Mojo Mining has a bond outstanding that sells for $1,058 and matures in 24 years. The bond pays semiannual coupons and has a coupon rate of 6.02 percent. The par value is $1,000. If the company's tax rate is 35 percent, what is the aftertax cost of debt? Multiple Choice 5.29% 3.63% 5.67% 3.40% 3.90%

You want to buy a car, and a local bank will lend you $35,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 7% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR? Do not round intermediate calculations. Round your answer for the monthly loan payment to the nearest cent and for EAR to two decimal places.

Monthly loan payment: $  

EAR: %

how are cash flow projections determined? Are they accurate?

In your own words define the following key terms:

Current Ratio

Days Cash on Hand (DCOH)

Days Receivables

Liquidity Ratios

Operating Margin

Profitability Ratios

Quick Ratio

Research, define, describe, and explain the above-mentioned (Minimum 250 words answer for each questions)

1. What is capital budgeting?

2. What is an operating budget?

3. Explain capital structure.

4. Explain what financing instruments are and discuss options, futures, derivatives and securities valuation.

5. Explain what the money market is and market efficiency

6. List three different types of financial ratios and explain them

Interest rates on 4-year Treasury securities are currently 6.3%, while 6-year Treasury securities yield 7.15%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round intermediate calculations. Round your answer to two decimal places.,,,

Louie’s Leisure Products is considering a project which will require the purchase of $1.5 million of new equipment. Shipping and installation will be an additional $300,000. For tax purposes, the equipment will be depreciated straight-line to a salvage value of $200,000 over the five-year life of the project. Louie’s expects to sell the equipment at the end of five years for $100,000. Annual sales from this project are estimated at $1.2 million with annual operating costs estimated at $500,000. Net working capital is equal to $100,000, and all of the net working capital will be recouped at the end of the project. The firm desires a minimal 14% rate of return on this project. The tax rate is 34%. What is the NPV of the project?

a. A bond that has ​$1 comma 000 par value​ (face value) and a contract or coupon interest rate of 6 percent. A new issue would have a floatation cost of 8 percent of the ​$1 comma 150 market value. The bonds mature in 13 years. The​ firm's average tax rate is 30 percent and its marginal tax rate is 33 percent.
b. A new common stock issue that paid a ​$1.80 dividend last year. The par value of the stock is​ $15, and earnings per share have grown at a rate of 11 percent per year. This growth rate is expected to continue into the foreseeable future. The company maintains a constant​ dividend-earnings ratio of 30 percent. The price of this stock is now ​$29​, but 7 percent flotation costs are anticipated.
c. Internal common equity when the current market price of the common stock is ​$45. The expected dividend this coming year should be ​$3.20​, increasing thereafter at an annual growth rate of 7 percent. The​ corporation's tax rate is 33 percent.
d. A preferred stock paying a dividend of 9 percent on a ​$120 par value. If a new issue is​ offered, flotation costs will be 12 percent of the current price of ​$179.
e. A bond selling to yield 13 percent after flotation​ costs, but before adjusting for the marginal corporate tax rate of 33 percent. In other​ words, 13 percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows​ (principal and​ interest).

a. What is the​ firm's after-tax cost of debt on the​ bond?

b. What is the cost of external common​ equity?

c. What is the cost of internal common​ equity?

d. What is the cost of capital for the preferred​ stock?

e. What is the​ after-tax cost of debt on the​ bond?

Elliot Karlin is a​ 35-year-old bank executive who has just inherited a large sum of money. Having spent several years in the​ bank's investments​ department, he's well aware of the concept of duration and decides to apply it to his bond portfolio. In​ particular, Elliot intends to use $ 1 million of his inheritance to purchase 4 U.S. Treasury​ bonds: 1. An 8.66 %​, ​13-year bond​ that's priced at $ 1,096.15 to yield 7.49 %. 2. A 7.776 %​, ​15-year bond​ that's priced at $ 1016.49 to yield 7.59 %. 3. A​ 20-year stripped Treasury​ (zero coupon)​ that's priced at $ 198.52 to yield 8.25 %. 4. A​ 24-year, 7.41 % bond​ that's priced at $ 956.93 to yield 7.81 %. Note that these bonds are semiannual compounding bonds. a. Find the duration and the modified duration of each bond. b. Find the duration of the whole bond portfolio if Elliot puts $ 250,000 into each of the 4 U.S. Treasury bonds. c. Find the duration of the portfolio if Elliot puts $ 370,000 each into bonds 1 and 3 and $ 130,000 each into bonds 2 and 4. d. Which portfolio-b or c-should Elliot select if he thinks rates are about to head up and he wants to avoid as much price volatility as​ possible? Explain. From which portfolio does he stand to make more in annual interest​ income? Which portfolio would you​ recommend, and​ why?

