Seether Co. wants to issue new 19-year bonds for some much-needed expansion projects. The company currently has 6.4 percent coupon bonds on the market that sell for $780.37, make semiannual payments, and mature in 19 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?

1. -8.47%
2. -9.25%
3. 8.69%
4. -8.45%
5. 9.54%

If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Dave?

1. -30.34%
2. -43.56%
3. 34.73%
4. -30.32%
5. 53.22%

If rates were to suddenly fall by 5 percent instead, what would the percentage change in the price of Bond Sam be then?

1. 9.52%
2. 8.69%
3. 9.50%
4. -8.42%
5. 9.57%

If rates were to suddenly fall by 5 percent instead, what would the percentage change in the price of Bond Dave be then?

1. 53.20%
2. 34.73%
3. 53.18%
4. -30.29%
5. 53.25%

IBM's income, assets, and stock price have been growing at an annual rate of 20% and are expected to continue to grow at this rate for 2 more years. They just paid a dividend of $2.00 and will continue to pay at the supernormal growth rate (20%) for the next two years. After that, dividends are expected to grow at the firm's constant growth rate of 8%. The required rate of return is 18%. The present value of the stock is a. $26.44 b. $23.03 c. $33.15 d. $40.01 e. $36.00

10. In the previous question, if IBM is currently selling for $40.00, then the stock is a. undervalued by $13.56 b. overvalued by $13.56 c. correctly valued d. overvalued by $16.97 e. undervalued by $16.97

Problem 12-07

Forecasted Statements and Ratios

Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Upton's balance sheet as of December 31, 2016, is shown here (millions of dollars):

Cash $ 3.5 Accounts payable $ 9.0

Receivables 26.0 Notes payable 18.0

Inventories 58.0 Line of credit 0

Total current assets $ 87.5 Accruals 8.5

Net fixed assets 35.0 Total current liabilities $ 35.5

Mortgage loan 6.0

Common stock 15.0

Retained earnings 66.0

Total assets $122.5 Total liabilities and equity $122.5

Sales for 2016 were $250 million and net income for the year was $7.5 million, so the firm's profit margin was 3.0%. Upton paid dividends of $3 million to common stockholders, so its payout ratio was 40%. Its tax rate was 40%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2017. Do not round intermediate calculations.

a. If sales are projected to increase by $40 million, or 16%, during 2017, use the AFN equation to determine Upton's projected external capital requirements. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ million

b. Using the AFN equation, determine Upton's self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? Round your answer to two decimal places. %

c. Use the forecasted financial statement method to forecast Upton's balance sheet for December 31, 2017. Assume that all additional external capital is raised as a line of credit at the end of the year and is reflected (because the debt is added at the end of the year, there will be no additional interest expense due to the new debt). Assume Upton's profit margin and dividend payout ratio will be the same in 2017 as they were in 2016. What is the amount of the line of credit reported on the 2017 forecasted balance sheets? (Hint: You don't need to forecast the income statements because the line of credit is taken out on last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2017 addition to retained earnings for the balance sheet without actually constructing a full income statement.) Round your answers to the nearest cent.

Upton Computers

Pro Forma Balance Sheet

December 31, 2017

(Millions of Dollars)

Cash $

Receivables $

Inventories $

Total current assets $

Net fixed assets $

Total assets $

Accounts payable $

Notes payable $

Line of credit $

Accruals $

Total current liabilities $

Mortgage loan $

Common stock $

Retained earnings $

Total liabilities and equity $

Which are the following may a military Tech spared the duck if they do not itemize How does the military thrift savings plan different from the uniform service retirement plan

If a soup kitchen has marginal revenues of $3.00 per meal delivered, marginal expenses of $4.00 per meal, $50,000 of annual fixed costs and annual donations of $150,000, it will...

Select one:

a. never reach its break-even quantity.

b. need additional donations of $1 per meal to reach its break-even quantity.

c. reach its break-even quantity when it serves 100,000 meals.

please i need answer asap thank u

You own 100 acres of timberland,with young timber worth 20,000 if logged today this represent 500 cords of wood at $40 per cord. after logging the land can be sold today for 10,000($100 per acre). the opportunity cost of capital is 10%. you have made the following estimates: a) the price of a cord of wood will increase by 5% per year? b) the price of land will increase by 3% per year. c) the yearly growth rate of the cords of wood on your land are :

years 1-2: 15%:

year 3-4 :10%:

year 5-8 : 5%

years thereafter 2% please find the present value of the optimal decision.

Problem 12-09
Financing Deficit

Garlington Technologies Inc.'s 2016 financial statements are shown below:

Balance Sheet as of December 31, 2016

Income Statement for December 31, 2016

Suppose that in 2017 sales increase by 20% over 2016 sales and that 2017 dividends will increase to $170,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2016. Use an interest rate of 10%, 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.

rom Rubin, Problem 13.3: A 120. MW coal

plant wants to add a SOX emissions control system to reduce its emissions. The emission

control system has a capital cost of $815 per kW and reduces SOX emissions by 98% to

0.0918 kg/MWh. Assume the life of the emission control system is 20 years and the power

plant produces 650 GWh/y.

​

a)What is the annualized cost of this system in dollars per year if the discount rate (interest

rate) is 7.0 percent/year? What if the discount rate is 4.0 percent/year?

b)What is the cost per 1.0399 x 10^4kWh of electricity usage (the average annual U.S.

residential electricity consumption in 2017 according to the EIA) at each of the discount

rates specified in part (a)?

c) What is the cost per metric ton of SOXremoved?

(1 metric ton = 1,000 kg = 10^6g)

A firm has the following project (assume that the expenditures are at the end of the year in question):
1) The land will be acquired for $ 500,000 in year zero
2) The first year, $ 1 million will be spent on the construction of the plant.
3) The equipment will be purchased on year 2 at a cost of $1.5 million.
4) The third year, $ 500,000 will be disbursed to start operating the plant.
5) The plant and equipment will depreciate in a straight line for the next 10 years, beginning year 4 (project ends in year 13). The equipment and the physical construction will be worthless after these 10 years, but the land can be sold at its original cost, when the plant is closed.
6) The annual income (during the 10 years, that is, from the 4th to the 13th year) is 2 million.
7) The annual fixed cost (excluding depreciation) will be $ 200,000
8) The variable costs are annually of $ 300,000, assuming that the plant operates at its maximum capacity during the 10 years
9) The tax rate will be 50 percent as it will be treated as if it were a private business of the state itself (i.e. treat the state as a company, that is, pure neoliberalism)

Calculate the Net Present Value of the Project, if the discount rate is 14%.

Use this scenario "How to turn a movie theater into a hotel franchise." Create of a operations plan that shows how the product or service will be delivered

It appears that George is running a profitable business. George is aware you are in an MBA Managerial Finance class and comes to you for advice on his working capital practices. More specifically George asks you to do the following:

View the following video: http://searchcenter.intelecomonline.net/playClipDirect.aspx?id=4870EEC7664070BB9D6744FDA7325EE44F45E0E47862343D60FAA8E3325D1A83C46D5C6FAB3D01A758FA30144214BB3D

Describe his working capital practices, including his methods of capital budgeting analysis techniques.

Analyze the potential pitfalls in his capital budgeting practices that George should be aware of.

Develop a simple statement of cash flows for George’s Trains using any information gleaned from the video. What areas of improvement do you recommend and why?