C&P Trading Inc., is entering into a 3-year remodeling and expansion project. Last year, the company paid a dividend of $3.40. It expects zero growth in the next year. In years 2 and 3, and 5% growth is expected, and in year 4, and 15% growth. In year 5 and thereafter, growth should be a constant 10% per year. What is the maximum price per share that an investor who requires a return of 12% should pay for Home Place Hotels common stock?(15') Find the value of the cash dividends at the end of each year. 4' Find the present value of the dividends expected during the initial growth period.3' Find the value of the stock at the end of the initial growth period. 4' Find the value of the stock. (Sum of PV of dividends during initial growth period and PV price of stock at end of growth period) 4'

1. Find the value of the cash dividends at the end of each year. 4'
2. Find the present value of the dividends expected during the initial growth period.3'
3. Find the value of the stock at the end of the initial growth period. 4'
4. Find the value of the stock. (Sum of PV of dividends during initial growth period and PV price of stock at end of growth period) 4'

Today's price for a 1-year, zero-coupon risk-free bond is $983.25, and the price of a 2-year, zero-coupon risk-free bond is $906.46. What should be the price of a risk-free, 2-year annual coupon bond with a coupon rate of 2.0%? Round your answer to the nearest penny (i.e., two decimal places).

Warren Plastic, LLC complete these transactions in year 1 and year 2. Give general journal entries for them.

date yr
2/20 1 Purchased equipment for 40,000, signed an 8-month note, 7%.

2/28 1 Recorded the month's sales of 200,000, one-eighth cash, seven-eighths credit.
Sales tax rate is 5.25%

3/20 1 Sent Feb. sales tax to the state.

4/30 1 Borrowed $255,000 on a long-term note, 7% note payable
Annual interest is to be paid each year on 4-30, starting yr. 2.

10/20 1 paid off the note dated 2-20-yr 1

11/30 1 bought inventory at a cost of 12,500. Signed a 3 month 3.25% note.

12/31 1 Accrued warranty expense, estimated at 2% of 2,400,000 of sales

12/31 1 Accrued Interest on ALL outstanding notes.

2/28 2 Paid off the inventory note at maturity, including interest.

4/30 2 Paid the annual interest on the 255,000 note.

1. Ragan owns 65% of Nada stock (S-Corporation) throughout the year. Ragan’s beginning of the year stock basis is $20,000. She has an additional stock purchase (investment) during the year of $10,000. She also loans the corporation $80,000 during the year. Nada S Corporation has beginning AAA of $250,000 and its Form 1120S shows the following information. 5 points

Sales                             $500,000

Distribution to Ragan    $30,000

Dividend Income          $15,000

COGS                            $320,000

Business Fine/Penalty   $50,000

Long term capital gain $25,000

Tax Exempt Income      $10,000

1. What is Nada’s end of the year AAA balance?
2. What is Ragan’s end of the year stock basis?

Key figures for Apple and Google follow.

Required:
1. Compute times interest earned for the three years' data shown for each company.
2. In the current year, and using times interest earned, which company appears better able to pay interest obligations?
3. In the current year, and using times interest earned, is the company in a good or bad position to pay interest obligations for (a) Apple, and (b) Google? Assume an industry average of 10.

Compute times interest earned for each of the three years shown. (Round your answer to 2 decimal places.)

A 5-year Treasury bond has a 3.7% yield. A 10-year Treasury bond yields 7%, and a 10-year corporate bond yields 8.5%. The market expects that inflation will average 3% over the next 10 years (IP₁₀ = 3%). Assume that there is no maturity risk premium (MRP = 0) and that the annual real risk-free rate, r*, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP = LP = 0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described. What is the yield on this 5-year corporate bond? Round your answer to two decimal places.

Suppose V is constant, M is growing 5% per year, Y is growing 2% per year, and r = 4. a. Solve for i. b. If the Central bank increases the money growth rate by 2 percentage points per year, find Δi. c. Suppose the growth rate of Y falls to 1% per year. - What will happen to π ? - What must the Fed do if it wishes to π constant?

On January 1, the first day of its fiscal year, Pretender Company issued $18,500,000 of five-year, 10% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Pretender Company receiving cash of $17,138,298.

Required:

Intra Corp. has the following operating data for the past 2 years: Year 1 Year 2 Return on Investment 10% 25% Residual Income $600 ? Required Rate of return 8% 10% Average operating assets ? $42,000 Sales in year 2 is $60,000 more than sales in year 1. The Company had the same capital turnover in both years.

(Q.) What is the sales margin in Year 2? Use two decimal places in the answer (for example, if the answer is 24%, key in "0.24").

(A.)

1. Starting from year 1, Project A offers to pay you $500 every year for 10 years, whereas Project B offers to pay you $520 for the first year and a yearly increased amount for the next 8 years after year 1. Project B’s payment in year t+1 will be 2% higher than its payment in year t. In year 0, Project A costs $2200 while Project B costs $2250. If the discount rate for Project A is 10% and for Project B is 12%, which one of these two investment opportunities would you pick?