QUESTION CFA Examination Level II Westfield Capital Management Companys equity investment strategy is to invest in companies with low price-to-book ratios, while taking into account differences in solvency and asset utilization. Westfield is considering investing in the shares of either Jerrys Department Stores (JDS) or Miller Stores (MLS). a. Calculate each of the following ratios […]
QUESTION A $1,000 face value corporate bond with a 6.75% coupon (paid semiannually) has 10 years leftto maturity. It has a credit rating of BB and a yield to maturity of 8.2%. The firm recentlybecame more financially stable and the rating agency is upgrading the bonds to BBB. Thenew appropriate discount rate will be 7.1%. […]
QUESTION Balance sheet relations. The balance sheet of Gold Fields Limited, a South African gold mining company, for the year ended June 30, 2007, showed current assets of R6,085.1, noncurrent assets of R49,329.8, noncurrent liabilities of R13,948.4, and current liabilities of R4,360.1. Gold Fields reports all amounts in millions of South African Rand (R). Compute […]
QUESTION P6-13 (Expected Cash Flows and Present Value) Dannys Lawn Equipment sells high-quality lawn mowers and offers a 3-year warranty on all new lawn mowers sold. In 2012, Danny sold $300,000 of new specialty mowers for golf greens for which Dannys service department does not have the equipment to do the service. Danny has entered […]
QUESTION BE6-1 Chris Spear invested $15,000 today in a fund that earns 8% compounded annually. To what amount will the investment grow in 3 years? To what amount would the investment grow in 3 years if the fund earns 8% annual interest compounded semiannually? Future value = Present Value * ((1 rate of interest)^Time) Future […]
QUESTION Computations involving different cost-flow assumptions. Sun Health Foods purchases of vitamins during 2008, its first year of operations, were as follows: Quantity Cost per Unit Total Cost January 5 Purchase ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION Here are four industries and four forecasts for the macroeconomy. Match the industry to the scenario in which it is likely to be the best performer. Industry Economic Forecast a. Housing construction (i) Deep recession: falling inflation, interest rates, and GDP ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION Journal entries for coupons. Morrisons Cafeteria sells coupons that customers may use later to purchase meals. Each coupon book sells for $25 and has a face value of $30; that is, the customer can use the book to purchase meals with menu prices of $30. On January 1, 2008, redeemable unused coupons that Morrisons […]
QUESTION Carol Harrod is the investment officer for a $100 million U.S. pension fund. The fixed-income portion of the portfolio is actively managed, and a substantial portion of the funds large capitalization U.S. equity portfolio is indexed and managed by Webb Street Advisors. Harrod has been impressed with the investment results of Webb Streets equity […]
QUESTION Danielle Stone, the manager of Image Runner, Inc., prepared the companys balance sheet while the accountant was ill. The balance sheet contains some errors. In particular, Stone knew that the balance sheet should balance, so she plugged in the stockholders equity amount needed to achieve this balance. The stockholders equity amount is not correct. […]
