10-4 Suppose that five years ago Cisco Systems sold a 15 years bond issue that had a $1000 par value and a 7 percent coupon rate. Interest is paid semiannually.

a- If the going interest rate has risen to 10 percent, at what price would the bonds be selling today?

b- Suppose that the interest rate remained at 10 percent for the next 10 years. What would happen to the price of Cisco's bonds over time?

How does a cross-currency swap hedge the equity stake?

Altman’s original Z-score bankruptcy model takes five key ratios into account:

a. working capital / total assets

b. retained earnings / total assets

c. earnings before interest and taxes / total assets

d. market value of equity / total liabilities

e. sales / total assets

Discuss the reasons why these ratios are linked to the probability of going into bankruptcy, and comment on their relative importance.

Compare the financial reports from Disney, Hilton Worldwide, Starwood, Intercontinental, Marriott International, and Marriott Vacations.

Disney Company:

Hilton Worldwide:

Starwood Hotels:

Key Financials

(In USD as of 06/30/2016)

Marriott International:

Marriott Vacations:

Bellwood Corp. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt. Plan II would result in 9,800 shares of stock and $247,000 in debt. The interest rate on the debt is 10 percent.

a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $79,000. The all-equity plan would result in 15,000 shares of stock outstanding. Which of the three plans has the highest EPS? The lowest?

b. In part (a), what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? Is one higher than the other? Why?

c. Ignoring taxes, when will EPS be identical for Plans I and II?

d. Repeat parts (a), (b), and (c) assuming that the corporate tax rate is 21 percent. Are the break even levels of EBIT different from before? Why or why not?

If the current rate of interest is 8% APR, then the future value of an investment that pays $500 every two years and lasts 20 years is closest to:

$11,000

$10,661

$22,881

$20,000

Problem 5-10 (Yield to Maturity and Required Returns)

71. What information must a corporation put in a registration statement?

72. Dillingham (a resident of Washington)is a commercial debtor who is taking out a loan. Vernon is a loan officer making the loan. The loan closes on September 1 st of 2018. Where must Vernon file the financing statement? How long is it good for? Can it be extended? If so, how does the secured creditor extend the financing statement and when must the extension be submitted?

Business Law class. Please short answer

Yes

Describe in your own words what marketing segmentation is? Why is it important to understand this concept? What are some disadvantages to not understanding it? Why?

1.Find Macy P/E ratio, enter the stock symbol to get to the company's front page. (The P/E ratio is listed on the company's front page).

2.Compare the P/E ratio of your company with the industry average or with major competitors.

3.Is there a difference between these numbers?

4.Is the stock overvalued, undervalued, or properly valued? Why?

5.In accordance with the findings, is it reasonable to buy the stock? explain.

include a paragraph in the initial response reflect on specifically what was learned from the assignment and how this could apply in the workplace.

3.  Problem 4-31 (Nonannual Compounding)

Firm B wants to hire Mrs. X to manage its advertising department. The firm offered Mrs. X a 3-year employment contract under which it will pay her an $67,500 annual salary in years 0, 1, and 2. Mrs. X projects that her salary will be taxed at a 25 percent rate in year 0 and a 40 percent rate in years 1 and 2. Firm B’s tax rate for the 3-year period is 35 percent. Use Appendix A and Appendix B. a. Assuming an 8 percent discount rate for both Firm B and Mrs. X, compute the NPV of Mrs. X’s after-tax cash flow from the employment contract and Firm B’s after-tax cost of the employment contract. b. To reduce her tax cost, Mrs. X requests that the salary payment for year 0 be increased to $107,500 and the salary payments for years 1 and 2 be reduced to $47,500. How would this revision in the timing of the payments change your NPV computation for both parties? c-1. Firm B responds to Mrs. X’s request with a counterproposal. It will pay her $107,500 in year 0 but only $42,500 in years 1 and 2. Compute the NPV of Firm B’s after-tax cost under this proposal. c-2. From the firm’s perspective, is this proposal superior to its original offer ($67,500 annually for three years)? d-1. Firm B responds to Mrs. X’s request with a counterproposal. It will pay her $107,500 in year 0 but only $42,500 in years 1 and 2. Complete the below table to calculate the NPV of Mrs. X’s after-tax cash flow. d-2. Should Mrs. X accept the original offer or the counterproposal?

68. Define the Implied Warranty of Merchantability. Under what circumstances does a merchant make such a warranty? May the warranty be disclaimed?

69. Who is classified as a merchant under the UCC?

70. In your own words, define the shelter principle. Who does it benefit?

Business Law class. Please short answer

Change Corporation expects an EBIT of $31,200 every year forever. The company currently has no debt, and its cost of equity is 11 percent. a. What is the current value of the company? b. Supposed the company can borrow at 6 percent. If the corporate tax rate is 22 percent, what will the value of the firm be if the company takes on debt equal to 50 percent of its unlevered value? What if it takes on debt equal to 100 percent of its unlevered value? c. What will the value of the firm be if the company takes on debt equal to 50 percent of its levered value? What if the company takes on debt equal to 100 percent of its levered value?