Questions
Shanken Corp. issued a 25-year, 4.7 percent semiannual bond 2 years ago. The bond currently sells...

Shanken Corp. issued a 25-year, 4.7 percent semiannual bond 2 years ago. The bond currently sells for 94 percent of its face value. The book value of the debt issue is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 12 years left to maturity; the book value of this issue is $45 million and the bonds sell for 50 percent of par. The company’s tax rate is 22 percent.

a.

What is the company's total book value of debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

b.

What is the company's total market value of debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

c.

What is your best estimate of 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.)

In: Finance

Suppose that the average waiting time for a patient at a physician's office is just over...

Suppose that the average waiting time for a patient at a physician's office is just over 29 minutes. In order to address the issue of long patient wait times, some physicians' offices are using wait-tracking systems to notify patients of expected wait times. Patients can adjust their arrival times based on this information and spend less time in waiting rooms. The following data show wait times (minutes) for a sample of patients at offices that do not have a wait-tracking system and wait times for a sample of patients at offices with a wait-tracking system.

Without Wait-
Tracking System
With Wait-Tracking
System
23 31
62 10
15 13
21 17
32 11
45 35
10 10
26 2
16 11
35 16
(a) Considering only offices without a wait-tracking system, what is the z-score for the 10th patient in the sample (wait time = 35 minutes)?
If required, round your intermediate calculations and final answer to two decimal places.
z-score =  
(b) Considering only offices with a wait-tracking system, what is the z-score for the 6th patient in the sample (wait time = 35 minutes)?
If required, round your intermediate calculations and final answer to two decimal places.
z-score =  
How does this z-score compare with the z-score you calculated for part (a)?
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
(c) Based on z-scores, do the data for offices without a wait-tracking system contain any outliers?
- Select your answer -YesNoItem 4
Based on z-scores, do the data for offices with a wait-tracking system contain any outliers?
I need the z-score

In: Finance

You plan to purchase a $180,000 house using a 15-year mortgage obtained from your local credit...

You plan to purchase a $180,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 5.5 percent. You will make a down payment of 10 percent of the purchase price.

a. Calculate your monthly payments on this mortgage.
b. Calculate the amount of interest and, separately, principal paid in the 20th payment.
c. Calculate the amount of interest and, separately, principal paid in the 110th payment.
d. Calculate the amount of interest paid over the life of this mortgage.

(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

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The Baldwin Company is considering investing in a machine that produces bowling balls. The cost of...

The Baldwin Company is considering investing in a machine that produces bowling balls. The cost of the machine is $100,000 and production is expected to be 8,000 units per year during the five-year life of the machine. The expected resale value is $5,000 (in real terms).
Since the interest in bowling is declining, the management believes that the nominal price of bowling balls will increase at only 2% per year. The nominal price of bowling balls in the first year will be $20. On the other hand, plastic used to produce bowling balls is rapidly becoming more expensive. Because of this, production costs are expected to grow at 10% (nominally) per year. First-year nominal production costs will be $10 per unit.
The company's nominal cost of capital is 15%. The rate of inflation is 5%. Ignore taxes. Should the project be undertaken?

Please give me a answer with equations and step by step solutions so that I can understand.

In: Finance

Long-Term Financing Needed At year-end 2016, Wallace Landscaping’s total assets were $1.6 million and its accounts...

Long-Term Financing Needed At year-end 2016, Wallace Landscaping’s total assets were $1.6 million and its accounts payable were $375,000. Sales, which in 2016 were $2.7 million, are expected to increase by 20% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $475,000 in 2016, and retained earnings were $260,000. Wallace has arranged to sell $155,000 of new common stock in 2017 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2017. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its profit margin on sales is 3%, and 50% of earnings will be paid out as dividends.

What was Wallace's total long-term debt in 2016? Round your answer to the nearest dollar.

What were Wallace's total liabilities in 2016? Round your answer to the nearest dollar.  

How much new long-term debt financing will be needed in 2017? (Hint: AFN - New stock = New long-term debt.) Round your answer to the nearest dollar.

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What is the value per share be of a company with the following dividends? Next years...

What is the value per share be of a company with the following dividends?

Next years Dividend is expected to be $1.40

Expect Div Growth rates

13.40%

12.70%

10.80%

9.65%

7.70%

ROE = 13.47%

Plowback Rate= 61%

US T-BILL = 1.15%

BETA = 1.07

expect ret in Mkt = 10.83%

Please compute with excel

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Another utilization of cash flow analysis is setting the bid price on a project. To calculate...

Another utilization of cash flow analysis is setting the bid price on a project. To calculate the bid price, we set the project NPV equal to zero and find the required price. Thus the bid price represents a financial break-even level for the project. Guthrie Enterprises needs someone to supply it with 152,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $1,920,000 to install the equipment necessary to start production; you’ll depreciate this cost straight-line to zero over the project’s life. You estimate that in five years this equipment can be salvaged for $162,000. Your fixed production costs will be $277,000 per year, and your variable production costs should be $9.70 per carton. You also need an initial investment in net working capital of $142,000. If your tax rate is 34 percent and you require a return of 12 percent on your investment, what bid price per carton should you submit? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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 Abner​ Corporation's bonds mature in 17 years and pay 11 percent interest annually. If you purchase...

 Abner​ Corporation's bonds mature in 17 years and pay 11 percent interest annually. If you purchase the bonds for ​$850​, what is your yield to​ maturity?

In: Finance

1.a) Briefly describe how the Efficient Frontier and the Capital Allocation Line (CAL) are determined. Include...

1.a) Briefly describe how the Efficient Frontier and the Capital Allocation Line (CAL) are determined. Include all steps and procedures.

1.b) The CAL has the following parameters: Risk-free rate is 3 percent, return on the optimal risky portfolio is 12 percent, with a standard deviation (SD) of 20 percent. What is your expected return if you limit your risk to a Standard Deviation of 10 percent?

1.c) How do you achieve a 35 percent return using the parameters above? Explain and show precisely how you would achieve the return and also calculate the standard deviation of the portfolio.

This is all the info I've been given. I need to draw the efficient frontier and capital allocation line and describe both.

In: Finance

The market price is ​$1,200 for a 9 ​-year bond ​($1,000 par​ value) that pays 8...

The market price is ​$1,200 for a 9 ​-year bond ​($1,000 par​ value) that pays 8 percent annual​ interest, but makes interest payments on a semiannual basis ​(4 percent​ semiannually). What is the​ bond's yield to​ maturity?

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discuss the role of paralegals with reference to the south african constitution

discuss the role of paralegals with reference to the south african constitution

In: Finance

Provide and example of tax elimination. Explain.

Provide and example of tax elimination. Explain.

In: Finance

Dmitri Ivanov is retiring soon, so he is concerned about his investments providing him steady income...

Dmitri Ivanov is retiring soon, so he is concerned about his investments providing him steady income every year. He is aware that if interest rates   , the potential earnings power of the cash flow from his investments will increase. In particular, he is concerned that a decline in interest rates might lead to   annual income from his investments.

Dmitri Ivanov is retiring soon, so he is concerned about his investments providing him steady income every year. He is aware that if interest rates   , the potential earnings power of the cash flow from his investments will increase. In particular, he is concerned that a decline in interest rates might lead to   annual income from his investments. a) decrease, increase b) less, more

2. What kind of risk is Dmitri most concerned about protecting against?

Interest rate risk

Reinvestment rate risk

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What is meant by an investor’s required rate of return? How do we measure risk in...

What is meant by an investor’s required rate of return? How do we measure risk in an investment? What do you consider a “risky” investment and a “safe” investment? What do you consider the tradeoff between risk and return of investments? Why are these concepts important to business leaders in Saudi Arabia? what are the risk versus return and doing business in Saudi ?Arabia.

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The Robinson Corporation has $32 million of bonds outstanding that were issued at a coupon rate...

The Robinson Corporation has $32 million of bonds outstanding that were issued at a coupon rate of 11.450 percent seven years ago. Interest rates have fallen to 10.450 percent. Mr. Brooks, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 17 years left to maturity, and Mr. Brooks would like to refund the bonds with a new issue of equal amount also having 17 years to maturity. The Robinson Corporation has a tax rate of 30 percent. The underwriting cost on the old issue was 3.20 percent of the total bond value. The underwriting cost on the new issue will be 2.10 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a 9 percent call premium starting in the sixth year and scheduled to decline by one-half percent each year thereafter. (Consider the bond to be seven years old for purposes of computing the premium.) Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume the discount rate is equal to the aftertax cost of new debt rounded up to the nearest whole percent (e.g. 4.06 percent should be rounded up to 5 percent).

a. Compute the discount rate. (Do not round intermediate calculations. Input your answer as a percent rounded up to the nearest whole percent.)

b. Calculate the present value of total outflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)

c. Calculate the present value of total inflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)

d. Calculate the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)

In: Finance