Blue Eagle Aviation stock has an expected annual return of 9.59 percent. The stock is currently priced at 68.72 dollars per share and has an expected dividend yield of 4.16 percent. What is the price of the stock expected to be in 1 year?

QUESTION THREE

Discuss the following capital structure theories and their implication to the value of the firm.

1. The traditional Theory                                                                                   
2. The Net Income Approach                                                                           
3. The Net Operating Income Approach                                                          
4. Modigliani and Miller (MM) Approach                                                       

Consider the two (excess return) index-model regression results for stocks A and B. The risk-free rate over the period was 5%, and the market’s average return was 13%. Performance is measured using an index model regression on excess returns. Stock A Stock B Index model regression estimates 1% + 1.2(rM − rf) 2% + 0.8(rM − rf) R-square 0.605 0.451 Residual standard deviation, σ(e) 10.8% 19.6% Standard deviation of excess returns 22.1% 25.9% a. Calculate the following statistics for each stock: (Round your answers to 4 decimal places.) b. Which stock is the best choice under the following circumstances?

Target is the publicly traded company I chose. Review its most recent Annual Report.

Use the Income Statement and Balance Sheet to determine the changes in:

assets, liabilities, and equity

total revenue and net income

Briefly describe the change from the current and prior years in each of these key areas and determine if the changes would be positive or negative from an investor / stockholder’s view.

John Doe has just been offered a home loan towards purchase of house that is being sold for ​$250,000.He will be required to make a 5​% down​ payment, as well as mortgage processing fees and closing costs of ​$4,000. The loan has to be paid off in monthly payments over a​ 30-year period at a fixed interest rate of 4​% per year compounded monthly. He will also be required to pay an additional $200 per month as mortgage insurance. Using​ Excel, answer the following​ questions:(PLEASE SHOW FORMULA)

The monthly mortgage payment is _______

The total monthly payment is _________

The nominal APR is________

 The effective APR is_________

Over the​ 30-year period, the total amount of interest paid on the loan is__________

The interest amount in the month 69 payment is __________

 The principal amount in the month 69 payment is _________

The balance on the loan immediately after making the payment at the end of  month 69   is___________

A portfolio has 65 shares of Stock A that sell for $40 per share and 130 shares of Stock B that sell for $31 per share. What is the portfolio weight of Stock A? What is the portfolio weight of Stock B?

Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio.

Consider the following case:

Monroe Manufacturing has a quick ratio of 2.00x, $34,875 in cash, $19,375 in accounts receivable, some inventory, total current assets of $77,500, and total current liabilities of $27,125. The company reported annual sales of $800,000 in the most recent annual report.

Over the past year, how often did Monroe Manufacturing sell and replace its inventory?

2.86x

37.85x

34.41x

8.01x

The inventory turnover ratio across companies in the manufacturing industry is 37.851x. Based on this information, which of the following statements is true for Monroe Manufacturing?

Monroe Manufacturing is holding less inventory per dollar of sales compared with the industry average.

Monroe Manufacturing is holding more inventory per dollar of sales compared with the industry average.

You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $800,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $2,040,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You’ve collected data from the companies’ financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.)

Data Collected (in dollars)

Using this information, complete the following statements to include in your analysis.

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Integrativelong dashInvestment decision Holliday Manufacturing is considering the replacement of an existing machine. The new machine costs $ 1.20 million and requires installation costs of $ 150 comma 000. The existing machine can be sold currently for $ 185 comma 000 before taxes. It is 2 years old, cost $ 800 comma 000 new, and has a $ 384 comma 000 book value and a remaining useful life of 5 years. It was being depreciated under MACRS using a 5-year recovery period and therefore has the final 4 years of depreciation remaining. If it is held for 5 more years, the machine's market value at the end of year 5 will be $ 0. Over its 5-year life, the new machine should reduce operating costs by $ 350 comma 000 per year. The new machine will be depreciated under MACRS using a 5-year recovery period. The new machine can be sold for $ 200 comma 000 net of removal and cleanup costs at the end of 5 years. An increased investment in net working capital of $ 25 comma 000 will be needed to support operations if the new machine is acquired. Assume that the firm has adequate operating income against which to deduct any loss experienced on the sale of the existing machine. The firm has a 9.0 % cost of capital and is subject to a 40 % tax rate. a. Develop the relevant cash flows needed to analyze the proposed replacement. b. Determine the net present value (NPV) of the proposal. c. Determine the internal rate of return (IRR) of the proposal. d. Make a recommendation to accept or reject the replacement proposal, and justify your answer. e. What is the highest cost of capital that the firm could have and still accept the proposal?

