24.

The sustainable growth rate of a firm is best described as the

25.

Which of the following statements are correct?

I. Going-concern value of a firm is equal to the present value of expected future cash flows to owners and creditors.
II. When an acquiring firm purchases a target firm’s equity, the acquirer need not assume the target’s liabilities.
III. The market value of a public company reflects the worth of the business to minority investors.
IV. The fair market value of a business is usually the lower of its liquidation value and its going-concern value.

26.

The following information is available about Chiantivino Corp. (CC):

An activist investor is confident that by terminating CC’s money-losing fortified wine division, she can increase free cash flow by $4 million annually for the next decade. In addition, she estimates that an immediate, special dividend of $10 million can be financed by the sale of the division.

27.

Which of the following statements is/are correct?
I. Going-concern value of a firm is equal to the present value of expected net income.
II. When a buyer values a target firm, the appropriate discount rate is the buyer’s weighted-average cost of capital.
III. The liquidation value estimate of terminal value usually vastly understates a healthy company’s terminal value.
IV. The value of a firm’s equity equals the discounted cash flow value of the firm minus all liabilities.

28.

A recent annual income statement for Stone Creek Roofing is shown below.

Assume that during the year, Stone Creek spent $180 on new capital equipment and increased current assets net of non-interest-bearing current liabilities by $120. What was Stone Creek’s free cash flow in this year?

Need 300 words discussion, Identify and describe two (2) incremental cash flows from a proposed project such as expanding a product line or to launching a new product or service

Please don't rewrite already existing chegg answer

A loan of $100,000 is made today. The borrower will make equal repayments of $3418.16 per month with the first payment being exactly one month from today. The interest being charged on this loan is constant (but unknown).

For the following two scenarios, calculate the interest rate being charged on this loan, expressed as a nominal annual rate in percentage:

(a) The loan is fully repaid exactly after 33 monthly repayments, i.e., the loan outstanding immediately after 33 repayments is exactly 0.

(b) The term of the loan is unknown but it is known that the loan outstanding 2 years later equals to $32254.82.

how to calculate non-operating income days?

Lindsay is 28 years old and has a new job in web development. She wants to make sure that she is financially sound by the age of 55, so she plans to invest the same amount into a retirement account at the end of every year for the next 27 years.

(a) Construct a data table in Excel that will show Lindsay the balance of her retirement account for various levels of annual investment and return. If Lindsay invests $10,000 at return of 6%, what would be the balance at the end of the 27th year? Note that because Lindsay invests at the end of the year, there is no interest earned on the contribution for the year in which she contributes. Round your answer to a whole dollar amount.

(b) Develop a two-way table for annual investment amounts of $5,000 to $20,000 in increments of $1,000 and for returns of 0% to 12% in increments of 1%. From the 2-way table, what are the minimum annual investments Lindsay’s must contribute for annual rates ranging from 6% to 11%, if she wants to accrue a final payout of at least $1 million? Note that because Lindsay invests at the end of the year, there is no interest earned on the contribution for the year in which she contributes.

Annual Return Minimum Annual Investment 6% $ 7% $ 8% $ 9% $ 10% $ 11% $

The Trailing Multiples or the Forward Multiple? which one is the best? Why?

What are the benefits of using the Earnings Multiple Method to determine the value of a target company?

Where should the analyst exercise caution when using the Earnings Multiple Method?

Should the results of the Earnings Multiple Method be used as the final determination of the value of the target company? Why? Or why not?

$5,000 is deposited today into a bank account. The account earns 7.1% per annum compounded half yearly for the first 6 years, then 4.2% per annum compounded quarterly thereafter. Assuming no further deposits or withdrawals are made, (a) Calculate the account balance six months from today. (b) Calculate the account balance 6 years from today. (c) Calculate the account balance 6.5 years from today. (d) Calculate the account balance 10 years from today.

McGilla Golf is evaluating a new line of golf clubs. The clubs will sell for $910 per set and have a variable cost of $405 per set. The company has spent $135,000 for a marketing study that determined the company will sell 46,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 8,600 sets of its high-priced clubs. The high-priced clubs sell at $1,410 and have variable costs of $540. The company also will increase sales of its cheap clubs by 11,200 sets. The cheap clubs sell for $405 and have variable costs of $135 per set. The fixed costs each year will be $9,200,000. The company has also spent $950,000 on research and development for the new clubs. The plant and equipment required will cost $28,000,000 and will be depreciated on a straight-line basis to a zero salvage value. The new clubs also will require an increase in net working capital of $2,260,000 that will be returned at the end of the project. The tax rate is 23 percent and the cost of capital is 14 percent.

