The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $13 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 40%. The CFO has estimated next year's EBIT for three possible states of the world: $5 million with a 0.2 probability, $2.9 million with a 0.5 probability, and $0.4 million with a 0.3 probability. Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places at the end of the calculations.

Debt/Capital ratio is 0.

Debt/Capital ratio is 10%, interest rate is 9%.

Debt/Capital ratio is 50%, interest rate is 11%.

Debt/Capital ratio is 60%, interest rate is 14%.

The following are the projected cash flows to the firm over the next five years:

The firm has a cost of capital (WACC )of 12% and the cash flows are expected to grow at the rate of 4% in perpetuity?

a) What is the value of the firm today?

b) At what growth rate will the firm have a value of $3000 Million?

(Capsim Capstone) Please comment on the importance of analyzing your results before making new decisions. Feel free to comment on any of the following areas: R & D, marketing, production, finance, HR, or TQM.

Your neighbor approached you about a dilemma he has with his mortgage. He purchased his house in 2006 with a $600,000, 6% fixed rate, 30 year mortgage. Then the great recession hit. Today his house is estimated to be worth less than the balance he owes on the mortgage. Furthermore, he was forced to take a new job at 20% less than what he was earning when he purchased the house. Here in 2012, 72 months later, he is contemplating entering into a mortgage modification program sponsored by the government. It offers 3 options.

1. reducing the interest rate to 4.5%
2. forgiveness of $100,000 of the principle due and continuing at 6%
3. refinancing the balance due with a new 15 year, 4% mortgage

Which option would minimize his monthly mortgage payment? Assume all refinancing costs will be paid by the government.

1. Broussard Skateboard's sales are expected to increase by 20% from $7.6 million in 2016 to $9.12 million in 2017. Its assets totaled $2 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 70%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations.

A stock portfolio has an expected return of 12% and a standard deviation of 20%. A bond portfolio has an expected return of 6% and a standard deviation of 9%. The two portfolios have a correlation coefficient of 0.3. T-Bills have an expected return of 2%. Your coefficient of risk aversion is 7.

1. What is the expected return and standard deviation of the minimum variance portfolio?

Retirement planning  

   Hal​ Thomas, a 35​-year-old college​ graduate, wishes to retire at age 65. To supplement other sources of retirement​ income, he can deposit ​$2,100 each year into a​ tax-deferred individual retirement arrangement​ (IRA). The IRA will earn a return of 14​% over the next 30 years.

a.  If Hal makes​ end-of-year ​$2,100 deposits into the​ IRA, how much will he have accumulated in 30 years when he turns 65​?

b.  If Hal decides to wait until age 45 to begin making​ end-of-year ​$2,100 deposits into the​ IRA, how much will he have accumulated when he retires 20 years​ later?

c.  Using your findings in parts a and ​b, discuss the impact of delaying deposits into the IRA for 10 years​ (age 35 to age 45​) on the amount accumulated by the end of​ Hal's 65th

year.

d.  Rework parts ​a, b, and c assuming that Hal makes all deposits at the​ beginning, rather than the​ end, of each year. Discuss the effect of​ beginning-of-year deposits on the future value accumulated by the end of​ Hal's 65th year.

3. Pick three things that affect the value of options and explain why they affect the value of options the way they do. (9 pts.)

1. In your own words, describe what real options are in relation to capital budgeting. Describe two specific examples of real options. In general, how do real options tend to affect project NPVs and why? (10 pts.)

.   Explain what passive bond portfolio management is and how immunization and dedication can work when using a passive strategy. Please be as specific and complete as possible. (10 pts.)

Deutsche Transport can lease a truck for four years at a cost of €30,000 annually. It can instead buy a truck at a cost of €80,000, with annual maintenance expenses of €10,000. The truck will be sold at the end of four years for €20,000. Ignore taxes.

a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 10%? (Do not round intermediate calculations. Enter your answer in Euro. Round your answer to the nearest whole number.)

b. Which is the better option: leasing or buying?

1. A year ago, an investor purchased bonds in General Electric at par. The bond had a coupon of 8% at the date of issue. The bond declined over the course of the year to 94. What is the current yield on the bond? Answer is 8.51%

2. XYZ Inc. has some bonds outstanding, currently with 10 years remaining to maturity. The coupon rate is 8%, and the interest is paid semi-annually. The face value of the bonds is $100. What is the present value of the interest coupon stream if the yield to maturity is 10%? Answer is 87.53

show work for both preferably for financial calculator please

Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $400,000. Of this sum, $50,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the company will need to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $50,000 straight-line over five years.

How will the tax authority's decision affect the after-tax cost of the kiln? The tax rate is 25%, and the opportunity cost of capital is 5%. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

Unsure how to get the answer to the second part of the question.

Filer Manufacturing has 4,793,350 shares of common stock outstanding. The current share price is $55.99, and the book value per share is $8.27. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $77,208,537, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $65,474,675, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par.

The most recent dividend was $0.75 and the dividend growth rate is 0.05. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 0.21.

What is Filer's aftertax cost of debt? Enter the answer with 4 decimals (e.g. 0.2345)