QUESTION 5. Executive Cheese has issued debt with a market value of $100 million and hasoutstanding 15 million shares with a market price of $10 a share. It now announcesthat it intends to issue a further $60 million of debt and to use the proceeds to buyback common stock. Debtholders, seeing the extra risk,¦ Liabilities […]
QUESTION A. Assuming a constant rate for purchases, production, and sales throughout the year, what are Casa de Disenos existing operating cycle (OC), cash conversion cycle (CCC), and resource investment need? If Lean can optimize Casa de Disenos operations according to industry standards, what will Casa de Disenos operating (OC), cash conversion cycle (CCC), and […]
QUESTION 2. You are considering purchasing a consol that promises annual payments of $4.a. If the current interest rate is 5 percent, what is the price of the consol?b. You are concerned that the interest rate may rise to 6 percent. Compute the percentage change in the price of the consol and the percentage ¦ […]
QUESTION Abacus Co. wishes to maintain a growth rate of 11.8 percent a year, a debtequity ratio of 1.7, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at 0.89.What profit margin must the firm achieve? Solution: For Abacus Co.: Sustainable Growth Rate = ROE*(1-Dividend Payout Ratio) […]
QUESTION what is working capital? and explain in brief the various sources of working capital? Solution: Working capital is defined as a financial metric that representsthe operating liquiditywhich is available to an organization, business, or other government entity. It is a measure of both a companys short term financial position and its efficiency. It is […]
QUESTION Document Preview: Q. Terry martinez is considering taking out a loan to purchase a desk. The furniture store manager rarely finanaces purchases purchases but will for tery as a special offer. the rate will be 10% per year. and because the desk costs 600$ the interest will come to 60$ for a one-year loan. […]
QUESTION wanna get definition of above all 1. Modern finance theory indicates that the assumption of managerial role is to maximize the value of the firm. In other words to maximize the price of the stock. Wealth maximization is preferred due to 4 reasons 1) Building wealth for long term 2) Risk or Uncertainty 3) […]
QUESTION Great Pumpkin Farms (GPF) just paid a dividend of $5 on its stock. The growth rate in dividends is expected to be a constant 3 percent per year indefinitely. Investors require a 16 percent return on the stock for the first 3 years, a 11 percent return for the next 3 years, and an […]
QUESTION these are true or false1. Companies can eliminate all risk if they implement enough qualitative and quantitative risk techniques. 1_2. If the beta of Stock A is 1.4, this indicates that the stock is risky in comparison to every stock available.3. Futures and forwards are both contractual agreements ¦ 1. Companies can eliminate all […]
QUESTION 3. Suppose that a firm has both fixed-rate and floating-rate debt outstanding. What effect will an unexpected decline in interest rates have on the firms times-interest-earned ratio (EBIT/interest paid)? What about the ratio of the market value of debt to that of equity? Would you judge that levera¦ Decline in interest rates will have […]
