Investor A makes a cash purchase of 200 shares of AB&C common stock for $60 a share. Investor B also buys 200 shares of AB&C but uses margin. Each holds the stock for one year, during which dividends of $6 a share are distributed. Commissions are 3 percent of the value of a purchase or sale; the margin requirement is 60 percent, and the interest rate is 10 percent annually on borrowed funds.
A.
What is the percentage earned by investor A if he or she sells
the stock after one year for $45? Round your answer to one decimal
places.
%
What is the percentage earned by investor B if he or she sells the
stock after one year for $45? Round your answer to one decimal
places.
%
B.
What is the percentage earned by investor A if he or she sells
the stock after one year for $60? Round your answer to one decimal
places.
%
What is the percentage earned by investor B if he or she sells the
stock after one year for $60? Round your answer to one decimal
places.
%
C.
What is the percentage earned by investor A if he or she sells
the stock after one year for $65? Round your answer to one decimal
places.
%
What is the percentage earned by investor B if he or she sells the
stock after one year for $65? Round your answer to one decimal
places.
%
D.
What is the percentage earned by investor A if he or she sells
the stock after one year for $75? Round your answer to one decimal
places.
%
What is the percentage earned by investor B if he or she sells the
stock after one year for $75? Round your answer to one decimal
places.
%
Now the question changes
If the margin requirement had been 40 percent, what would have been the annual percentage returns?
A.
What is the percentage earned by investor A if he or she sells
the stock after one year for $45? Round your answer to one decimal
places.
%
What is the percentage earned by investor B if he or she sells the
stock after one year for $45? Round your answer to one decimal
places.
%
B.
What is the percentage earned by investor A if he or she sells
the stock after one year for $60? Round your answer to one decimal
places.
%
What is the percentage earned by investor B if he or she sells the
stock after one year for $60? Round your answer to one decimal
places.
%
C.
What is the percentage earned by investor A if he or she sells
the stock after one year for $65? Round your answer to one decimal
places.
%
What is the percentage earned by investor B if he or she sells the
stock after one year for $65? Round your answer to one decimal
places.
15% (I got this one right I am not sure how)
D.
What is the percentage earned by investor A if he or she sells
the stock after one year for $75? Round your answer to one decimal
places.
%
What is the percentage earned by investor B if he or she sells the
stock after one year for $75? Round your answer to one decimal
places.
%
Please show your work I want to learn this. Honestly if you just show me how to do the first few of both sections (part 1 &2) it would be greatly appreciated and help me learn this for my test later in the semester. Thanks.
In: Finance
A poll surveyed 341 video gamers, and 95 of them said they prefer playing games on a console, rather than a computer or hand-held device. An executive at a game console manufacturing company claims that the proportion of gamer who prefer consoles differs from 29%. Does the poll provide convincing evidence that the claim is true? Use the a= 0.05 level of significance and the P- method with the TI -84 Calculator.
In: Statistics and Probability
Manu works for an auto parts company in New York. He provides information and advice that are not available online to his clients, who are mainly small businesses like Briarcliff Auto. Manu provides credit to Briarcliff Auto, coordinates supplies of parts from several sources to Briarcliff Auto, delivers parts to Briarcliff Auto, and processes returns. Manu is a _______
a. marketer b. distributor c. businessmen d. reseller
In: Accounting
When an organization has specific qualifications or specifications they must recruit for, are company job boards, and recruitment agencies a better choice than using social media? If the organization posts jobs on traditional social outlets can it attract candidates, who may not be the best match for the job? This can waste valuable time the organization needs to find a candidate and prevent the organization from finding the optimal candidates for the job.
In: Operations Management
Which one of the factors is not likely to be associated with the large US trade deficit:
a. Low savings rate in the US
b. High spending rate, relative to income levels in the US
c. Low investment opportunity in the US
d. High value of the US dollar
please explain!
