QUESTION You have been managing a $5 million portfolio that has a beta of 1.40 and a required rate of return of 14%. The current risk-free rate is 6.25%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.75, what will be the required return on […]
Date: September 2nd, 2020
QUESTION The Ault Company made a credit sale of $15,000. The invoice was sent today with the terms, 3/15 net 60. This customer normally pays at the net date. If your opportunity cost of funds is 9% the expected payment is worth how much today? According to the given information, Credit sale made is $15,000 […]
Date: September 2nd, 2020
QUESTION 43. Your firm has a line of credit with your local bank for $50,000. The loan agreement calls for interest of 9% with a 5% compensating balance requirement which is based on the total amount borrowed. What is the effective interest rate if you need $42,750 for one year to cover your operating expens […]
Date: September 2nd, 2020
QUESTION Bond 1 has a price of 88.35 and a Macaulay duration of 12.7. Bond 2 has a price of 130.49 and has a duration of 14.6. A portfolio is created with a combination of face amount F1 from Bond 1 and F2 from Bond 2. F1 + F2 = 100, and the portfolio has […]
Date: September 2nd, 2020
QUESTION Last year Artworks, Inc. paid a dividend of $3.50. You anticipate that the companys growth rate is 10 percent and have required rate of return of 15 percent for this type of equity investment. What is the maximum price you would be willing to pay for the stock? As companys growth rate is 105, […]
Date: September 2nd, 2020
QUESTION LIFESAVER for work shown!Linear Technology had sales (all on credit) of $36 million and a gross profit margin of 30% last year. If Linear Technologys inventory averaged $3.9 million, and its accounts receivable were $5.0 million, what was the length of its operating cycle? This ratio indicates the time between acquisition of inventory and […]
Date: September 2nd, 2020
QUESTION I need this by Sunday, if Possible, and thanks ahead of time for agreeing to help me.Be sure to read Chapters 21 of Mayo, H.B. (2007), Basic finances: An introduction to financial institutions, investments, Individual Assignment Weighted Average Cost of CapitalBe sure to c WACC is easydont let it scare you WACC answers this […]
Date: September 2nd, 2020
QUESTION BALANCE SHEETCash 2,000,000 Accounts Payable and Accruals 18,000,000Accounts Receivable 28,000,000 Notes Payable 40,000,000Inventories 42,000,000 Long-Term Debt 60,000,000Preferred Stock 10,000,000Net Fixed Assets 133,000,000 Common Equity 77,000,000Total Assets 205,000,000 Total Claims 205,000,000& Well you have quite the capital budgeting problem here, complete with plenty of irrelevant and relevant cash flows. When you are trying to analyze […]
Date: September 2nd, 2020
QUESTION Michaels ltd has just paid ordinary shareholders an annual dividend amount of $1.75 per share and management has announced that it expects future dividends to grow at 4% per annum. The companys ordinary shares are currently selling in the market for $29.50.a) what is the expected rate of return from Market price of the […]
Date: September 2nd, 2020
QUESTION Levine Inc. is considering an investment that has an expected return of 15% and a standard deviation of 10%. What is the investments coefficient of variation?Desreumaux Incs stock has an expected return of 12.25%, a beta of 1.25, and is in equilibrium. If the risk-free rate is 5.00%, what is the m Part 1: […]
Date: September 2nd, 2020
