MBX is a new firm that will generate free cash flows of $100 billion in year 1 and growing at a rate of 5% a year thereafter. If the MBX’ cost of capital is 10% and it has neither debt nor cash then by issuing 100 million shares the price of MBX stock will be:
| a. |
$200 per share |
|
| b. |
$10 per share |
|
| c. |
$20 per share |
|
| d. |
$100 per share |
In: Finance
Crocker and Company (CC) is a C corporation. For the year, CC reported taxable income of $566,000. At the end of the year, CC distributed all its after-tax earnings to Jimmy, the company's sole shareholder. Jimmy's marginal ordinary tax rate is 37 percent and his marginal tax rate on dividends is 23.8 percent, including the net investment income tax. What is the overall tax rate on Crocker and Company's pre-tax income?
A) 18.8%
B) 23.8%
C) 21
D) 39.8
E) 66.7
In: Finance
Consider a growing perpetuity that will pay $200 in one year. Each year after that, you will receive a payment that is 5% larger than the last payment. This pattern of payments will continue forever. If the interest rate is 10%, then the value of this perpetuity is closest to:
$1560 | ||
$3360 | ||
$4000 | ||
$2000 |
In: Finance
Borrow $100,000 with a 20 year fixed mortgage at 6%. Calculate the monthly payment if the loan is
Partially Amortizing- Lender and borrower agree to have a balance of $80,000 at maturity?
|
256.22 |
||
|
543,78 |
||
|
356.71 |
||
|
6543.69 |
In: Finance
Mr. Husker’s Tuxedos Corp. ended the year 2021 with an average collection period of 42 days. The firm’s credit sales for 2021 were $57.1 million.
What is the year-end 2021 balance in accounts receivable for Mr. Husker’s Tuxedos? (Enter your answer in dollars not in millions.)
In: Finance
You have an opportunity to invest $107,000 now in return for $79,300 in one year and $29,200 in two years. If your cost of capital is 9.1%, what is the NPV of this investment?
In: Finance
Forward Rate. a. Assume that as of today, the annualized two-year interest rate is 0.1 , while the one-year interest rate is 0.07. Assume that the liquidity premium on a two-year security is 0.003. Use this information to re-estimate the one-year forward rate. Enter the answer in decimal form using 4 decimals (e.g. 0.1234)
In: Finance
Forward Rate. Assume that as of today, the annualized interest rate on a three-year security is 0.12, while the annualized interest rate on a two-year security is 0.03. Use only this information to estimate the one-year forward rate two years from now. Enter the answer in decimal form using 4 decimals (e.g. 0.1234)
In: Finance
Forward Rate. a. Assume that as of today, the annualized two-year interest rate is 0.11 , while the one-year interest rate is 0.02. Use only this information to estimate the one-year forward rate. Enter the answer in decimal form using 4 decimals (e.g. 0.1234)
In: Finance
In: Finance