Mrs. Jay has asked you, the CFO of the company, to write a memo outlining the advantages and disadvantages of using debt relative to equity. She also wants the memo to cover the impact that his decision might have on the firm’s weighted cost of capital and overall firm value.

You expect a share of stock to pay dividends of $1.40, $1.65, and $1.90 in each of the next 3 years. You believe the stock will sell for $19.00 at the end of the third year.

a. What is the stock price if the discount rate for the stock is 20%?

b. What is the dividend yield for year 1?

c. What will be the dividend yield at the start of year 2?

What is the self-supporting growth rate for Typhoonforce in percent? Typhoonforce generated $5,000,000 in sales during 2018, and its year-end total assets were $2,500,000. Also, at year-end 2018, spontaneous liabilities were $700,000. Looking ahead to 2019, the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 2%, and its payout ratio will be 66%..

The CFO of Rosecurity, is planning for the company's operations next year, and he wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data (in millions) for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year (in millions)? Last year's sales = $350, Last year's accounts payable = $40, Sales growth rate = 3%, Last year's notes payable = $50, Last year's total assets = $500, Last year's accruals = $30, Last year's profit margin = 3%, Target payout ratio = 57%

A T-bond with semi-annual coupons has a coupon rate of 7%, face value of $1,000, and 2 years to maturity. If its yield to maturity is 5%, what is its Macaulay Duration? Answer in years, rounded to three decimal places.

Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of 9 percent. Both bonds have 7 years to maturity, make semiannual payments, and have a YTM of 6 percent.

-If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond J?

-If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond K?

-If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond J?

-If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond K?

You must evaluate a proposal to buy a new milling machine. The base price is $192,000, and shipping and installation costs would add another $16,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $134,400. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $8,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $46,000 per year. The marginal tax rate is 35%, and the WACC is 13%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

1. How should the $5,000 spent last year be handled?
   1. Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   2. The cost of research is an incremental cash flow and should be included in the analysis.
   3. Only the tax effect of the research expenses should be included in the analysis.
   4. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.
   5. Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis

2. What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.
   $

3. What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

   Year 1 $

   Year 2 $

   Year 3 $

4. Should the machine be purchased

Share the most popular issue/topic on stock market. This could be a short article or a video (no longer than 5 minutes). Please either attach the article or share the link. Write down a brief introduction about the sharing. no write by hand，please typing, have a good one!

You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $170,000, and it would cost another $25,500 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $76,500. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The equipment would require a $9,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $42,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%.

1. What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent. Negative amount should be indicated by a minus sign.
   $

2. What are the project's annual cash flows in Years 1, 2, and 3? Round your answers to the nearest cent.

   In Year 1 $

   In Year 2 $

   In Year 3 $

3. If the WACC is 10%, should the spectrometer be purchased?

You must evaluate a proposal to buy a new milling machine. The base price is $172,000, and shipping and installation costs would add another $7,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $60,200. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $10,000 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $32,000 per year. The marginal tax rate is 35%, and the WACC is 14%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

1. How should the $5,000 spent last year be handled?
   1. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.
   2. Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   3. Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   4. The cost of research is an incremental cash flow and should be included in the analysis.
   5. Only the tax effect of the research expenses should be included in the analysis.
   
   -Select-IIIIIIIVVItem 1

2. What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.
   $

3. What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

   Year 1 $

   Year 2 $

   Year 3 $

4. Should the machine be purchased?
   -Select-YesNo

 You have been given the expected return data shown in the first table on three assets—​F, G, and H —over the period​ 2016-2019:

Using these​ assets, you have isolated the three investment alternatives shown in the following​ table:

Alternative Investment

1 100% of asset F

2 ​50% of asset F and​ 50% of asset G

3    ​50% of asset F and​ 50% of asset H

a.  Calculate the average return over the​ 4-year period for each of the three alternatives.

b.  Calculate the standard deviation of returns over the​ 4-year period for each of the three alternatives.

c.  Use your findings in parts a and b to calculate the coefficient of variation for each of the three alternatives.

d.  On the basis of your​ findings, which of the three investment alternatives do you think performed better over this​ period? ​ Why?

3- CD is an all equity firm that has 10,000 shares of stock outstanding at a market price of $20 a share. The firm's management has decided to issue $50,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 5 percent.

a. What are the earnings per share at the break-even level of earnings before interest and taxes? Ignore taxes.

Draw a graph with EPS on the vertical axis and EBIT on the horizontal axis for the all equity company and the company with leverage. Show on the graph the break-even level of earnings for the two financing alternatives.

1. The primary objective of venture capital is to make big profits by investing in risky start-ups.

Group of answer choices

True

False

2. Investment bank usually sets the IPO price at the fair value.

Group of answer choices

True

False

ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 8 years to maturity that is quoted at 106.5 percent of face value. The issue makes semiannual payments and has an embedded cost of 6.4 percent annually. a. What is the company’s pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the tax rate is 23 percent, what is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)