Complete the t-accounts below using the transactions listed (1.5 pts). 4. Calculate the ending balance of each account (.5 pts). • styx. issues a $1,000 bond in order to raise cash • styx. issues $5,000 in stocks to raise cash • styx. spends $2,400 of its cash to purchase a new tuning machine Debits - + Credits Debits + - Credits Debits Credits 5. Complete the Accounting Equation below (.5 pts). 6. Circle the mathematical functions that complete the accounting equation (.5 pts). Assets: ____________ + / - / = Liabilities: ________________ + / - / = Owners Equity: _____________

The $5,000 stock sale from the first page was split into 500 shares. Calculate the price of a share of (a company called Styx). given the following information.

Please show your work.

Year 1 Profits: $3,500 Year 2 Profits: $4,250 Discount Rate: 3.25%

A. Share Price: ________________

B) What is the new share price if you decide that Year 2 profits will be $5,500 and you change your discount rate for all years to 5%?

Share Price: ________________

c) If a company called Styx  is listed on the Dow Jones Industrial Average, and the Dos divisor is .1474, by how much will the Dow change if the price of a share of Styx. increases by $3.00? ________________

2- a. What is the price of a European put option on a non-dividend-paying stock when the stock price is $69, the strike price is $70, the risk-free interest rate is 5% per annum, the historical volatility is 35% per annum, and the time to maturity is six months?

b. WITHOUT using the B-S-M formula, please calculate the call option price on the same stock with $70 strike price and a time to maturity of 6 months? Explain how and show the process. (Simply showing a number without explanation and process is not a valid answer.)

c. For the same put option, if the actual market trading price is $5, what is the implied volatility?

Calculate the approximate modified duration for a 10-year, 5% annual-pay bond priced at 106.84307 percent of par for a 5 basis point change in the yield to maturity. Group of answer choices

A. 7.602

B. 7.981

C. 7.853

Your firm is evaluating a new $725,000 investment opportunity with a 16% required return. You expect to sell 3,500 units per year at $50 net cash flow each for the next 8 years. Suppose that after one year, you will know more about demand and be able to revise your estimate of future unit sales based on sales you observe for year 1. Further, suppose that the project can be dismantled and sold to net $650,000 at that time.

a. What is the minimum level of unit sales for year 1 below which would it make sense to abandon the project?

b. If the original expectation of 3,500 unit sales is the average of two equally likely outcomes (3,000 units or 4,000 units), what is the value of the project, including the option to abandon at the end of the first year?

An underwriting firm such as Morgan Stanley or Goldman Sachs serves as the quarterback in an initial public offering (IPO). Its functions include providing advice to the issuing company (the issuer), underwriting the issue, and marketing the issue. Explain what those functions entail and, if you were the CFO of the issuing company, how you would assess the performance of the underwriting firm in carrying out its job?

Its an excel problem. Screenshots and actual work in excel is appreciated.

Suppose a company is about to start the following project, where all the dollar figures are in thousands of dollars. In year 0, the project requires a fixed cost of $12,000. The fixed costs is depreciated on the straight-line basis over five years, and there is a salvage value of $1,500 in year 5. The sales generated in years 1-5 are estimated to be 2,500 units, 3,200 units, 5,100 units, 3,400 units and 1,200 units. The costs of capital in year 1 is forecast to be 8.5% and decreases linearly by 0.2% for years 2 to 5, ending with 7.7% in year 5. The tax rate is forecast to be a constant 35.0%. Sales revenue per unit is forecast to be $8.50. Variable cost per unit is forecast to be $6.30. What is the project NPV? Develo­p your financial spreadsheet model with frozen panes for detailed calculations and name the worksheet “Project NPV”.