Calculate the payback period. (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)

Calculate the NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Calculate the IRR. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

The Ironworks Pegs Corporation, facing a market that is requiring more and more of the square-type pegs as opposed to the round one, is considering a project to start producing square pegs to meet the expected growth in the market demand. In order to produce the new pegs, the company needs to replace an existing old machine that produces round pegs with a new one. The new machine costs $150,000 (including shipping and handling). The old machine has been fully depreciated and the new one would be depreciated on a straight-line basis over its estimated useful life of 15 years. If the decision is made to go ahead with the project the old machine will be sold for $10,000. Annual revenues are expected to be $132,000; cost of goods sold $41,000; operating costs (excluding depreciation) $35,000. The existing operating profit (EBIT) from the old machine is $5,000 per year (which is assumed to continue for the following ten years if the new project does not get the green light). The company estimates the actual productive life of the project at 10 years, after which the new machine would be sold for a salvage value of $80,000. The initial net working capital needed for the expanded operations is estimated at $25,000. The NWC will rise to $35,000 by the end of year one, then to $50,000 by the end of year two. No additional changes in NWC are expected for years three through eight. By the end of year 9, the NWC would be reduced to $30,000 (no theft, spoilage, or obsolescence is assumed to have occurred by the end of year ten). The way the company made all these estimates is by conducting a technical and economic feasibility study that cost $35,000. It also cost $15,000 to market-test the new widgets. The company’s marginal tax rate is 40%. The required rate of return on this investment is 15%.

1. Calculate the net initial investment needed for the new peg machine.

2. Calculate the expected after-tax salvage value of the new machine when the time comes for it to be sold.

3. Estimate all the relevant annual free cash flows and show them on a timeline using the Excel spreadsheet.

4. Use the six capital budgeting decision criteria to make a decision as to whether to go ahead with the project. Use the Excel finance functions. Assume a 6-year acceptable payback period.

Please give us one example from your research, work, or personal life using the concepts of present value, future value and discounting cash flows and applying it to bond valuation and pricing.

Dividend policy of a company may affect dividend signalling when?

I would like to propose my company (Airbnb) to penetrate to another country by piloting in Istanbul, Turkey.

Potential Competitors

Identify companies that:

• have business activities similar (or related) to the business opportunity you are proposing; and
• operate in the country that you are considering for your international business enterprise.

Competitive Advantages

Discuss the competitive advantages of these companies. (For example, some companies may gain a competitive advantage as a result of access to raw materials, others may gain an advantage through the use of technology for production and distribution or as a result of a well-known brand name.)

Based on the country (or countries) you are analyzing for your global business enterprise, research information related to the following areas:

Government and Politics

Describe the type of government and recent political developments that could influence the economic and business environment of the country. (For example, various events in recent years in the Middle East have contributed to uncertainty when doing business with some countries.)

Formal Trade Barriers

Identify formal trade barriers (tariffs and other taxes, foreign exchange controls, ownership restrictions) that might require a company to adapt its business strategy.

Intellectual Property

Discuss the country’s regulations to protect intellectual property, such as brand names, copyrights, patents, software, music, videos. (Some countries do not enforce these laws resulting in the pirating of products and lost profits for companies.)

PART 1)  Statement of the Assignment:

Please prepare a comprehensive list of financial ratios . Write a brief explanation below each financial ratio, e.g. what does the financial ratio measures or what the significance of it is.

For example:

Current Ratio = Current Assist / Current Liabilities

Current ratio measures whether our current assets, if liquidated, are sufficient to pay all of our current liabilities. A CR of 1.5, for example, shows that if we were to liquidate all of our current assets, we will be able to cover 1.5x our current liabilities, whereas a CR of 0.5 shows that liquidating our current assets only covers half of our current liabilities.

THE FOLLOWING RATIONS ARE THE RATIONS I NEED. CAN I GET AN ANSWER EACH ONE OF THEM. (EACH BULLET POINT) please explain each ration, its process and how each one of them it is used

  Asset management, Or turnover, measures

Receivables Turnover = sales / accounts receivable

• NWC turnover= sales / NWC

• Fixed asset turnover = sales/ net fixed assets

• Total asset turnover = sales/ total assets

• Return on equity = net income / total equity

• EPS = net income/ Shares outstanding

• PE= price per share / earning per share

• Market to book ratio= market value per share / book value per share

• Enterprise value= total market value of the stock + book value of liabilities – cash

• EBITA Ration= enterprise value/ EBITDA

Consider an option on a non-dividend-paying stock when the stock price is $48, the exercise price is $46, the risk-free interest rate is 6% per annum, the volatility is 20% per annum, and time to maturity is four months. (a) What is the price of the option if it is a European call? (b) What is the price of the option if it is a European put? (c) What is the price of the option if it is an American call? (d) How would the result of a) change if a dividend of $1 is expected in two months? How would the result of a) change if a dividend of $2 is expected in six months?