You have a $9,000 portfolio which is invested in stocks A, B, and a risk-free asset. $4,000 is invested in stock A. Stock A has a beta of 1.84 and stock B has a beta of 0.68. How much needs to be invested in stock B if you want a portfolio beta of .95?
Select one:
a. $7,279
b. $5,000
c. $0
d. $1,750
e. $3,279

What are some instances where less than the commonly recommended emergency fund benchmark of 3 to 6 months may be appropriate?

Access your company’s financial statements or any public company statement; explain the difference between each financial statement

What are her expected returns and the risk from her investment in the three​ assets? How do they compare with investing in asset M​ alone?  

Hint​:

Find the standard deviations of asset M and of the portfolio equally invested in assets​ M, N, and O.

b.  Could Sally reduce her total risk even more by using assets M and N​ only, assets M and O​ only, or assets N and O​ only? Use a​ 50/50 split between the asset​ pairs, and find the standard deviation of each asset pair.

s.

Can you and your team prepare the income statement table, the operating cash flow (OCF) table, and the total cash flow from assets (CFFA) table for this project?

A company is considering a 6-year project that requires an initial outlay of $23,000. The project engineer has estimated that the operating cash flows will be $4,000 in year 1, $6,000 in year 2, $7,000 in year 3, $7,000 in year 4, $7,000 in year 5, and $9,000 in year 6. At the end of the project, the equipment will be fully depreciated, classified as 5-year property under MACRS. The project engineer believes the equipment can be sold for $5,000 at the end of the project. If the tax rate is 32% and the required rate of return is 16%, what is the net present value (NPV) of this project? (Answer to the nearest dollar.)

Use the information below and the Black-Scholes Option Pricing Model to answer the following questions.

a. What is the price of a call?
b. What is the exercise value of the call option?

c. What is the time value of the call option?

Dabney Electronics currently has no debt. Its operating income is $20 million and its tax rate is 40 percent. It pays out all of its net income as dividends and has a zero growth rate. The current stock price is $40 per share, and it has 2.5 million shares of stock outstanding. If it moves to a capital structure that has 40 percent debt and 60 percent equity (based on market values), its investment bankers believe its weighted average cost of capital would be 10 percent. What would its stock price be if it changes to the new capital structure?

What is your take on Jack Welch’s strategic leadership?

Discuss his strategy-making process for GE to be competitive.

Based on your independent research, what was the nature of the competitive advantage of GE under Jack Welch’s leadership?

The textbook defines six strategies. Which one did GE adopt and explain how and why?

Based on your independent research, discuss GE’s corporate governance and social responsibility during Jack Welch’s era.

A company that manufactures and sells tricycles around the world just completed a sale of 3,000 units to a chain of stores in Sweden at a contracted price of 375 krona per tricycle, with payment to be received in 90 days. The exchange rate today is 7.5 krona per dollar but it unexpectedly moves to 7.7 at the time of the payment. What is the fall in domestic revenue due to this move in the exchange rate?

You have started a business that sells a home gardening system that allows people to grow vegetables on their kitchen countertop. You are considering two options for marketing your product. The first is to advertise on local TV. The second is to distribute flyers in the local community. The TV option, which costs $40,000 annually, will promote the product more effectively and create a demand for 950 units per year. The flyer advertisement option costs only $5,000 annually but will create a demand for only 270 units per year. The price per unit of the indoor gardening system is $105, and the variable cost is $65 per unit. Assume that the production capacity is not limited and that the marketing cost is the only fixed cost involved in your business. What are the break-even points for both marketing options? The break-even point for TV advertisement is enter a number of units for the break-even point for TV advertisement units. The break-even point for flyer option is enter a number of units for the break-even point for flyer option units. Which one should you choose? You should choose the

Watson Inc. is an all equity company. Their rs is 11%. Risk free rate is 3%. They are considering a project that will cost $10 million and last 5 years. The project will generate revenues minus expenses of $3 million per year. If the tax rate is 40% should the company go forward with the project. What is the NPV? Reference the group problem in class.

You are using the FCFF approach to value a business. You have estimated that the FCFF for next year will be $146.50 million and that it will increase at a rate of 10 percent for each of the following four years. After that point, the FCFF will increase at a rate of 4 percent forever. If the WACC for this firm is 13 percent and it has no NOA, what is it worth? (Round answer to 2 decimal places, e.g. 524.25.) Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you’ve been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) The firm is worth $enter the value of the firm in millions of dollars rounded to 2 decimal places million.