over other types of firms. One of them is the unlimited liability.Answer | | | | | Selected Answer: | False | Correct Answer: | False | | | | | * Question 4 1 out of 1 points | | | Two important financing decisions for a corporate financial manager are debt policy decision and dividend policy decision. Debt policy asks what level of debt is best for the firm. The dividend policy asks what dividend payout ratio is best for the firm.Answer | | | | | Selected Answer: |
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PV = C / (r – g) PV = $175‚000 / (.10 – .035) PV = $2‚692‚307.69 It is important to recognize that when dealing with annuities or perpetuities‚ the present value equation calculates the present value one period before the first payment. In this case‚ since the first payment is in two years‚ we have calculated the present value one year from now. To find the value today‚ we simply discount this value as a lump sum. Doing so‚ we find the value of
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Mini Case Chapter 11 BUS 401 Principles of Finance Lisa Parker Mini Case 11 Chapter 11 I am aware that this is my new position as assistant financial analyst at Caledonia Products and that I am asked to consider the introduction of a new product into the company. My job will be to analyze the information you require in depth with research regarding my answer. Let it be known that I will have put every ounce of my knowledge into this assignment to make this experience one for the record books
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1(b) How is the $25‚000 treated for purposes of Federal tax income? The $25‚000 you received as an advanced for expenses two years ago are considered as income. The advance would not have been considered as a deductible expense behind the matching principle. The current year that the $25‚000 was reimbursed‚ the revenue less than the expense would be equal to zero. Therefore‚ there would be no net income to report as taxable income. 1(c) What is your determination regarding reducing the taxable amount
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TUFS. The system had turned into a nightmare in its first few months of operation. Now his job was on the line. What was supposed to have brought efficiency to the underwriting process and new opportunities for top-line growth had become a major corporate money pit. TUFS was still eating up the vast majority of Northern’s IT budget and resources to fix the underwriting errors that kept appearing‚ and resistance to the system had grown from sniping and grumbling into calls for Martin’s head. "No wonder
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Solutions Guide: Please reword the answers to essay type parts so as to guarantee that your answer is an original. Do not submit as your own. Chapter 9: Exercises 9-4‚ 9-7‚ 9-8‚ 9-9‚ 9-11‚ 9-12‚ 9-14‚ 9-16 (pages 347-348) • Problems 9-7‚ 9-12‚ 9-17 (pages 351-355) EXERCISE 9-4. Using Present Value Tables [LO 1] What is the present value of $600 per year for five years if the required return is 10 percent (answer using Table 2 in Appendix B). Cash Present Value Flow Factor Total
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Case: Jones Blair Company Question: 1. What share does Jones Blair have of the rural household market segment? Rural professional market? Answer: Rural Household Market Segment 14.6% Rural Professional Market Segment 56.3% Rationale: Household Professional TOTAL DFW (non-rural) $1‚800‚000/$33‚600‚000 = 5.4% $4‚200‚000/$14‚400‚000 = 29.2% $6‚000‚000/$48‚000‚000 = 12.5% Non-DFW (rural) $4‚200‚000/$28‚800‚000 = 14.6% $1‚800‚000/$3‚200‚000 = 56.3% $6‚000‚000/$32‚000‚000
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Final Exam Practice Problems 1. Firm ABC’s only outstanding debt is $100‚000 worth of coupon bond (market value). Its yield to maturity is 8%. Given that its tax rate is 40%‚ what is its effective cost of debt? Effective cost of debt = cost of debt * (1-tax rate) =8%*(1-40%)=4.8% 2. Firm ABC has a stock currently traded at $20. The next year’s dividend will be $0.20. The dividend growth rate is forecasted to be 6% forever. Risk-free rate is 3%‚ and market risk premium is 4%. Assume that Constant
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Solutions to Chapter 10 Introduction to Risk‚ Return‚ and the Opportunity Cost of Capital capital gain + dividend ($44 − $40) + $2 = = 0.15 = 15.0% initial share price $40 1. Rate of return = Dividend yield = dividend/initial share price = $2/$40 = 0.05 = 5% Capital gains yield = capital gain/initial share price = $4/$40 = 0.10 = 10% 2. Dividend yield = $2/$40 = 0.05 = 5% The dividend yield is unaffected; it is based on the initial price‚ not the final price. Capital gain = $36 – $40
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| Corporate Finance2 CreditsBU.231.620.62Thursday 6pm – 9pm‚ 10/18/2012--12/13/2012Fall2‚ 2012Columbia‚ Columbia Center‚ 218 | Instructor Shabnam Mousavi Contact Information Phone Number: (410)234-9450 E-mail Address: shabnam@jhu.edu Office Hours Monday/Thursday 10am-noon Required Text and Learning Materials (1) Berk‚ J. and P. DeMarzo. 2007. Corporate Finance. 2nd Edition. Pearson‚ Addison-Wesley with MyLab access. The ISBN is 0-13-295-040-5. (2) Lecture Notes. The lecture
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