Assume that it is 2008. You purchased CSH stock for $33 one year ago and it is now selling for $44. The company has announced that it plans a $11 special dividend. You are considering whether to sell the stock now or wait to receive the dividend and then sell.
a. Assuming 2008 tax rates, what ex-dividend price of CSH will make you indifferent between selling now and waiting?
b. Suppose the capital gains tax rate is 20 % and the dividend tax rate is 38 %, what ex-dividend price would make you indifferent now?
a. Assuming 2008 tax rates, what ex-dividend price of CSH will make you indifferent between selling now and waiting?
In 2008, the capital gains tax rate is 15 % and the dividend tax rate is 15 %. The tax on a $11 capital gain is $ , and the tax on a $11 special dividend is $ . The after-tax income for both will be $ . (Round to the nearest cent.)
In: Finance
Victor is spending HKD300,000 per year and is quite satisfied with the present living lifestyle and standard. He is now 38 and plans to retire at age 60. He believes he can live up to age 85. He wants to keep 80% of the current living lifestyle and standard after retirement. Victor would like all the money for retirement to be ready when he retires. He also would like the retirement money for spending in a year to be ready at the beginning of every year. He plans to start saving for the retirement reserve with an equity unit trust fund of 10% annual rate of return. Average expected annual rate of return during his retirement period is 6%. Assume the average long term inflation is 4% p.a.
a. What is the required annual expenditure at the time when Victor retires at age 60?
b. What is the total amount of money required for 25 years after Victor’s retirement? (at the beginning of age 60)
c. How much should Victor save at the beginning of each month from now on until the age of 60 in order to meet the required amount at (c)?
In: Finance
Question 20. Consider a 2-year bond. The coupon rate of the bond is 10%, and the bond pays coupons semiannually. The bond is selling at a yield to maturity of 8.0% annually, or 4.0% semi-annually.
a. What is the duration of the bond? (12 points)
b. If the semi-annually yield changes from 4.0% to 5.0%, what is the predicted change in the price of the bond using duration? (8 points)
In: Finance
Periodic Inventory by Three Methods
The units of an item available for sale during the year were as follows:
| Jan. 1 | Inventory | 1,080 units @ $124 |
| Feb. 17 | Purchase | 1,440 units @ $125 |
| July 21 | Purchase | 1,655 units @ $126 |
| Nov. 23 | Purchase | 1,145 units @ $126 |
There are 1,220 units of the item in the physical inventory at December 31. The periodic inventory system is used.
a. Determine the inventory cost by the
first-in, first-out method.
$fill in the blank 1
b. Determine the inventory cost by the last-in,
first-out method.
$fill in the blank 2
c. Determine the inventory cost by the weighted
average cost method. Do not round intermediate calculation
and round final answer to the nearest whole dollar.
$fill in the blank 3
In: Accounting
2. To create a portfolio with a duration of 4 years using a 5 year zero coupon bond and a 2 year 6% annual coupon bond with a yield to maturity of 8%, one would have to invest______ of the portfolio value in the zero coupon bond.
In: Finance
In: Finance
Carlisle State College had the following account balances for the year ended and as of June 30, 2018. Debits are not distinguished from credits, so assume all accounts have a “normal” balance.
| Additions to permanent endowments | 400,000 |
| Auxiliary enterprise revenue | 4,200,000 |
| Capital grants and gifts | 300,000 |
| Depreciation expense | 1,400,000 |
| Employee Benefits | 1,975,000 |
| Federal grants and contracts revenue | 2,000,000 |
| Gifts | 700,000 |
| Interest on capital-related debt | 450,000 |
| Investment income | 220,000 |
| Net position, beginning of year | 11,450,000 |
| Nonexempt wages | 1,500,000 |
| Other operating expenses | 900,000 |
| Salaries-exempt staff | 2,300,000 |
| Salaries-faculty | 6,500,000 |
| Scholarship tuition and fee contra revenue | 300,000 |
| Scholarships and fellowships expense | 315,000 |
| State and local grants and contracts revenue | 900,000 |
| State appropriation for operations | 4,970,000 |
| State appropriations for capital additions | 250,000 |
| Student tuition and fee revenue | 8,450,000 |
Required
Prepare, in good form, a Statement of Revenues, Expenses, and Changes in Net Position for Carlisle State College for the year ended June 30, 2017.
PLEASE DO IN EXCELL AND START WITH OPERATING REVENUES.
In: Accounting
Suppose you want to find the nonoperating cash flow in the last year of the project. This includes the effects associated with the salvage value,cleanup and removal expenses, and working capital. The variables and values are: cash received on sale of old equipment (S) = $20,000; tax rate (T) = 0.4; book value of old equipment (B) = 5,000; before-tax cleanup and removal expenses (REX) = $15,000; and, release of net working (W) = $5,000.
What is the nonoperating cash flow in the last year of the project?
Group of answer choices
$11,000
$12,000
$10,000
$13,000
In: Finance
|
The owner of a bicycle repair shop forecasts revenues of $236,000 a year. Variable costs will be $69,000, and rental costs for the shop are $49,000 a year. Depreciation on the repair tools will be $29,000. The tax rate is 40%. |
| a. |
Calculate operating cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation tax shield approach. |
| Method | Operating Cash Flow |
| Adjusted accounting profits | $ |
| Cash inflow/cash outflow analysis | |
| Depreciation tax shield approach | |
| b. | Are the above answers equal? |
|
In: Finance
|
Pearl Corp. is expected to have an EBIT of $1,900,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $80,000, and $120,000, respectively. All are expected to grow at 15 percent per year for four years. The company currently has $10,000,000 in debt and 800,000 shares outstanding. At Year 5, you believe that the company's sales will be $13,620,000 and the appropriate price-sales ratio is 2.1. The company’s WACC is 8.4 percent and the tax rate is 21 percent. |
|
What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance