cost of 3 percent […]
Date: September 2nd, 2020