In: Economics
Frankly speaking, Jeff, I didn’t think we would stand a chance in winning this $20 million program. I was really surprised when they said that they’d like to accept our bid and begin negotiations. As Chief contract administrator, you will head up the negotiation team, “remarked Gus Bell, vice president and general manager of Cory Electric. “You have two weeks to prepare your data and line up your team. I want to see you when you’re ready to go”. Jeff Stokes was chief contract negotiator for Cory Electric, a $250- million-a year electrical components manufacturer serving virtually every major U.S industry. Cory Electric had a well-established matrix structure that had withstood fifteen years of testing. Job casting standards were well established, but did include some “fat” upon the discretion of the functional manager.
Two weeks later, Jeff met with Gus Bell to discuss the negotiation process.
Gus Bell: “Have you selected an appropriate team? You had better make sure that you’re covered on all sides”
Jeff: “There will be four, plus myself, at the negotiating table; the programme manager, the chief engineer who developed the engineering labour packages; the chief manufacturing engineer who developed the production labour package; and a pricing specialist who has been on the proposal since the kick-off meeting. We have a strong team and should be able to handle any questions”.
Jeff: “Yes! Our minimum position is $20 million plus an 8 percent profit. Of course, this profit percentage will vary depending on the negotiated cost. We can bid the programme at $15 million cost; that’s $5 million below our target cost and still book a 1.6 million profit by overrunning the cost-plus-fee contract. Here is a list of the possible cases. See Exhibit one below
Jeff: “I’ve read over all terms and conditions, and so have all the project office personnel as well as the key functional managers. The only major item is that the customer wants us to qualify some few vendors as sources for raw material procurement. We have included in the package the cost of qualifying two new raw material suppliers”
Gus Bell: “Where are the weak points in our proposal? I’m sure we have some”
Jeff: “Last month, the customer sent in a finding team to go over all of our labour justifications. The impression that I get from our people is that we’re covered all the way round. The only major problem might be where we’ll be performing on our learning curve. We put into the proposal 45 percent learning curve efficiency. The customer has indicated that we should be up around 50 to 55 percent efficiency based on our previous contracts with him. Unfortunately, those contracts the customer referred to were four years old. Several of the employees who worked on those programs have left the company. Others are assigned to on-going projects here at Cory. I estimate that we could put together about 10 percent of people we used previously. That learning curve percentage will be a big point for disagreements. We finished off the previous programs with the customer at 35 percent learning curve position. I don’t see how they can expect us to be smarter, given these circumstances.”
Gus Bell: “If that’s the only weakness, then we’re in good shape. It sounds like we have a fool proof audit trail. That’s good! What’s your negotiation sequence going to be?
Jeff: “I’d like to negotiate the bottom line only, but that’s a dream. We’ll probably negotiate the raw materials, the man-hours and the learning curve, the overhead rate, and finally the profit percentage. Hopefully, we can do it in that order.”
Gus Bell: “Do you think that we’ll be able to negotiate a cost above our minimum position?”
Jeff: “Our proposal was $22.2 million. I don’t foresee any problem that will prevent us from coming out ahead of the minimum position. The 5 percent change in learning curve efficiency amounts to approximately $ 1 million. We should be well covered.
“The first move will be up to them. I expect that they’ll come in with an offer of $ 18 to $19 million. Using the binary chop procedure, that’ll give us our guaranteed minimum position.
Gus Bell: “Do you know the guys who you’ll be negotiating with?”
Jeff: “Yes, I’ve dealt with them before. The last time, the negotiations took three days. I think we both got what we wanted. I expect this one to go just smoothly”
Gus Bell: “Okay, Jeff. I’m convinced we’re prepared for negotiations. Have a good trip”
The negotiations began at 9:00 A .M on Monday morning. The customer countered the original proposal of $22.2 million with an offer of $15 million. After six solid hours of arguments, Jeff and his team adjourned. Jeff immediately called Gus Bell at Cory Electric.
Jeff: “Their counteroffer to our bid is absurd. They’ve asked us to make a counteroffer to their offer. We can’t do that. The instant we give them a counter-offer, we are in fact giving credibility to their absurd bid. Now, they’re claiming that, if we don’t give them a counteroffer, then we’re not bargaining in good faith. I think we’re in trouble”
Gus Bell: “Has the customer done their homework to justify their bid?”
