Is there any industry where it would always make sense to keep excess inventory levels on hand? min 200 words

In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the “terminal” stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.31. The dividends are expected to grow at 16 percent over the next five years. The company has a payout ratio of 30 percent and a benchmark PE of 19. The required return is 14 percent.
    
What are the projected dividends for each of the next five years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g.,32.16.)
  

  
What is the EPS in five years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)
  
EPS in 5 years            $
  
What is the target stock price in five years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)
  
Stock price in 5 years            $
  
What is the stock price today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)
  
Stock price today            $

Big Sky Mining Company must install $1.5 million of new machinery in its Nevada mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the machinery. Assume that the following facts apply:

1. The machinery falls into the MACRS 3-year class. (The depreciation rates for Year 1 through Year 4 are equal to 0.3333, 0.4445, 0.1481, and 0.0741.)
2. Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance.
3. The firm's tax rate is 25%.
4. The loan would have an interest rate of 13%. It would be nonamortizing, with only interest paid at the end of each year for four years and the principal repaid at Year 4.
5. The lease terms call for $410,000 payments at the end of each of the next 4 years.
6. Big Sky Mining has no use for the machine beyond the expiration of the lease, and the machine has an estimated residual value of $250,000 at the end of the 4th year.

1. What is the cost of owning? Enter your answer as a positive value. Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

   $   

2. What is the cost of leasing? Enter your answer as a positive value. Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

   $   

3. What is the NAL of the lease? Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

   $   

8. You are told today that you’ll inherit a castle from your uncle in 5 years. You’ll need to

pay a property tax of $500,000 on the castle in year 6. Then the property tax will go up

each year by 1%. You and your descendant are going to pay for the property tax each year

forever. Suppose the interest rate is 10% per year. If you want to set aside enough money

today to be able to make all the future property tax payment, how much money do you

need?

EOC 2.15

Suppose we observe the following rates:

One-year spot rate = 10%

Two-year spot rate = 14%

Expected one-year rate one year from now = 18%

If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity

premium for year 2?

In August 2019, the Business Roundtable changed the main purpose of a corporation from “to create value for investors” to “to benefit all stakeholder – customers, employees, suppliers, communities and shareholders.” What, if any, benefit do you see in this and how can you foresee this impacting your life?

1) What will be your monthly payment on a $480,000 15 and a 30 yr mortgage if the rate is 3.50 % for people with good credit and 10.5% for people with bad credit 4 calculations? A) Also, how much interest will you pay over the life of the 4 loans you just calculated? (The mortgage is $480,000 (not the price of the house) you may have to adjust a bank rate.com default of 20% down) B) Why would someone finance a house with a 10 year interest only loan (site 3 reasons)?

Appalachian Bank offers you a $135,000, 9-year term loan at 7.5 percent annual interest. What will your annual loan payment be? Semi-annual compounding.

1. Your portfolio consists of 1,000 shares of stock A and 1,000 shares of stock B. At today's market open their respective prices per share are $7.50 and $21. What are their respective weights in the portfolio at today's market open prices? (rounded to two decimals).

   		They have equal weights
   		0.40 and 0.60
   		0.35 and 0.65
   		0.26 and 0.74.

1 points   

QUESTION 32

1. What is your portfolio's beta if stock A's beta is 1.8 and that of B is 0.4.

   		0.76
   		1.10
   		1.00
   		0.9
   		0.86

Based on the CAPM what is the 1-year expected return on stock A, if the risk-free rate is 1% and the expected return on the market is 12%. ?

Given today's open price, what is the expected 1-year return on stock B, if it does not pay dividends, and if you expect that one-year hence the stock will sell for $23.0?

1. Based on the CAPM, stock A is overpriced at today's market open.

   		TRUE
   		FALSE.

   Based on the CAPM stock B is overpriced at today's market open.

   		TRUE
   		FALSE.

   Based on the CAPM what should be the expected return on your portfolio?

   		12.89%
   		11.46%
   		8.99%
   		9.87%
   		9.36%

Diversification is the most effectivewhen the correlation coefficient between two assets’ return is _________ .

     A) positive

     B) negative

     C) +1

     D) 0

     E) -1

Based on investors’ relative degrees of risk aversion,

     A) investors will hold varying amounts of the risky asset in their portfolios.

