Green Goose Automation Company currently has no debt in its capital structure, but it is considering using some debt and reducing its outstanding equity. The firm’s unlevered beta is 1.15, and its cost of equity is 12.70%. Because the firm has no debt in its capital structure, its weighted average cost of capital (WACC) also equals 12.70%. The risk-free rate of interest (rRFrRF) is 3.5%, and the market risk premium (RP) is 8%. Green Goose’s marginal tax rate is 30%.

Green Goose is examining how different levels of debt will affect its costs of debt and equity, as well as its WACC. The firm has collected the financial information that follows to analyze its weighted average cost of capital (WACC). Complete the following table.

Projecting NOPAT and NOA Using Parsimonious Forecasting Method

Following are Cisco Systems’ sales, net operating profit after tax (NOPAT), and net operating assets (NOA) for its year ended July 31, 2016 ($ millions).

Use the parsimonious method to forecast Cisco’s sales, NOPAT, and NOA for years 2017 through 2020 using the following assumptions.

Rounding instructions:

Round total revenue "unrounded" to two decimal places.

Round total revenue "rounded", NOPAT and NOA answers to the nearest whole number.

For NOPAT and NOA computations, use total revenue "rounded".

1. Risk is

a. The probability that return will be less than expected.

b. The standard deviation of the probability distribution of returns.

c. Variability in return

d. All of the above.

2. A stock with a beta of 1.0 will :

a. always generate a return equal to the market average

b. always generate a return that is close to the market average.

c. always generate a return that is at least as the market average.

d. all of the above are correct.

e. none of the above are correct.

3. Syncor borrowed $ 800,000 payable over 5 years, with an interest rate of 9 percent per annum on the unpaid balance. If the loan is to be repaid in 5 equal, end of year payments, what is the total amount of interest paid on this loan?

a. 205656

b. 228278

c. 201753

d. 255131

4. Calculate the required rate of return for Mercury, Inc.. assuming that (1) investors except a 4.0% rate of inflation in the future, (2) the real risk free rate is 3.0% (3) the market risk premium is 5.0%, (4) Mercury has a beta of 1.00 and (5) its realized rate of return has averaged 15.0% over the last 5 years.

a 10.29%

b. 10.83%

c. 11.40%

d. 12%

e. 12.6o%

4-9 Suppose you were comparing a discount merchandiser with a high-end merchandiser. Suppose further that both companies had identical ROEs. If you applied the DuPont equation to both firms, would you expect the three components to be the same for each company? If not, explain what balance sheet and income statement items might lead to the component differences.

4-10 Indicate the effects of the transactions listed in the following table on total current assets, current ratio, and net income. Use (+) to indicate an increase, (-) to indicate a decrease, and (0) to indicate either no effect or an indeterminate effect. Be prepared to state any nec- essary assumptions and assume an initial current ratio of more than 1.0. (Note: A good ac- counting background is necessary to answer some of these questions; if yours is not strong, answer just the questions you can.)  

Total Current Effect on Current Assets Ratio Net Income a.

Cash is acquired through issuance of additional common stock

f. Merchandise is sold on credit

h. A cash dividend is declared and paid
i. Cash is obtained through short-term bank loans

m. Current operating expenses are paid

q. Accounts receivable are collected

s. Merchandise is purchased on credit

(EBIT-EPS analysis) Abe Forrester and three of his friends from college have interested a group of venture capitalists in backing their business idea. The proposed operation would consist of a series of retail outlets to distribute and service a full line of vacuum cleaners and accessories. These stores would be located in​ Dallas, Houston, and San Antonio. To finance the new venture two plans have been​ proposed:

• Plan A is an​ all-common-equity structure in which ​$ 2.3 million dollars would be raised by selling 86,000 shares of common stock.

• Plan B would involve issuing ​$ 1.3 million in​ long-term bonds with an effective interest rate of 11.8 percent plus another $ 1.0 million would be raised by selling 43,000 shares of common stock. The debt funds raised under Plan B have no fixed maturity​ date, in that this amount of financial leverage is considered a permanent part of the​ firm's capital structure.

Abe and his partners plan to use a 38 percent tax rate in their​ analysis, and they have hired you on a consulting basis to do the​ following:

(Q) Find the EBIT indifference level associated with the two financing plans. (Round to the nearest​ dollar.)

Numeric responses must be either an integer (if exact) or a real number with three decimal places, with the least significant number rounded. Do not use commas. If there are units, the integer part must be between 1 and 999. Use the following units: Ohm, kOhm, mOhm resistors, etc. Conductances: S, mS, MS, etc. Voltage: V, kV, mV, MV, etc. Current: A, mA, kA, uA, nA, etc. Power: W, mW, kW, uA, pW, etc. Time: s, hrs, ks, ms, etc.

1. Voltage amplifiers are available with Avoc = 8 V / V, Rin = 1.8 kΩ, Ro = 850 Ω. With a 12 V DC power source, each amplifier consumes 1.5 mA average current.

a. How many amplifiers do you need to cascade to get at least a 1000 voltage gain with a load resistance of 1.0 kΩ?

b.What is the voltage gain Av obtained? (Respond with a rounded whole number)

c. For the cascade connection, find the open circuit voltage gain. (Respond with a rounded whole number)

d. If you have a 1.5 mV input, how efficient is the equivalent amplifier?

e. Find the transconductance of the entire circuit.

There is a cost of money. When someone loans you money, they expect to profit (maybe just by your goodwill). Notice that car dealers and others who are financing what you buy will usually show you the monthly payments, and avoid talking about the full cost with interest. It would be helpful to calculate the monthly payments given the amount loaned, the interest rate, and the number of payments you are expected to make. In this assignment, you will implement one standard formula for computing monthly payments.

Set up and run java, javac, and an IDE (Eclipse) on your computer Create a class main method variables strings mathematical operators assignment operator input/output Eclipse IDE Develop a Loan Calculator (as a Java standalone application) to calculate and display the monthly payment for a loan. The user will be asked to enter the loan amount, the interest rate, and the number of payments. The formula used for such a calculation is: ??????? = ?????????? ∗ ( ( ???????????? ??.? ) (? − (? + ???????????? ??. ? ) −????????????????) ) For example, for a loan amount of $225,000 with the APR 10% and 360 payments, the monthly payment is: ??????? = ?????? ∗ ( ( ?? ??.? ) (?.? − (?.? + ?? ??.? ) −???) ) Payment, loan amount, APR, 12.0, and 1.0 are real numbers; whereas N=number of payments is an integer. If you wish to use other formulas, please feel free to use them.

Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $30 per share and pays a dividend of $3 a share. The common stock sells for $16 per share and has a beta of 0.9. There are 1 million common shares outstanding. The market risk premium is 11%, the risk-free rate is 7%, and the firm’s tax rate is 40%.

a. What is the market debt-to-value ratio of the firm? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

b. What is University’s WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

On November 14, Thorogood Enterprises announced that the public and acrimonious battle with its current CEO had been resolved. Under the terms of the deal, the CEO would step down from his position immediately. In exchange, he was given a generous severance package. Given the information below, calculate the cumulative abnormal return (CAR) around this announcement. Assume the company has an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)