Fill in the missing information in the following table. Assume that Portfolio AB is 70 percent invested in Stock A. (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $24.00 million. The plant and equipment will be depreciated over 10 years to a book value of $3.00 million, and sold for that amount in year 10. Net working capital will increase by $1.39 million at the beginning of the project and will be recovered at the end. The new diet drink will produce revenues of $8.50 million per year and cost $2.39 million per year over the 10-year life of the project. Marketing estimates 11.00% of the buyers of the diet drink will be people who will switch from the regular drink. The marginal tax rate is 29.00%. The WACC is 13.00%. Find the NPV (net present value).

Answer format: Currency: Round to: 2 decimal places.

Just wanted to make I'm doing the process correctly. thanks

Caspian Sea Drinks is considering the purchase of a plum juicer – the PJX5. There is no planned increase in production. The PJX5 will reduce costs by squeezing more juice from each plum and doing so in a more efficient manner. Mr. Bensen gave Derek the following information. What is the IRR of the PJX5?

a. The PJX5 will cost $2.36 million fully installed and has a 10 year life. It will be depreciated to a book value of $152,099.00 and sold for that amount in year 10.

b. The Engineering Department spent $46,108.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $24,577.00.

d. The PJX5 will reduce operating costs by $354,172.00 per year.

e. CSD’s marginal tax rate is 31.00%.

f. CSD is 65.00% equity-financed.

g. CSD’s 17.00-year, semi-annual pay, 5.73% coupon bond sells for $998.00.

h. CSD’s stock currently has a market value of $23.99 and Mr. Bensen believes the market estimates that dividends will grow at 2.41% forever. Next year’s dividend is projected to be $1.42.

Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

Please show the process so I could understand it better. Thanks!

The risk-free rate is 3.12% and the market risk premium is 9.17%. A stock with a β of 0.84 just paid a dividend of $2.65. The dividend is expected to grow at 20.18% for five years and then grow at 3.83% forever. What is the value of the stock?

Answer format: Currency: Round to: 2 decimal places.

Caspian Sea Drinks needs to raise $70.00 million by issuing additional shares of stock. If the market estimates CSD will pay a dividend of $2.60 next year, which will grow at 3.40% forever and the cost of equity to be 13.37%, then how many shares of stock must CSD sell?

Answer format: Number: Round to: 0 decimal places.

Just wanted to make if I'm doing the process right. thank you

1. A stock portfolio has an expected return of 12% and a standard deviation of 20%. A bond portfolio has an expected return of 6% and a standard deviation of 9%. The two portfolios have a correlation coefficient of 0.3. T-Bills have an expected return of 2%. Your coefficient of risk aversion is 7. (15 points)

1. What are the weights of the minimum variance portfolio that can be formed between the two portfolios if they are the only risky assets being considered?

2. What is the expected return and standard deviation of the minimum variance portfolio?

3. How much should you allocate between T-Bills and the risky portfolio?

4. What is the expected return and standard deviation of your complete portfolio?

The NPV method and the IRR method will always produce the same decision when

Determine if Project B can be included in the capital budget, if the cost of your initial investment is 11% and generates the following cash flows:

    Project B
0 -125
1 20
2 30
3 50
4 50
5 60
       
a. Can be selected as its IRR is 8%.
       
b. Should not be selected, as your IRR is less than the capital cost of the initial investment
       
c. Must not be selected, your MIRR is 10%.
       
d.Can be selected, because it has an NPV of $30.47
       
e. Can be selected because it has a PI of $1.18

You have borrowed $10,000. The loan is a 4 year loan with payments every 3 months and an interest rate of 3% APR. How much interest will you pay in the first three months?

Given that the risk-free rate is 5%, the expected return on the market portfolio is 20%, and the standard deviation of returns to the market portfolio is 20%, answer the following questions:

1. You have $100,000 to invest. How should you allocate your wealth between the risk free asset and the market portfolio in order to have a 15% expected return?

2. What is the standard deviation of your portfolio in (a)?

3. Now suppose that you want to have a portfolio, which pays 25% expected return. What is the weight in the risk free asset and in the market portfolio?

4. What do these weights mean: What are you doing with the risk free asset and what are you doing with the market portfolio?

5. What is the standard deviation of the portfolio in c?

6. What is your conclusion about the effect of leverage on the risk of the portfolio?

Contrary to the perfect capital market assumptions of Modigliani and Miller, the real world is messy and there are taxes, interest payments are tax deductible, there are costs of financial distress, etc. In our less than perfect world, which of the following are true?

A. Firm value INCREASES and WACC DECREASES initially as more debt is added to the firm's capital structure, however, there comes a point where adding additional debt generates potential costs of financial distress that outweigh the benefits of further reducing taxes. After this point, firm value starts to DECREASE and WACC starts to INCREASE as more debt is added.

B. Firm value and WACC are INDEPENDENT of the firm's capital structure.

C. Each firm has an optimal capital structure where WACC is maximized.

D. Each firm has an optimal capital structure where firm value is minimized.

E. Firm value INCREASES and WACC Increases initially as more debt is added to the firm's capital structure, however, there comes a point where adding additional debt generates potential costs of financial distress that outweigh the benefits of further reducing taxes. After this point, firm value and WACC start to DECREASE as more debt is added.

Please explain why!

ABC Co. has an average collection period of 40 days for its accounts receivable. If total credit sales for the year were $5,200,000, what is the balance in accounts receivable at year-end? Assume a 360-day calendar year. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

What is the difference between the conversion value and conversion premium?

1. Bonomo Corporation’s bonds have 4 years remaining to maturity. Interest is paid annually in arrears. The bonds have a par value of $1,000, and a coupon interest rate of 4.5%. (a) What is the bonds’ yield-to-maturity at a current price of $916? (b) What is the bonds’ yield-to-maturity at a current price of $1022? (c) Would you pay $916 for one of Bonomo’s bonds if you thought that the appropriate rate of interest (i.e., your expected rate of return) was 6%? (d) Why, or why not?

What is a good response to discussion below:

The crowdfunding site I chose to use is Indiegogo. This crowd fund uses reward-based crowdfunding. This involves raising funds for a new startup or organization that offers a product or service. Indiegogo focuses on project-based crowdfunding. I thought this was a great variation of crowdfunding because it introduces you to groundbreaking products and allows you to be involved in helping them take flight. You get the opportunity to support entrepreneurs and new technology from its beginning stages of development. I find it really cool to have the option to be a part of spring boarding some type of product people may want. Movies have even been included with Indiegogo, one is Super Troopers 2! Indiegogo charges a 5% platform fee and the payment processing fees range from 2.9%-3.9%. Since Indiegogo features project-based fundraising it is different then some other platform options which are designed for nonprofit fundraising. Indiegogo’s platform doesn’t allow you to keep raising money as your organization grows because of this project-based platform. By contributing on a project in Indiegogo you receive “perks” based on your contributions. The crowdfunding project I decided to choose was Midea: The window air conditioner, reinvented. I thought this was a cool idea especially considering all the window units in Pittsburgh. The AC unit is faster, and efficient. It saves 35% more energy than the traditional window ac and also allows you to still open your window. The U-shaped design blocks noise out and makes if faster and easier to set up as well. Midea is currently in the production of turning their prototype into the final product. $329 for the price of a 12k BTU unit isn’t too shabby either considering its not too far off from traditional pricing.