Questions
Describe the benefits of the private-equity ownership model versus public ownership and family-ownership.

Describe the benefits of the private-equity ownership model versus public ownership and family-ownership.

In: Finance

3.  Problem 3-11 (Balance Sheet Analysis) Balance Sheet Analysis Complete the balance sheet and sales information in...

3.  Problem 3-11 (Balance Sheet Analysis)

Balance Sheet Analysis

Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data:

Total assets turnover: 1.7
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30%
Total liabilities-to-assets ratio: 40%
Quick ratio: 0.90
Days' sales outstanding (based on 365-day year): 36.5 days
Inventory turnover ratio: 3.25

Do not round intermediate calculations. Round your answers to the nearest whole dollar.

Partial Income Statement Information
Sales $  
Cost of goods sold     
Balance Sheet
Assets Liabilities and Equity
Cash $    Accounts payable $   
Accounts receivable    Long-term debt   50,000
Inventories    Common stock   
Fixed assets    Retained earnings   100,000
Total assets $   400,000 Total liabilities and equity $   

In: Finance

Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation:...

Profit Margin and Debt Ratio

Assume you are given the following relationships for the Haslam Corporation:

Sales/total assets 1.4
Return on assets (ROA) 4%
Return on equity (ROE) 7%

Calculate Haslam's profit margin and liabilities-to-assets ratio. Do not round intermediate calculations. Round your answers to two decimal places.

Profit margin: _______%

Liabilities-to-assets ratio: ______%

Suppose half of its liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. ________%

In: Finance

4.  Problem 3-12 (Comprehensive Ratio Calculations) Comprehensive Ratio Calculations The Kretovich Company had a quick ratio of...

4.  Problem 3-12 (Comprehensive Ratio Calculations)

Comprehensive Ratio Calculations

The Kretovich Company had a quick ratio of 1.3, a current ratio of 4.0, a days sales outstanding of 36.5 days (based on a 365-day year), total current assets of $900,000, and cash and marketable securities of $110,000. What were Kretovich's annual sales? Do not round intermediate calculations. Round your answer to the nearest dollar.

$ ______________

In: Finance

Know what an offshore financial center means and be able to differentiate between an operational center...

Know what an offshore financial center means and be able to differentiate between an operational center and booking center

In: Finance

can you please give example and explanation about opportunities cost, discount cash flow, discount rates ,prescent...

can you please give example and explanation about opportunities cost, discount cash flow, discount rates ,prescent value, free cash flow, NPV, IRR , stock valuation in finance management.

In: Finance

Describe the characteristics and benefits of interest rate swaps compared with other forms of interest rate...

Describe the characteristics and benefits of interest rate swaps compared with other forms of interest rate risk management, such as forward rate agreements and interest rate futures


In: Finance

what is the difference between idiosyncratic and systemic risk? please give an example of each. which...

what is the difference between idiosyncratic and systemic risk? please give an example of each. which one can be eliminated through diversification? how do we measure a company's systemic risk?

In: Finance

Describe the characteristics and benefits of interest rate swaps compared with other forms of interest rate...

Describe the characteristics and benefits of interest rate swaps compared with other forms of interest rate risk management, such as forward rate agreements and interest rate futures


In: Finance

Suppose your company needs to raise $43 million and you want to issue 30-year bonds for...

Suppose your company needs to raise $43 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 6 percent, and you’re evaluating two issue alternatives: A semiannual coupon bond with a 6 percent coupon rate and a zero coupon bond. Your company’s tax rate is 35 percent. Assume a par value of $1,000

a-1. How many of the coupon bonds would you need to issue to raise the $43 million? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  Number of coupon bonds
a-2. How many of the zeroes would you need to issue? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  Number of zero coupon bonds
b-1.

In 30 years, what will your company’s repayment be if you issue the coupon bonds? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

  Coupon bonds repayment $
b-2.

What if you issue the zeroes? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

  Zeroes repayment $

  

c.

Calculate the firm’s aftertax cash outflows for the first year for each bond. (Enter your answers as positive values in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

  

  Coupon bonds
$
  Zero coupon bonds
$

In: Finance

Halliford Corporation expects to have earnings this coming year of $3.29 per share. Halliford plans to...

Halliford Corporation expects to have earnings this coming year of $3.29 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two​ years, the firm will retain 48 % of its earnings. It will then retain 20 %of its earnings from that point onward. Each​ year, retained earnings will be invested in new projects with an expected return of 27.77 %per year. Any earnings that are not retained will be paid out as dividends. Assume​ Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If​ Halliford's equity cost of capital is 9.6 %, what price would you estimate for Halliford​ stock? ​Note: Remenber that growth rate is computed​ as: retention rate times × rate of return. The price per share is ​$. ?. ​ (Round to the nearest​ cent.)

In: Finance

You have $243358 to invest in a stock portfolio (this amount is your original wealth). Your...

You have $243358 to invest in a stock portfolio (this amount is your original wealth). Your choices are Stock H, with an expected return of 15.62 percent, and Stock L, with an expected return of 10.48 percent. Legal constraints require you to invest at least $45252 in stock L. If your goal is to create a portfolio with an expected return of 21.52 percent on your original wealth, what is the minimum amount you must borrow (and subsequently repay) at the risk free rate of 4.41 percent to achieve your goal? Answer in $ to two decimals.

In: Finance

Exchange rate movement Suppose a basket of goods in Paris cost 133 euros and the same...

Exchange rate movement


Suppose a basket of goods in Paris cost 133 euros and the same basket purchased in

New York cost $153.

A. At what exchange rate between euros and dollars is the cost of the basket of goods the same in each City?

B. Now suppose that over the next year inflation in France is expected to be 2% while in the US the forecast is for 6% inflation. What exchange rate do you expect a year from today?  

In: Finance

Explain how the debt mechanism can be a leverage in the company?

Explain how the debt mechanism can be a leverage in the company?

In: Finance

You have the following information about the yield curve – Term 1 2 3 4 Rate...

You have the following information about the yield curve – Term 1 2 3 4 Rate 4% 4.50% 5% 5.50% What should be the price of a bond with a face value of $100 and an annual coupon of 5% that matures in 4 years. Show all calculations.

In the above question if the market price of the bond is $95, can you do arbitrage? Show how and your profit or loss. Show all calculations.

If the market price of the bond is $115, can you do arbitrage? Show how and your profit or loss. Show all calculations.

Estimate the 1-year forward rate 1 year from now. Show all calculations.

Estimate the 1-year forward rate 2 years from now. Show all calculations.

Estimate the 1-year forward rate 3 years from now. Show all calculations.

In: Finance