The Lopez-Portillo Company has $12.2 million in assets, 80 percent financed by debt and 20 percent financed by common stock. The interest rate on the debt is 9 percent and the par value of the stock is $10 per share. President Lopez-Portillo is considering two financing plans for an expansion to $26 million in assets.

Under Plan A, the debt-to-total-assets ratio will be maintained, but new debt will cost a whopping 12 percent! Under Plan B, only new common stock at $10 per share will be issued. The tax rate is 30 percent.

a. If EBIT is 10 percent on total assets, compute earnings per share (EPS) before the expansion and under the two alternatives. (Round your answers to 2 decimal places.)

Earnings per share

Current ___________________

Plan A____________________

Plan B____________________

b. What is the degree of financial leverage under each of the three plans? (Round your answers to 2 decimal places.)

  Degree of financial leverage

Current____________________________

Plan A ____________________________

Plan B ____________________________

c. If stock could be sold at $20 per share due to increased expectations for the firm’s sales and earnings, what impact would this have on earnings per share for the two expansion alternatives? Compute earnings per share for each. (Round your answers to 2 decimal places.)
   Earnings per share

Plan A _____________________

Plan B______________________

In this week’s readings, you learned about other types of cost classifications, such as differential costs, sunk costs, and opportunity costs. Discuss how these concepts are used in managerial decision making? Include an example in your response. Please be sure to validate your opinions and ideas with citations and references in APA format.

To supplement your​ retirement, you estimate that you need to accumulate ​$270,000 exactly 35 years from today. You plan to make​ equal, end-of-year deposits into an account paying  11% annual interest. a.  How large must the annual deposits be to create the ​$270,000 fund by the end of 3535 ​years? b.  If you can afford to deposit only ​$660 per year into the​ account, how much will you have accumulated in 35 ​years?

12.Larry decide to begin saving towards the purchase of a backup generator in 5 years. If he puts $2,000 at the beginning of each of the next 5 years in a savings account paying 9 percent compounded quarterly, how much will you accumulate after 5 years? Note: You are only making 5 payments, and the first payment is today. a. $11,636.23 b. $13,046.67 c. $11,969.42 d. $12,043.17 e. $13,164.19

11. Krishnan decide to begin saving towards the purchase of a new Toyota Highlander in 7 years. If he puts $4,000 at the beginning of each of the next 7 years in a savings account paying 7 percent compounded annually, how much will he accumulate after 7 years? Note: Krishnan is only making 7 payments, and the first payment is today. a. $33,575.35 b. $34,616.08 c. $35,750.74 d. $37,039,21 e. $41,969.19

Based on the following table, calculate the forward discount (or forward premium) at which USD is trading against CHF for a 6-month delivery. Which currency is trading at forward premium for a delivery in 3 months? Explain.

                                                              USD equivalent               Currency per USD

                CHF                                     1.0697                                                 0.9348

                        1-mos forward      1.0700                                               0.9346

                        3-mos forward      1.0705                                                0.9341

                        6-mos forward      1.0715                                               0.9333

                GBP                                     1.5733                                                0.6356

                        1-mos forward      1.5729                                                 0.6358

                        3-mos forward      1.5723                                                 0.6360

                        6-mos forward      1.5713                                                 0.6364

Nippon Steel’s expenses for heating and cooling a large manufacturing facility are expected to increase according to an arithmetic gradient beginning in year 2. If the cost is $550,000 this year (year 0) and will be $550,000 again in year 1, but then it is estimated to increase by $41,000 each year through year 12, what is the equivalent annual worth in years 1 to 12 of these energy costs at an interest rate of 11% per year? The equivalent annual worth is determined to be?

help with excel formulas to answer this question would be great, thanks.

International trade agreements have been in the news recently, from Britain’s decision to leave the EU to the United States pulling out of the agreement on TPP and the U.S. re-opening negotiations on NAFTA. Discuss the expected winners and losers from such events and how these events might affect attempts at international expansion, foreign direct investment, and enforcement of international regulations.

In 2019 two ride-sharing companies - Lyft and Uber - went public.Whats are the risks that these companies are facing? Are these risks similar or different for both companies?

Staci Sutter works as an analyst for Independent Investment Bank Shares (IIBS), which is a large investment banking organization. She has been evaluating an initial public offering (IPO) that IIBS is handling for a technology company named ProTech Incorporated. Staci is essentially finished with her analysis, and she is ready to estimate the price for which the stock should be offered when it is issued next week. According to her analysis, Staci has concluded that ProTech is financially strong and is expected to remain financially strong long into the future. In fact, the figures provided by ProTech suggest that the firm’s growth will exceed 30% during the next 5 years. For these reasons, Staci is considering assigning a value of $35 per share to ProTech’s stock.

Staci, however, has an uneasy feeling about the validity of the financial figures she has been evaluating. She believes that Protech’s CFO has given her what he believes are “quality financial statements”. Yesterday Staci received an email from a friend, who was an executive at ProTech until he was fired a few months ago, that suggests that the company has been artificially inflating its sales by selling products to an affiliate company and then repurchasing the same items a few months later. At the same time, Staci received a memo from her boss, Mr. Baker, who has made it clear that he thinks the ProTech IPO can be extremely profitable to top management “if it is handled correctly.” In his memo, Mr. Baker indicates that the issue price of ProTech’s stock must be at least $34 per share for the IPO to be considered successful by IIBS.

Part of Staci’s uneasiness stems from the fact that a coworker confided that she had seen the CEO of ProTech and his wife at an amusement park with Mr. Baker and his wife last month. If she discovers that ProTech’s sales figures are inflated, Staci surely would assign a different value to the company’s stock for the IPO. But it will take her at least two weeks to completely reevaluate the company using different data. Staci knows that if she stays with her current analysis and she is wrong, the consequences can destroy IIBS because reputation is important in the investment banking business.

If you were in Staci’s situation, what would you do? (Please address in your initial post the following: (1) What is the ethical dilemma? (2) Should IIBS delay the Protech’s IPO until more information can be gathered about “information” Staci received recently and (3) What action do you think Staci, IIBS, or both should take? Please be detailed in your response.

In a two-stage dividend growth model, it is commonly assumed that dividend growth drops from a high rate in the first stage to a low perpetual growth rate in the second stage. Discuss the reasonableness of this assumption and what happens if this assumption is violated.

Ron's Loan: Ron borrows $3,000,000 to purchase a warehouse. The annual interest rate on the loan is 8.25 percent, and the term of the loan is 15 years. The loan requires the borrower to pay two discount points at the time of origination.

A) What is the monthly payment necessary to amortize this loan?

B) What is the balance on the loan at the end of month 36?

C) How much interest will Ron pay in month 37?   

D) How much principal will Ron pay in the fourth year of this loan (payments 37 through 48)?

Please give us one example from your research, work, or personal life explaining

• The difference between risk and return in owning stocks.
• The concepts of the Capital Asset Pricing Model.
• How to determine a firm's future profit potential and relation to stock price.