Below is the income statement of a publicly-traded biotech company from 2004 until 2007:

The company’s stock was trading for $2 in 2004 and is now trading for $7. Are investors irrational? Should the stock be sold short? Is it possible for a company in the biotech business to be worth something even though it has no current sales? What can justify the billion-dollar values of technology companies which have yet to earn any profits?

Rossdale Co. stock currently sells for $73.31 per share and has a beta of 1.24. The market risk premium is 6.90 percent and the risk-free rate is 2.82 percent annually. The company just paid a dividend of $4.37 per share, which it has pledged to increase at an annual rate of 3.25 percent indefinitely. What is your best estimate of the company's cost of equity?

Multiple Choice

• 9.13%

• 9.53%

• 7.88%

• 10.39%

• 11.19%

Saint Nick Enterprises has 15,500 shares of common stock outstanding at a price of $59 per share. The company has two bond issues outstanding. The first issue has 7 years to maturity, a par value of $1,000 per bond, and sells for 94 percent of par. The second issue matures in 21 years, has a par value of $2,000 per bond, and sells for 101.5 percent of par. The total face value of the first issue is $150,000, while the total face value of the second issue is $250,000. What is the capital structure weight of debt?

Multiple Choice

• .2737

• .3015

• .3468

• .3733

• .1938

Coriander with a 14% WACC is evaluating two projects for this year’s capital budget. After-tax cash flows, including depreciation are as follows: Year Project A Project B O -$6000 -$18,000 1 $2000 $5,600 2 $2000 $5,600 3 $2000 $5,600 4 $2000 $5,600 5 $2000 $5,600 a. Calculate NPV and IRR for each project b. Assuming the projects are independent which one (s) would you recommend? c. If the projects are mutually exclusive, which would you recommend?

Consider a new product or service that has recently become available for purchase by consumers. To what extent did this product or service possess the “screening” characteristics that are described in the chapter (adding value, providing competitive advantage, etc.)?

The yield to maturity on one-year zero-coupon bonds is currently 7 percent; the YTM on two-year zeroes is 8 percent. The federal government plans to issue a two-year-maturity coupon bond, paying coupons once per year with a coupon rate of 9 percent. The face value of the bond is $100.

1. At what price will the bond sell?
2. What will be the yield to maturity on the bond?
3. If the expectations theory of the yield curve is correct, what is the market expectation of the price that the bond will sell for next year?
4. If the liquidity preference theory is correct and you believe that the liquidity premium is 1 percent, what is the market expectation of the price that the bond will sell for next year?

Please make a sales forecast for an all in one washer and dryer that costs $1020 I have no idea how to do this. Im supposed to create my own numbers because I "made" the product. You can make the numbers up just label it please. It says to put it in a table

The expected pretax return on three stocks is divided between dividends and capital gains in the following way: Stock Expected Dividend Expected Capital Gain A $0 $10 B 5 5 C 10 0 a. If each stock is priced at $200, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 35% (the effective tax rate on dividends received by corporations is 10.5%), and (iii) an individual with an effective tax rate of 15% on dividends and 10% on capital gains? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) b. Suppose that investors pay 50% tax on dividends and 20% tax on capital gains. If stocks are priced to yield an after-tax return of 8%, what would A, B, and C each sell for? Assume the expected dividend is a level perpetuity. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Makai Metals Corporation has 10 million shares of common stock outstanding and 440,000 4 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $48 per share and has a beta of 1.5, and the bonds have 10 years to maturity and sell for 115 percent of par. The market risk premium is 8.8 percent, T-bills are yielding 5 percent, and the company’s tax rate is 40 percent.

a. What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

b. If the company is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Discount rate              %

One year​ ago, your company purchased a machine used in manufacturing for $95,000.You have learned that a new machine is available that offers many advantages and that you can purchase it for$160,000 today. The CCA rate applicable to both machines is 20%​; neither machine will have any​ long-term salvage value. You expect that the new machine will produce earnings before​ interest, taxes,​ depreciation, and amortization (EBITDA​) of $55,000 per year for the next ten years. The current machine is expected to produce EBITDA of $25,000 per year. All other expenses of the two machines are identical. The market value today of the current machine is $50,000.Your​ company's tax rate is 38%​, and the opportunity cost of capital for this type of equipment is 11%.

Should your company replace its​ year-old machine?

Stock Valuation and Analysis :

Vivint Solar, Inc. (VSLR)

NYSE - Nasdaq Real Time Price. Currency in USD

Assignment Content

Top of Form

Resource

• Stock Valuation and Analysis,Stock Valuation and Analysis Grading Guide

Purpose of Assignment

The purpose of this assignment is to allow students the opportunity to research a Fortune 500 company stock using the popular online research tool, Yahoo Finance. The tool allows the student to review analyst reports and other key financial information necessary to evaluate the stock value and make an educated decision on whether to invest.

Assignment Steps

Select a Fortune 500 company from one of the following industries:

• Pharmaceutical
• Energy
• Retail
• Automotive
• Computer Hardware
• Manufacturing
• Mining

Access Yahoo Finance and enter the company name.

Review the financial information and statistics provided for the stock you selected and answer the following:

• What is the ticker symbol of the company you chose?
• What is the Current Stock Price?
• What is the Market Cap for the stock you chose?
• What is the Price to Earnings Ratio?
• What is the Dividend and Yield?
• What is the Enterprise Value?
• What is the Beta?
• Was there a Stock Split, and if so, when?
• What was the closing stock price for the last 5 days?
• What was the 52 Week High for this stock?
• What is the Book Value per Share?
• What type of rating are analysts recommending (i.e. buy, hold, etc.)?
• What is the target price analysts are predicting for this stock?
• What is the analyst's average revenue estimate for next year?
• What are some of the significant news items and press releases made by the company over the last year?

Explain in 700 words why you would or would not recommend investing in this stock.

• Describe the relationship between the value of the stock and the price to earnings ratio.
• What information does the Market Capitalization (Market Cap) and Beta provide to the investor?

Submit your assignment.

Judy’s Rugs, Inc. needs an additional $50,000 to support an expansion of fixed assets. A banker has offered to loan the money at 14 percent interest but also requires a compensating balance of 25 percent of the loan amount. What is the effective rate of the one year loan?

You have been asked by the president of the Farr Construction Company to evaluate the proposed acquisition of a new earth mover. The mover’s basic price is $200,000, and it would cost another $30,000 to modify it for special use. Assume that the mover falls into the MACRS 5-year class, it would be sold after 4 years for $60,000, and it would require an increase in net operating working capital (spare parts inventory) of $10,000. The earth mover would have no effect on revenues, but it is expected to save the firm $50,000 per year in before-tax operating costs, mainly labor. The firm’s marginal federal-plus-state tax rate is 40 percent and the project’s cost of capital is 10 percent. Evaluate the project using the NPV rule and the IRR rule.