Database Expert Answers & Study Resources

Theory vs. Practice As discussed in the chapter, preferred stock offers an investor certain preferences over common stock in relation to dividends and liquidation value. In theory, these preferences should make preferred shares more attractive to potential investors than common stock. In practice, however, a majority of companies do not issue.

TheIRR is that discount rate that equates the present value of thecash outflows (or costs) with the present value of the cashinflows. True or False   .

Thenext dividend payment by Blue Cheese, Inc., will be $1.80 pershare. The dividends are anticipated to maintain a growth rate of 5percent forever. If the stock currently sells for $35 per share,what is the required return? (Round your answer to 2decimal places. (e.g., 32.16)) SHOW YOUR WORK   .

There are actually many interest rates in the economy. However, we can talk about THE interest rate because   The interest rate on short-term government bonds is the key interest rate to follow.   .

Themain difference between European and American optionsis: Holders of European options have more options than holders ofAmerican options. European options cannot be resold. European option holders can exercise the option prior toexpiration. American option holders have more options than European optionholders.   .

TheJoseph Company has a stock issue that pays a fixed dividend of$3.00 per share annually. Investors believe the nominal risk-freerate is 4 percent and that this stock should have a risk premium of6 percent. What should be the value of this stock? Answer: Enter the answers in blueshaded cells Required return C.

There are many areas in finance where the theory and thepractice do not coincide. The whole subject of capital structureand weighted average cost of capital is one of those. Many businesspeople say "Why would I borrow money - I earn all the money I need.I don't want to owe anyone.

There are three methods for estimating the cost of common stock from retained earnings: the CAPM method, the DCF method, and the bond-yield-plus-risk-premium method. The best estimate of the cost would be the average of the three methods. A) True B) False   .

There are three methods for valuing merger candidates. Briefly explain each of them.   .

There are three assets in the economy: stock ABC, market index, and risk-free asset. You hold one stock ABC and you can buy or sell other assets. The current price of ABC is $1. Having observed the historical prices, you know that the mean return on ABC is 10%, the.

There are three factors that can affect the shape of the Treasury yield curve (r*t, IPt, and MRPt) and five factors that can affect the shape of the corporate yield curve (r*t, IPt, MRPt, DRPt, and LPt). The yield curve reflects the aggregation of the impacts from these factors. Suppose.

There are three companies working on a new approach tocustomer-trackingsoftware. You work for a software company thatthinks this could be a good additionto its software line. If youinvest in one of them versus all three of them: a. Is your systematic risk likely to be very different? b. Is your unsystematic risk.

There are several ways to avoid emerging market crises. One way is to impose currency controls as Malaysia did after the Asian crisis of 1997. Some economists have advocated abandoning free capital movement as a means of insulating a nation’s currency from speculative attacks. However, open capital markets improve economic.

There are approximately 7 billion people in the world. The developed countries number an estimated 1 billion. Based on the lecture explain how and why global business has grown, the risks inherent in that growth. In your discussion, discuss the BRICS and any other categories that factor   .

There are 4 types of Credit Market Instruments. You have no doubt taken advantage of at least two of these. And in doing so you have also no doubt seen a change in interest rates after your loan has gone into effect. Maybe rates have gone higher, perhaps they have.

(Theory of interest/Actuarial math In return for payments of 400 at the end of 4 years and 700 atthe end of 7 years, you agree to pay X at the end of 3 years and 2Xat the end of 8 years. Find X if i = 0.09.   .

TheOaklandMillsCompanyhasdisclosedthefollowingfinancialinforma-tion in its annual reports for the period ending March 31, 2014:sales of $1.45 million, cost of goods sold of $812,500,depreciation expenses of $175,000, and interest expenses of$89,575. Assume that the firm has an average tax rate of 35percent. compute the cash flows toinvestors from operating activity.   .

There are four main steps in building a Monte Carlo simulation: select probability distribution(s); run the simulation model through a large number of trials; analyze results of multiple trials to assess risks and opportunities; and generate variables.   .

There are currently 2 investments in the portfolio, Investment Aand Investment B. Based on different economic forecasts, we havethe following information: For Investment A: State of Economy Probability of State Return if state occurs 5% Growth 0.3 -0.15 10% Growth 0.4 0.25 15% Growth 0.3 0.1 For Investment B: State of Economy Probability of State Return if state occurs 5% Growth 0.3 0.1 10% Growth 0.4 -0.25 15% Growth 0.3 0.2 What are the expected returns for.

Thelma and Louie, Inc., started the year with a balance ofretained earnings of $540 million and ended the year with retainedearnings of $580 million. The company paid dividends of $30 millionto the preferred stockholders and $70 million to commonstockholders. Calculate Thelma and Louie’s net income for theyear.   .

Theidea that central banks should be independent of political pressureis an idea that: Is relatively new Has been around since there were central banks Every central bank was founded upon Became quite popular in the early 1900s   .

There are a total of 80 physician hours available at the hospital. What is the optimal allocation of the hospital's resources? Life Expectancy Without Treatment (months) # of Physician Hours Cost of Treatment ($1,000) Age Children Job Life Expectancy with Treatment (months) 39 0physician 32 5 unemployed 360 360 36.

there are 4 statements in the descitiption to yield box please choose whether they are associated with: normal yield curved, flat yield curve, inverted yield curve, humped yield curve A yield curve is a graphical representation of the relationship between the yields and the maturities of securities issued by a given borrower.

there are numerous sources which provide financial analysis via the internet. List some of those resources.   .

