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Masterson, Inc., has 4.1 million shares of common stock outstanding. The current share price is $84, and the book value per share is $11. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, has a coupon rate of 5.1 percent, and sells for 98 percent of par. The second issue has a face value of $50 million, has a coupon rate of 5.60 percent, and sells for 108 percent of par. The first issue matures in 20 years, the second in 12 years. The most recent dividend was $3.95 and the dividend growth rate is 5 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 21 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
In: Finance
Use the data for Starbucks (SBUX) and Google (GOOG)
| Date | SBUX | Dividend | GOOG | Dividend | |
| 2011-11-14 | $43.64 | $0.00 | $613.00 | $0.00 | |
| 2012-02-06 | $48.29 | $0.17 | $609.09 | $0.00 | |
| 2012-05-07 | $55.48 | $0.17 | $607.55 | $0.00 | |
| 2012-08-06 | $43.48 | $0.17 | $642.82 | $0.00 | |
| 2012-12-13 | $53.18 | $0.21 | $659.05 | $0.00 |
to answer the following questions:
a. What is the return for SBUX over the period without including its dividends? With the dividends?
b. What is the return for GOOG over the period?
c. If you have
29 %29%
of your portfolio in SBUX and
71 %71%
in GOOG, what was the return on your portfolio excluding dividends?
a. What is the return for SBUX over the period without including its dividends?
The return without the dividends is ______%?
(Round to two decimal places.)
With the dividends?
The return with the dividends is _____% ?
(Round to two decimal places.)
b. What is the return for GOOG over the period?
The return is _____% ?
(Round to two decimal places.)c. If you have
29 % of your portfolio in SBUX and 71 % in GOOG, what was the return on your portfolio excluding dividends?
The return of the portfolio is _____%.
(Round to two decimal places.)
In: Finance
In: Finance
Assignment Details
Today, many companies face budgetary challenges on a continual basis. Two critical aspects that businesses lack are effective control practices and monitoring. Discuss the following in regard to this:
In: Finance
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Jiminy’s Cricket Farm issued a 30-year, 6.3 percent semiannual bond eight years ago. The bond currently sells for 110 percent of its face value. The company’s tax rate is 22 percent. |
| a. |
What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b. | What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| c. | Which is more relevant, the pretax or the aftertax cost of debt? |
In: Finance
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1. It is the end of September and the current AUD/USD exchange rate is 1.9230, the Australian and US three-month interest rates are 6 and 4.5% p.a. respectively. A forecast indicates that the exchange rate at the end of the year will be 1.8750. |
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(a) What would you do on the basis of this information? (b) If the actual exchange rate turns out to be 1.9370, calculate the percentage forecasting error. (c) Is there an error of direction in this forecast? (d) What is the outcome of acting on this forecast? (a) The forecast indicates that the US dollar would depreciate by 2.5%, making it an opportunity to take a short position on the currency. By borrowing US dollars at 4.5% or 1.125% for three months and investing in Australian assets for three months at 1.5%, the expected net return will be 2.875% (the sum of the interest differential and the percentage change in the exchange rate). (d) The exchange rate rose by 0.73%. PLS TELL ME HOW DID THE VALUES OF ANS (A) AND (D) ARRIVED PLS.... I NEED DETAILED WORKINGS PLS |
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| A perpetuity pays $1000 at the end of every month for 11 months of each year. At the end of the 12th month of each year, it pays double that amount. If the effective ANNUAL rate is 10.4%, what is the present value of this perpetual annuity? |
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Firm XYZ expects to earn $6 per share next year. In the next three years, the firm’s ROE is expected to be 12%, 15%, 18%, respectively, and its dividend payout ratio is 90%. After that, the firm's ROE is expected to increase to 25%, and the firm will set the dividend payout ratio = 60%. Assume that the discount rate is 20%. Find the stock price
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| $10,000 is used to purchase an appropriate size annuity that
has level annual payments for 15 years. The price of the annuity is
based on an effective annual rate of 12%. As each payment is
received, it is put into a fund that earns an effective annual rate
of 6.4%. |
| (a) | Determine the accumulated value of the investment at the end of 15 years. |
| (b) | If the $10,000 were put into a fund that was to produce the same final value after 15 years, what annual effective rate would that fund have to offer? |
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Quantitative Problem 1: Hubbard Industries just
paid a common dividend, D0, of $2.00. It expects to grow
at a constant rate of 2% per year. If investors require a 9% return
on equity, what is the current price of Hubbard's common stock?
Round your answer to the nearest cent. Do not round intermediate
calculations.
$ per share?
Quantitative Problem 2: Carlysle Corporation
has perpetual preferred stock outstanding that pays a constant
annual dividend of $1.10 at the end of each year. If investors
require an 8% return on the preferred stock, what is the price of
the firm's perpetual preferred stock? Round your answer to the
nearest cent. Do not round intermediate calculations.
$ per share?
Quantitative Problem 3: Assume today is
December 31, 2013. Imagine Works Inc. just paid a dividend of $1.15
per share at the end of 2013. The dividend is expected to grow at
12% per year for 3 years, after which time it is expected to grow
at a constant rate of 5% annually. The company's cost of equity
(rs) is 9%. Using the dividend growth model (allowing
for nonconstant growth), what should be the price of the company's
stock today (December 31, 2013)? Round your answer to the nearest
cent. Do not round intermediate calculations.
$ per share?
I need help with these three problems.
In: Finance
Discuss the four capital ratios depository institutions must calculate and monitor under Basel III.
In: Finance
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You have $85,000 on deposit with no outstanding checks or uncleared deposits. One day you write a check for $21,600. |
| a. | Does this create a disbursement or collection float? |
| b. | What is your available balance? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| c. | What is your book balance? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
In: Finance
What is the value of a 28-year, 4.3% coupon rate, $1,000 face value bond with annual coupon payments, if similar bonds (same maturity, same risk profile) are trading at a yield to maturity of 7.6%? Round to the nearest cent.
In: Finance
In: Finance