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Examine the concept of the time value of money in relation to corporate managers. Propose two (2) methods in which time value of money can help corporate managers in general.
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Consider the following information:
| Portfolio | Expected Return | Beta | |
| Risk-free | 7 | % | 0 |
| Market | 10.4 | 1.0 | |
| A | 9.0 | 1.5 | |
a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.5. (Round your answer to 2 decimal places.)
Return???
b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Beta???
c. If the simple CAPM is valid, is the situation above possible?
Yes or No???
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Gonyo Inc., which produces and sells a single product, has provided the following contribution format income statement for December appears below:
Sales (5,000 units) $ 305,000
Variable expenses 150,000
Contribution margin 155,000
Fixed expenses 104,400
Net operating income $ 50,600
Required: Redo the company's contribution format income statement assuming that the company sells 5,200 units.
What is the Net operating income:
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P5.1 Your portfolio had the values in the following table for the four-year period listed. Calculate your average return over the four-year period.
Year Beginning Value Ending Value
2007 $50,000.00 $55,000.00
2008 $55,000.00 $58,000.00
2009 $58,000.00 $65,000.00
2010 $65,000.00 $70,000.00
P5.2 Using your data from Problem 5.1 above, calculate the portfolio standard deviation.
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Garlington Technologies Inc.'s 2016 financial statements are shown below:
Balance Sheet as of December 31, 2016
Cash $ 180,000
Accounts payable $ 360,000
Receivables 360,000
Notes payable 156,000
Inventories 720,000
Line of credit 0
Total current assets $1,260,000
Accruals 180,000
Fixed assets 1,440,000
Total current liabilities $ 696,000
Common stock 1,800,000
Retained earnings 204,000
Total assets $2,700,000
Total liabilities and equity $2,700,000
Income Statement for December 31, 2016
Sales $3,600,000
Operating costs 3,279,720
EBIT $ 320,280
Interest 18,280
Pre-tax earnings $ 302,000
Taxes (40%) 120,800
Net income 181,200
Dividends $ 108,000
Suppose that in 2017 sales increase by 15% over 2016 sales and that 2017 dividends will increase to $198,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2016. Use an interest rate of 8%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all new-debt will be in the form of a line of credit. Round your answers to the nearest dollar. Do not round intermediate calculations.
Garlington Technologies Inc. Pro Forma Income Statement December 31, 2017
Sales $
Operating costs $
EBIT $
Interest $
Pre-tax earnings $
Taxes (40%) $
Net income $
Dividends: $
Addition to RE: $
Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2017
Cash $
Receivables $
Inventories $
Total current assets $
Fixed assets $
Total assets $
Accounts payable $
Notes payable $
Accruals $
Total current liabilities $
Common stock $
Retained earnings $
Total liabilities and equity $
In: Finance
What can behavioural finance teach us about finance?
you have to edit the attached research paper and prepare a wiki on the same topic in your own words.
What can behavioural finance.pdf
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|
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 21 percent for the next 3 years, with the growth rate falling off to a constant 4 percent thereafter. |
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If the required return is 11 percent and the company just paid a $2.70 dividend. what is the current share price? |
In: Finance
What is the goal of Corporate Finance? Which 3
questions can be thought of
as the study of Corporate Finance?
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Bond X is noncallable and has 20 years to maturity, a 9% annual coupon, and a $1,000 par value. Your required return on Bond X is 12%; if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5 years, the yield to maturity on a 15-year bond with similar risk will be 10%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.) Do not round intermediate calculations. Round your answer to the nearest cent.
PLease help asap!
Thank you
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1. What is beta?
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what are the price and duration of 5 year , 7% coupon, semi-annual bond if market interest rate is 4%
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Here are some important figures from the budget of Nashville Nougats, Inc., for the second quarter of 2015: |
| April | May | June | |||||||
| Credit sales | $ | 322,000 | $ | 302,000 | $ | 362,000 | |||
| Credit purchases | 130,000 | 153,000 | 178,000 | ||||||
| Cash disbursements | |||||||||
| Wages, taxes, and expenses | 44,200 | 11,700 | 63,200 | ||||||
| Interest | 11,200 | 11,200 | 11,200 | ||||||
| Equipment purchases | 82,000 | 154,000 | 0 | ||||||
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The company predicts that 5 percent of its credit sales will never be collected, 40 percent of its sales will be collected in the month of the sale, and the remaining 55 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. |
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In March 2015, credit sales were $192,000 and credit purchases were $132,000. Using this information, complete the following cash budget: (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.) |
| April | May | June | |||||
| Beginning cash balance | $ | 125,000 | $ | $ | |||
| Cash receipts | |||||||
| Cash collections from credit sales | |||||||
| Total cash available | $ | $ | $ | ||||
| Cash disbursements | |||||||
| Purchases | $ | $ | $ | ||||
| Wages, taxes, and expenses | |||||||
| Interest | |||||||
| Equipment purchases | |||||||
| Total cash disbursements | $ | $ | $ | ||||
| Ending cash balance | $ | $ | $ | ||||
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