     B) all investors will have the same portfolio asset allocations.

     C) investors will hold varying amounts of the risk-free asset in their portfolios.

     D) A and C.

     E) none of the above.

Consider a 5.00 percent TIPS with an issue CPI reference of 203.6. The bond is purchased at the beginning of the year (after the interest payment) when the CPI was 211.5. For the interest payment in the middle of the year, the CPI was 213.1. Now, at the end of the year, the CPI is 217.6 and the interest payment has been made.

What is the total return of the TIPS in dollars? Round your final answer to 2 decimal places

What is the total return of the TIPS in percentage? Round your final answer to 2 decimal places.

One year​ ago, your company purchased a machine used in manufacturing for $ 105,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $ 165,000 today. It will be depreciated on a​ straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin​ (revenues minus operating expenses other than​ depreciation) of $ 55,000 per year for the next 10 years. The current machine is expected to produce a gross margin of $ 24,000 per year. The current machine is being depreciated on a​ straight-line basis over a useful life of 11​ years, and has no salvage​ value, so depreciation expense for the current machine is $ 9,545 per year. The market value today of the current machine is $ 45,000. Your​ company's tax rate is 40 %​, and the opportunity cost of capital for this type of equipment is 12 %.

Should your company replace its​ year-old machine?

The NPV of replacing the​ year-old machine is ​$_____. ​(Round to the nearest​ dollar.) Should your company replace its​ year-old machine?  ​(Select the best choice​ below.)

Yes, there is a profit OR No, there is a loss

Question:

A corporate bond with a coupon rate of 6.8 percent has 14 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 7.5 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate discount rate will be 8.8 percent. (Assume interest payments are semiannual.)

What will be the change in the bond's price in dollars? Round your final answer to 2 decimal places.

What will be the change in the percentage? Round your final answer to 2 decimal places.

Scenario: As the administrator of a small privately owned not-for-profit hospital that has been seeing a significant increase in patient volume, it has been determined that another wing should be added to accommodate the increase in volume. However, there is not enough cash in reserves to finance the project.

You have been tasked with planning how the capital required for the project can be raised. address the following prompts, citing four to six scholarly sources to support your claims: Capital needs can be met either through equity or debt financing.

Explain the difference between the two and which financing would be appropriate and why, considering that this is a private, not-for-profit hospital.

Explain the term working capital and how it is related to debt financing for capital expenditures.

Discuss the importance of a cash budget and how it can be used to assess the financial viability of this capital expenditure.

Problem 6-07

The following are monthly percentage price changes for four market indexes.

Compute the following.

1. Average monthly rate of return for each index. Round your answers to five decimal places.

   DJIA:

   S&P 500:

   Russell 2000:

   Nikkei:

2. Standard deviation for each index. Do not round intermediate calculations. Round your answers to four decimal places.

   DJIA:

   S&P 500:

   Russell 2000:

   Nikkei:

3. Covariance between the rates of return for the following indexes. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to six decimal places.

   Covariance (DJIA, S&P 500):

   Covariance (S&P 500, Russell 2000):

   Covariance (S&P 500, Nikkei):

   Covariance (Russell 2000, Nikkei):

4. The correlation coefficients for the same four combinations. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to four decimal places.

   Correlation (DJIA, S&P 500):

   Correlation (S&P 500, Russell 2000):

   Correlation (S&P 500, Nikkei):

   Correlation (Russell 2000, Nikkei):

5. Using the unrounded answers from parts (a), (b), and (d), calculate the expected return and standard deviation of a portfolio consisting of equal parts of (1) the S&P and the Russell 2000 and (2) the S&P and the Nikkei. Do not round intermediate calculations. Round your answers to five decimal places.

   Expected return (S&P 500 and Russell 2000):

   Standard deviation (S&P 500 and Russell 2000):

   Expected return (S&P 500 and Nikkei):

   Standard deviation (S&P 500 and Nikkei):

   Since S&P 500 and Russell 2000 have a strong (Select-negative, positive) correlation, meaningful reduction in risk (Select-is not observed, is observed) if they are combined.

   Since S&P 500 and Nikkei have a strong (Select-negative, positive) correlation, meaningful reduction in risk (Select-is not observed, is observed) if they are combined.