Jeff: “Yes, very well”. Tomorrow we’re going to discuss every element of the proposal, task by task. Unless something drastically changes in their position within the next day or two, contract negotiations will probably take up to a month”
Gus Bell: “Perhaps this is one program that should be negotiated at the top levels of management. Find out if the person that you’re negotiating with reports to a vice president and general manager, as you do. If not, break off contract negotiations until the customer gives us someone at your level. We’ll negotiate this at my level, if necessary.”
Source: John Wiley & Sons Inc
Gus Bell: “Okay, I’II take your word for it. I have my own checklist for contract negotiations. I want you to come back with a guaranteed fee of $1.6 million for our stockholders. Have you worked out the possible situations based on the negotiated costs?”
Analyse the various types of Gantt charts Gus bell and Jeff can use to schedule preparations for the above negotiation.
In: Operations Management
Nelson, Inc. hedges 50% of their translation exposure one calendar quarter in advance, and rolls the contracts when they mature. Currently 1st quarter net income is projected to be 125 million Canadian dollars. The current spot rate is .98 US dollars per Canadian dollar, and the forward rate to March 31, 2011, the end of 1st quarter, is .987 US dollars per Canadian dollar. On 3/31/2011 the spot rate is now 1.045 US dollars per Canadian dollar.
(a) Explain how you would put in place a hedge on 50% of the forecasted net income.
(b) On 3/31 what do you now need to do?
(c) What is your total translated net income from the Canadian subsidiary including the impact of the hedge on 3/31/2011?
In: Finance
Ohio Inc. has a global beta of 1.6 and its debt-to-equity ratio is 0.6. The risk-free rate is 3.2% and the expected global market risk premium is 9%. Although Ohio is a US firm, it issued Swiss Franc (SF) denominated bond and converted SF to US dollar. The semi-annual interest payment is made in SF. The coupon rate is 8%, the price of the bond is SF1020, the face value is SF1,000, and the bond matures in 15 years. The exchange rate is expected to move from SF0.9400/$ to SF0.9200/$. Ohio’s tax rate is 40%.
a. What’s Ohio’s SF cost of debt? ____________________
b. What’s your best estimate of Ohio’s US dollar cost of debt? ______
c. What’s Ohio’s cost of equity? __________________
d. What’s Ohio’s WACC? ___________________
In: Finance
A company that manufactures and sells consumer video cameras sells two versions of their popular hard disk camera, a basic camera for $500, and a deluxe version for $1200. About 55% of customers select the basic camera. Of those, 30% purchase the extended warranty for an additional $100. Of the people who buy the deluxe version, 50% purchase the extended warranty. Complete parts a through d below. a) Sketch the probability tree for total purchases. Warranty 0.3 Basic and Warranty 0.165 Basic 0.55 No Warranty 0.7 Basic and No Warranty 0.385 Warranty 0.5 Deluxe and Warranty 0.225 Deluxe 0.45 No Warranty 0.5 Deluxe and No Warranty 0.225 (Type integers or decimals.) b) What is the percentage of customers who buy an extended warranty? 39% (Type an integer or a decimal.) c) What is the expected revenue of the company from a camera purchase (including warranty if applicable)? The expected revenue from a camera purchase is $ nothing. (Type an integer or a decimal.) d) Given that a customer purchases an extended warranty, what is the probability that he or she bought the deluxe version? The probability is nothing. (Round to three decimal places as needed.)
In: Statistics and Probability
For the three prices mentioned above (wholesale price, MSRP, and retail/selling price) describe how much market power an individual car dealership would have in setting each price. In terms of just the retail/selling price, how might an individual car dealership’s potential market power be affected by the presence of other car dealerships in town? (E.g., a small town that has one dealership vs. a larger city where several car dealerships usually cluster in a certain area).
Given that car dealerships always ensure that the retail/selling price exceeds the wholesale price, such that customers pay more for the car than the dealership itself does, why do customers continue using car dealerships instead of purchasing the car directly from the manufacturer at its factory?
In: Economics