Cochran Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $1,950,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,145,000 in annual sales, which costs $1,205,000. If the tax rate is 35%, , OCF is $838,500.Calculate the NPV using the required return of 14% using the cash flows from the previous problem. And Do some sensitivity analysis. Suppose the president lowered the tax rate to 30%. Calculate the NPV again using a 14% required return.

Which of the following statements is CORRECT?

Dividends are always paid by a corporation.

EBIT has already been taxed.

One way of using the excess cash is to pay the shareholders a dividend. Another way might be a firm buying its own stock back.

If a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation.

For profit firms write large checks for depreciation expense.

Analysts who follow Howe Industries recently noted that, relative to the previous year, the company’s net cash provided from operations increased, yet cash as reported on the balance sheet decreased.Which of the following factors could explain this situation?

The company cut its dividend.

The company made large investments in fixed assets.

The company sold a division and received cash in return.

The company issued new common stock.

The company issued new long-term debt.

The Nantell Corporation just purchased an expensive piece of equipment.Assume that the firm planned to depreciate the equipment over 5 years on a straight-line basis, but Congress then passed a provision that requires the company to depreciate the equipment on a straight-line basis over 7 years.Other things held constant, which of the following will occur as a result of this Congressional action?Assume that the company uses the same depreciation method for tax and stockholder reporting purposes.

Nantell’s taxable income will be lower.

Nantell’s operating income (EBIT) will increase.

Nantell’s cash position will improve (increase).

Nantell’s reported net income for the year will be lower.

Nantell’s tax liability for the year will be lower.

4).      Your bank account pays an 8% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT?

a.   The periodic rate of interest is 2% and the effective rate of interest is 4%.

b.   The periodic rate of interest is 8% and the effective rate of interest is greater than 8%.

c.   The periodic rate of interest is 4% and the effective rate of interest is less than 8%.

d.   The periodic rate of interest is 2% and the effective rate of interest is greater than 8%.

e.   The periodic rate of interest is 8% and the effective rate of interest is also 8%.

Edelman Engines has $18 billion in total assets — of which cash and equivalents total $120 million. Its balance sheet shows $3.6 billion in current liabilities — of which the notes payable balance totals $1.04 billion. The firm also has $9.9 billion in long-term debt and $4.5 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $26 per share. The firm's EBITDA totals $1.248 billion. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What are Edelman's market/book and its EV/EBITDA ratios? Do not round intermediate calculations. Round your answers to two decimal places.

m/b

ev/ebitda

Amira sells auto parts from her home. She usually sells the parts to her neighbors and friends. She has been doing this for a long time. Emma owns a factory that makes auto parts. Emma has sold auto parts to Amira each year for the past ten years. Both Emma and Amira try to do what everyone else in the auto parts business does, which is selling the parts and then installing them. One day, Amira decides that she wants more money. Amira still plans on doing business from her home. Amira asks Emma, “I will pay you what I always have paid you for your nicest auto parts. Just let me know” Emma doesn’t answer but, a week later, Emma delivers, at Amira’s mother’s house, half the number of fuel filters that she usually has delivered to Amira. Three weeks later, Emma delivers the other half of the fuel filters to Amira’s mother’s house. Emma then goes on the first vacation that she has ever taken in her whole life, leaving the country for twenty years. After both deliveries of the parts, Amira had found the parts at her mother’s house by accident. Amira does not even look at the filters until two months after Emma has already left for vacation and then finds that a third of them don’t work. By then, Amira has no way to contact Emma. Unfortunately, mechanic Melinda, whom Amira has hired sometime to install auto parts because Melinda always gives Amira a 50% discount in installation cost, also left the country just yesterday. Now, it is too late for Amira to ask Melinda to install the parts that do work properly. Amira tells Jordyn, another mechanic, about all the trouble Amira is having. Jordyn, without first telling Amira, goes ahead and installs the parts and sends Amira a bill for three times the usual installation fee. This is just the way that Jordyn does business. Jordyn knows that Amira has never paid anyone more than the usual installation fee, but Jordyn does the installation anyway because Jordyn was feeling lucky. Identify all pertinent legal issues, making sure to give the names of specific legal concepts and applying the facts to the issues. Also, what are both duties and rights that all the parties have? Make sure that you identify and explain all possibilities.