You work for Australia Wide Taxations Solutions—a company of 1,500 employees offering taxation services in different cities across the country. The company offers five services: personal taxation, small business taxation, corporate services, personal wealth creation and corporate asset management.

It is working in a highly regulated and legislated industry.

You have been asked to work with the team conducting a risk assessment for the entire organisation.

How will you identify the risk management scope—what things do you need to look at? What challenges does a scope of this size pose and how would you approach the risk assessment process? (350–400 words)

Calculation of individual costs and WACC   Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following​ weights: 35​% ​long-term debt, 15​% preferred​ stock, and 50​% common stock equity​ (retained earnings, new common​ stock, or​ both). The​ firm's tax rate is 26​%. Debt The firm can sell for ​$1015 a 17​-year, ​$1000​-par-value bond paying annual interest at a 11.00​% coupon rate. A flotation cost of 2.5​% of the par value is required. Preferred stock  7.00​% ​(annual dividend) preferred stock having a par value of ​$100 can be sold for ​$94. An additional fee of ​$5 per share must be paid to the underwriters.

Common stock  The​ firm's common stock is currently selling for ​$70 per share. The stock has paid a dividend that has gradually increased for many​ years, rising from ​$2.75 ten years ago to the ​$5.16 dividend​ payment, Upper D 0​, that the company just recently made. If the company wants to issue new new common​ stock, it will sell them ​$2.50 below the current market price to attract​ investors, and the company will pay ​$2.50 per share in flotation costs. 

  a.  Calculate the​ after-tax cost of debt.

b.  Calculate the cost of preferred stock.

c.  Calculate the cost of common stock​ (both retained earnings and new common​ stock).

d.  Calculate the WACC for Dillon Labs.

acme Services’ CFO is considering whether to take on a new project that has average risk. She has collected the following information: • The company has outstanding bonds that mature in 15 years. The bonds have a face value of $1,000, an annual coupon of 7.5%, and sell in the market today for $1150. There are 15,000 bonds outstanding.
• The risk-free rate is 3%
. • The market risk premium is 5%
. • The stock’s beta is 0.9
. • The company’s tax rate is 35%.
• The company has 100,000 shares of preferred stock with a par value of $100. These shares are currently trading at $73, and pay an annual dividend of $3.50.
• The company also has 2,250,000 common shares trading at $15. These shares last paid an annual dividend of $0.33.
What is Acme's...
a. weight of common shares
b. before tax cost of acmes debt
c. preferred shares
d. value of debt
e. weight of debt
f. firm value

At $80 , a firm can sell 4,715 stereo earphones (3.5 mm for android). At this price, elasticity is estimated at 2.2. What is the change in total revenue (+ or -) if the firm drops price by 12%? Round your answer to the nearest dollar.

At $171, a firm can sell 19,195 stereo earphones (3.5 mm for android). These are premium earphones, guaranteed for 5 years. At this price, elasticity is estimated at 0.4. What is the change in total revenue (+ or -) if the firm drops price by 10%?

When looking at the macro economy right now, the Federal Reserve System seems to be taking the position that a recession is unlikely at least for the next year. Given the seven companies listed in the first assignment (i.e., AAPL, ADP, AMZN, GOOGL, JPM, MCD, and WEN), list three firms most likely to benefit from an upturn in economic activity. Please provide a short justification for each firm you select.

QUESTION 41 The current stock price for a company is $48 per share, and there are 4 million shares outstanding. The beta for this firms stock is 1.3, the risk-free rate is 4.7, and the expected market risk premium is 6.4%. This firm also has 230,000 bonds outstanding, which pay interest semiannually. These bonds have a coupon interest rate of 7%, 17 years to maturity, a face value of $1,000, and an annual yield to maturity of 7.1%. If the corporate tax rate is 35%, what is the Weighted Average Cost of Capital (WACC) for this firm? (Answer to the nearest hundredth of a percent, but do not use a percent sign).

]

a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter “0” if there is no profit or return from not exercising the option. Round your answer to 2 decimal places.)

b. Now suppose that time has passed and the stocks’ prices have changed as indicated in the table below. Recalculate your answers to part a.

The Harrington Corporation is considering investing in a project that will incur an initial investment of $2,000,000.The project has a useful life of 5 years. The project's projected free after tax cash flow is $650,000 per year throughout the life of the projectt. The firm requires a rate of return for similar risk project at 18%. Based on the above information compute the following and determine each criteria f the firm should accept the project.

The NPV

The IRR

Payback period, the firm's minimum acceptable payback period is 3.5 years.

Discounted Payback Period. Minimum acceptable DPP is 4.0 years.

Compute the Profitability Index for the investment. What purpose does Profitability Index serve in capital budgeting processes?

