Halliford Corporation expects to have earnings this coming year of $ 3.21 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two​ years, the firm will retain 53 % 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 21.48 % 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 11.3 % ​, 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.)

What is the duration of a 2 year zero-coupon bond that is yielding 11.5 percentage? use $1000 as the face value

A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S -$1,000 $882.86 $240 $15 $5 Project L -$1,000 $0 $260 $420 $740.50 The company's WACC is 9.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.

Conduct a search for evaluating strategic plans. Review articles or websites for information on evaluating an organization’s strategic plan. Explain how you would evaluate a strategic plan to know whether it needed to be modified. What quality controls would you instill?

Compute the IRR static for Project E. The appropriate cost of capital is 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is four years. (Do not round intermediate calculations and round your final answer to 2 decimal places. If the project does not pay back, then enter a "0" (zero).)

Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent and the maximum allowable payback period is three years. (If the project never pays back, then enter a "0" (zero).)

Growth​ Company's current share price is $ 19.85 and it is expected to pay a $ 1.05 dividend per share next year. After​ that, the​ firm's dividends are expected to grow at a rate of 3.7 % per year. a. What is an estimate of Growth​ Company's cost of​ equity? b. Growth Company also has preferred stock outstanding that pays a $ 2.30 per share fixed dividend. If this stock is currently priced at $ 28.30​, what is Growth​ Company's cost of preferred​ stock? c. Growth Company has existing debt issued three years ago with a coupon rate of 5.9 %. The firm just issued new debt at par with a coupon rate of 6.5 %. What is Growth​ Company's cost of​ debt? d. Growth Company has 5.2 million common shares outstanding and 1.4 million preferred shares​ outstanding, and its equity has a total book value of $ 49.9 million. Its liabilities have a market value of $ 19.6 million. If Growth​ Company's common and preferred shares are priced as in parts ​(a​) and ​(b​), what is the market value of Growth​ Company's assets? e. Growth Company faces a 35 % tax rate. Given the information in parts ​(a​) through ​(d​), and your answers to those​ problems, what is Growth​ Company's WACC? ​ Note: Assume that the firm will always be able to utilize its full interest tax shield.

7. A firm earns $800,000 per year, has 5% cost of debt, is worth $5 million, and has $2 million in equity and $3 million in debt. It’s considering a project with a 75 percent chance of earning $2 million, but a 25 percent chance of failing and going bankrupt. What is the expected return of this investment for the bond holders and equity holders?

Net Present Value Method, Internal Rate of Return Method, and Analysis

The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows:

The radio station requires an investment of $983,820, while the TV station requires an investment of $2,055,600. No residual value is expected from either project.

Required:

1a. Compute the net present value for each project. Use a rate of 10% and the present value of an annuity of $1 in the table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest whole dollar.

1b. Compute a present value index for each project. If required, round your answers to two decimal places.

2. Determine the internal rate of return for each project by (a) computing a present value factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent.

What is the management fee (1) on a per available room basis and (2) as a percentage of total revenue for a 255-room hotel located in California that had an occupancy level of 62%, ADR of $84.53, a room revenue to total revenue % of 56.4%, and a gross operating profit % of 24.8%? The management fee agreement stipulated that the company would receive 3% of gross revenue, and 10% of gross operating profit.

   Please calculate annual room revenue (round to two decimal places) $ ___

Annual total revenue (round to two decimal places) $ ___

GOP (round to two decimal places) $ ____

  Mgmt fee base fee (round to two decimal places) $ ___

  Mgmt fee incentive fee (round to two decimal places) $ ___

      Total mgmt fee (round to whole number) $ ___

Mgmt fee on PAR basis (round to two decimal places) $ ___ PAR/yea

Mgmt fee as % of total revenue (round to two decimal places) ___%

Explain correct and incorrect ways to use firm guidance.

Alternative Dividend Policies

Boehm Corporation has had stable earnings growth of 8% a year for the past 10 years, and in 2015 Boehm paid dividends of $3.1 million on net income of $20.0 million. However, in 2016 earnings are expected to jump to $36 million, and Boehm plans to invest $14.2 million in a plant expansion. This one-time unusual earnings growth won't be maintained, though, and after 2016 Boehm will return to its previous 8% earnings growth rate. Its target debt ratio is 35%.

1. Calculate Boehm's total dividends for 2016 under each of the following policies:
   1. Its 2016 dividend payment is set to force dividends to grow at the long-run growth rate in earnings. Round your answer to the nearest dollar. Enter your answers in dollars. For example: $2.9 million should be entered as $2,900,000.
      $  
      
   2. It continues the 2015 dividend payout ratio. Round your answer to the nearest dollar. Enter your answers in dollars. For example: $2.9 million should be entered as $2,900,000.
      $  
      
   3. It uses a pure residual policy with all distributions in the form of dividends (35% of the $14.2 million investment is financed with debt). Round your answer to the nearest dollar. Enter your answers in dollars. For example: $2.9 million should be entered as $2,900,000. Enter your answers in dollars. For example: $2.9 million should be entered as $2,900,000.
      $  
      
   4. It employs a regular-dividend-plus-extras policy, with the regular dividend being based on the long-run growth rate and the extra dividend being set according to the residual policy. Round your answer to the nearest dollar. Enter your answers in dollars. For example: $2.9 million should be entered as $2,900,000.
      $  
   
   
2. Which of the preceding policies would you recommend? Restrict your choices to the ones listed.
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