Theories of Trade of Foreign Direct Investment. I was assignedand ask to write a 3-5 page paper detailing the Origin and use ofONE of the theory's listed below. Assignments: Mercantilism Absolute advantage Comparative advantage Heckscher-Olin theory Leontief paradox Product life cycle theory Include a minimum of three references to goodinformation sources beyond the text.   .

There are independent risks and systematic risks. Give an example of each occurrence. How can we, as individual investors, reduce risk given each condition? How can the markets as a whole reduce each type of risk?   .

There are seven principles on which the insurance industry operates. These principles provide strategic direction, ethics guidance, business decisioning, and more. Historically, an insurance company's failure to follow these principles can lead to that comany's demise. Do not list the principles. Explain.   .

There are three stocks. Stock A has a beta of A = 0.6 and an expected return of 8.8%. Stock B has a beta of B = 1.2 and an expected return of 13.6%. If the CAPM holds in this market, what should be stock C’s expected return if its.

There are 3 parts to this question - you purchase 100 shares of KSU Corporation for $35.29 per share. Over the next 12 months assume the price goes up to $ 44.26 per share, and you receive a qualified dividend of $0.52 per share. What would be your total return on.

There are two approaches to do style analysis on mutual funds.Which one is more immune to the window dressing problem?   .

There are many users of accounting information, such as businessowners, stockholders, customers, lenders, and suppliers. Among thefinancial statements is the statement of financial position. Answerthe following questions about the statement of financialposition: What information can be obtained from the "statement offinancial position?" Do you think there is difference in the type of.

There are 3 parts. Kindly, answer all of them!!   .

There are 2 investment funds that you read about in the Wall Street Journal, and you would like to evaluate their payback periods. Cloaks requires an initial investment of $1,949, while Daggers requires a $2855 initial investment. The following are the cash flows estimates: Assuming an 8% required rate of return,.

There are six farmers in Great Britain with access to governmentland to graze their cows for free. They all must share the land.Each farmer has an individual incentive to put as many of his cowson the land to increase his profits but each additional cowdepletes the resources for all six.

TheLo Sun Corporation offers a 10 percent bond with a current marketprice of $896.37. The yield to maturity is 11.34 percent. The facevalue is $1,000. Interest is paid semiannually. How many years isit until this bond matures?   .

There are just three risky assets with expected rates of return E(r1) = 15, E(r2) = 5 and E(r3) = 10, respectively, and variances of the returns 12=10, 22=15, and32=20. Assume that the returns of these assets are uncorrelated. (Keep all your answers to 4 decimal places.) (a)    Find the minimum-variance portfolio,.

There are many options when it comes to purchasing equipment with the most popular ones being financing and leasing. What are the differences between these two methods and is one better than the other? Provide an example of each, 150 word minimum.   .

there are 4 questions please anwser if each question is true or false. Apart from risk components, several macroeconomic factors-such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity-influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify.

There are three open positions on the board of directors of XYZ Enterprises. The company has 264.000 shares of stock outstanding. Each share is entitled to one vote, How many shares of stock must you own to guarantee your personal election to the board of directors if the firm uses.

There are 3 independent project, in which the profits and costs are calculated as follows; Project Initial Investment Annual net gain Useful life How many total combinations are available? Suppose your initial budget $11,500. Which options are available and feasible? Which option will you pick? Project Initial Investment Annual net gain Useful life A $2,000 200 20 B 3000 150 40 C 4000 300 30 D 3500 300 INFINITY     .

There are two categories of cash flows: single cash flows, referred to as "lump sums," and annuities. Based on your understanding of annuities, answer the following questions Which of the following statements about annuities are true? Check all that apply An annuity due is an annuity that makes a payment.

There are several publishers who provide beta estimates for companies, including Moody's, Standard and Poor's, Value line, and others. (1) If you saw three different betas for the same company that ranged from 1.0 to 1.7, how would you explain this difference to a local investment club gathering? (2) Some.

Theidea that businesses have a duty to serve society as well as thefinancial interest of stockholders is called   .

There are a number of reasons why a firm might want to repurchase its own stock. Read the statement and then answer the corresponding question about the company's motivation for the stock repurchase: Taft and Polk Corp. 's board of directors has decided to repurchase some of its stock on.

There are six farmers in Great Britain with access to government land to graze their cows for free. They all must share the land. Each farmer has an individual incentive to put as many of his cows on the land to increase his profits but each additional cow depletes the.

There are two firms : firm U and firm L. both firms have $50Mtotal assests and $8M EBIT (earnings before interest and taxes)..firm U is an unleveraged firm without debt. Firm L ia a leveragedfirm with 50% of debt and 50% of common equity. the pre-tax cost ofdebt for firm.

There are 4 financial statements available for the financial analysts to use in determining the value of a company’s stock. Discuss completely which financial statement you believe provides the most accurate indication of value for an investor? Which financial statement provides the least effective valuation information? Use examples from a.

Thegroup sells a set of tools for $20. The manufacturing cost (allvariable) is $6 per set. Pay a fee of $3,800 plus 10% of all revenue from tool setssold. Compute the break even number of tool sets.   .

There are five steps in the financial plan. Which step(s) is(are) the most critical? Explain your rationale.   .

There are different methods to intitiate a wire such as: Select one: a. email b. online c. bank branch d. a & c e. all of the above   .