Individuals performing ratio analysis include (1) banks evaluating potential loan applications from small businesses, (2) investment analysts evaluating the investment quality of a firm’s stock, and (3) internal management, assessing the firm’s current strengths and weaknesses. Select one of the three parties above, and for that party, identify which of the five ratio groups (liquidity, activity, debt, profitability, or market) would be of most value and which would probably be of least value. Explain the reasons behind your choices.

Include a source please and a min of 150 words (:

Problem 9-7
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, 2015, is shown here (millions of dollars):

Sales for 2015 were $375 million and net income for the year was $11.25 million, so the firm's profit margin was 3.0%. Upton paid dividends of $4.5 million to common stockholders, so its payout ratio was 40%. Its tax rate is 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 2016. Do not round intermediate calculations.

1. If sales are projected to increase by $40 million, or 10.67%, during 2016, 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
   
2. 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.
   _____%
   
3. Use the forecasted financial statement method to forecast Upton's balance sheet for December 31, 2016. 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 2016 as they were in 2015. What is the amount of the line of credit reported on the 2016 forecasted balance sheets? (Hint: You don't need to forecast the income statements because you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2016 addition to retained earnings for the balance sheet.) Round your answers to two decimal places. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000.

   Upton Computers Pro Forma Balance Sheet December 31, 2016 (Millions of Dollars)
   Cash	$____
   Receivables	$  ____
   Inventories	$  ____
   Total current assets	$  ____
   Net fixed assets	$  ____
   Total assets	$  ____
   Accounts payable	$  ____
   Notes payable	$  ____
   Accruals	$  ____
   Total current liabilities	$  ____
   Mortgage loan	$  ____
   Common stock	$  ____
   Retained earnings	$  ____
   Total liabilities and equity	$  ____

answer all the blanks ____  and plz show your steps

Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $1.00 coming 3 years from today. The dividend should grow rapidly-at a rate of 34% per year-during Years 4 and 5; but after Year 5, growth should be a constant 9% per year. If the required return on Computech is 15%, what is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate calculations.

Carnes Cosmetics Co.'s stock price is $79.38, and it recently paid a $3.00 dividend. This dividend is expected to grow by 22% for the next 3 years, then grow forever at a constant rate, g; and rs = 16%. At what constant rate is the stock expected to grow after Year 3? Round your answer to two decimal places. Do not round your intermediate calculations.

Calculate the option price using the following information:

Group of answer choices

$3.05

$3.65

$4.32

$5.02

Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1,640,000; the new one will cost, $1,975,000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about $420,000 after five years. The old computer is being depreciated at a rate of $344,000 per year. It will be completely written off in three years. If we don’t replace it now, we will have to replace it in two years. We can sell it now for $540,000; in two years, it will probably be worth $156,000. The new machine will save us $368,000 per year in operating costs. The tax rate is 24 percent, and the discount rate is 11 percent.

a-1. Calculate the EAC for the the old computer and the new computer. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

a-2. What is the NPV of the decision to replace the computer now? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Carrington would invest in software and some hardware upgrades that will allow them to better analyze the traffic coming in to their website. Total acquisition costs for this option are estimated to be $400,000. This improved analytics capability is expected to lead to increased revenue of $80,000 in year 1, $120,000 in year 2, $250,000 in year 3, $350,000 in year 4, and $500,000 in year 5. The estimated cost of this obtaining this revenue will be 20% per revenue dollar related to sales staff that will analyze this data and use it to generate new client relationships. Carrington will also incur fixed cost of $10,000 per year related to software updates and hardware maintenance. Carrington will set aside $250,000 in working capital for this project and this capital will be recovered at the end of 5 yrs. The salvage value of the new equipment will be $9,000 at the end of 5 yrs. Carrington uses a 10% hurdle rate to evaluate all projects, Acquisition costs qualify for modified accelerated depreciation of 50,30, and 20% in the first three yrs, Being profitable company income would be taxed at Carrington's tax rate of 30%, and all dollar values referenced in this case are in nominal dollars so for analysis ignore the effect of inflation.

1. Calculate the payback period, internal rate of return, and NPV.

2. The data analytics program pays off a lot faster than expected. Revenue is projected to be $200,000 in yr 1, $250,000 in yr 2, $250,000 in yr 3, $300,000 in yr4, and $300,000 in yr 5.

3.A great tax plan. Congress is proposing a new corporate tax plan that reduces the federal tax rate that Carrington pays from 30% to 20%. However, this tax plan would also do away with MACRS and replace it with straight line depreciation for tax purposes ( over 5 yrs).

a. Using the original estimates for your designated option, estimate the effect of this tax plan on NPV.

b. Next, given the uncertainty related to the effect of the proposed tax plan on future business, use a 14% hurdle rate instead of the 10% hurdle rate used before in estimating the effect of the plan (i.e just redo 4A).

4. What are some qualitative concerns related to accepting this designated option. Discuss and list at least 2. Provide why each would be considered an advantage or disadvantage.