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Get college assignment help at uniessay writers Cost of debt using both methods (YTM and the approximation formula) Currently, Warren Industries can sell 20-year, $1,000-par-value bonds paying annual interest at a 11% coupon rate. Because current market rates for similar bonds are just under 11%, Warren can sell its bonds for $970 each; Warren will incur flotation costs of $25 per bond. The firm in the 23% tax bracket. a. Find the net proceeds from the sale of the bond, N- b. Calculate the bond’s yield to maturity (YTM) to estimate the before-tax and after-tax costs of debt c. Use the approximation formula to estimate the before-tax and after-tax costs of debt.

A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various countries in whatever proportions she finds desirable. Results for a given month are contained in the following table: Weight In Manager’s Weight Manager’s Return Return of Stock Index Country MSCI Index in Country for That Country U.K 0.34 0.34 258 158 Japan 0.47 0.2 17 17 U.S. 0.18 0.17 10 13 Germany 0.01 0.29 7 15 a. Calculate the total value added of all the manager’s decisions this period. (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.) Added value % b. Calculate the value added (or subtracted) by her country allocation decisions. (Do not round intermediate calculations. Round ydur answer to 2 decimal places. Negative amount should be indicated by a minus sign.) Contribution of country allocation % c. Calculate the value added from her stock selection ability within countries. (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.) Contribution of stock selection

A(n) ______ is an elevated ridge of cerebral tissue. Inward folds of cerebral tissue are called _______ or ______. Gray matter is composed of _____. white matter is composed of ______. A fiber tract that provides for communication between different parts of the CNS is called _____, whereas one that carries impulses between periphery and CNS areas is called a(n)______. Nuclei deep within the cerebral hemisphere white matter are collectively call the ______

Suppose a U.S. investor wishes to invest in a British firm currently selling for £25 per share. The investor has $14,400 to invest, and the current exchange rate is $2/E a. How many shares can the investor purchase? (Round your answer to the nearest whole number.) Number of shares 288 b. Fill in the table below for dollar-denominated rates of return after one year in each of the nine scenarios (three possible share prices denominated in pounds times three possible exchange rates). (Round your answers to 2 decimal places. Leave no cells blank be certain to enter “O” wherever required. Negative amounts should be indicated by a minus sign.) Ret ited eturn (%) Price Share (E) Dollar-Denominated Return (%) for Year-End Exchange Rate Poun $1.70/E $2.00/E $2.30/E 21 0% % % % 26 % % % % 31 % % % %

Question 3 (10 marks) All Sports Ltd supplies a wide range of sporting goods including Rugby League Balls. All Sports Ltd derives Australian sourced income for the current tax year comprising net income from trading of $60,000, franked distribution from public companies amounting to $21,000, (carying an imputation credit of $9,000). unranked distributions from resident private companies amounting to $16,000 and rental income of $4,000. Required: a) Calculate the net tax pavable by All Soorts Ltd for the year ended 30 June 2019. (6 marks) b) What will be the effect, it any, on the company’s franking accounts as a result of receiving the dividends? (4 marks) (10 marks) John Smith is a 39-year-old mator mechanic. He was travelling to work when Question 4 he was involved in a car accident in July 2018, Because of the accident, John is seriously injured. After eight weeks’ hospitalisation, he is declared permanently incapable of continuing her employment. During 2018/2019 tax year he received the following sums: Social seçurity disability support pension for eight weeks: $1,286. i Guaranteed sum under an insurance policy for loss of a leg: $120,000. ii Sick pay supplementation by employer for eight weeks of $4,000. Proceeds from private sickness and accident policy -eight weeks at iv. $530 per week totalled: $4,240. Gratuity on retirement due to incapacity by employer: $20,000. Out of court settlement by third party insurance company of driver of V. vi. other car involved in the car accident: $340,000. And Required: Advice John Smith as to whether any of the above amounts are assessable.

Suppose a U.S. investor wishes to invest in a British firm currently selling for £40 per share. The investor has $12,000 to invest, and the current exchange rate is $2/E. Consider three possible prices per share at £39, £44, and £49 after 1 year. Also, consider three possible exchange rates at $1.6/£, $2/E , and $2.4/E after 1 year. Calculate the standard deviation of both the pound- and dollar-denominated rates of return if each of the nine outcomes (three possible prices per share in pounds times three possible exchange rates) is equally likely. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Standard deviation of pound-denominated return Standard deviation of dollar-denominated retun %

If the current exchange rate is $1.70/E, the one-year forward exchange rate is $1.80/E, and the interest rate on British government bills is 5% per year, what risk-free dollar-denominated return can be locked in by investing in the British bills? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Risk-free dollar-denominated return %

Risk and probability Micro-Pub, Inc., is considering the purchase of one of two microfilm cameras, R and S. Both should provide benefits over a 10-year period, and Answered: Refer to the figure below Use the estimated e… ement has constructed the following table of estimates of rates of returm and probabilities for pessimistic, most likely, and optimistic results: a. Determine the range for the rate of return for each of the two cameras. b. Determine the value of the expected return for each camera. c. Which camera purchase is riskier? Why? a. The range for the rate of return for camera R is%. (Round to the nearest whole number.) Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Camera R Camera S Probability Amount Probability Amount $3,000 Initial investment $3,000 1.00 1.00 Annual rate of return Pessimistic 23% 0.22 22% 0.24 Most likely Optimistic 28% 0.51 25% 0.54 35% 0.27 32% 0.22 Print Done parts remaining Clear All Check Answer

Question A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return|Standard Deviation Stock fund (S) 15% 32% Bond fund (B) 23 9 The correlation between the fund returns is .15. Tabulate and draw the investment opportunity set of the two risky funds. Use investment proportions for the stock fund of 0% to 100% in increments of 20%. What expected return and standard deviation does your graph show for the minimum-variance portfolio?

Portfolio betas Personal Finance Problem Rose Berry is attempting to evaluate two possible portfolios, which consist of the same five assets held in different using beta to compare the risks of the portfolios, so she has gathered the data shown the following table: proportions. She is particularly interested a. Calculate the betas for portfolios A and B. b. Compare the risks of these portfolios to the market as well as to each other. Which portfolio is more risky? four decimal places.) a. The beta for portfolio A is (Round Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Portfolio weights Asset Asset beta Portfolio B Portfolio A 1.17 20% 25% 1 2 0.71 35% 5% 3 1.87 15% 40% 15% 4 1.56 15% 0.56 15% 15% 5 100% 100% Totals Print Done Enter your answer in the answer box and then click Check Ans

Get college assignment help at uniessay writers Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Market Risk-free return, rm Beta, b rate, RE 1.2 13% 10% . (Round to two decimal places.) The required return for the asset is

Oceanography Describe how changes in the temperature and salinity of seawater affect density. Describe the mechanisms that create surface currents, deep-ocean (thermohaline) currents, upwellings, tides, and seiche. a few sentence for answer will be enough. not a essay

19 CASE Worldwide Paper Company In December 2006, Bob Prescott, the controller for the Blue Ridge Mill, was consid- ering the addition of a new primary benefits: to eliminate the need to purchase shortwood from an outside sup- plier and create the opportunity to sell shortwood on the open market as a ne ket for Worldwide Paper Company (WPC). The new woodyard would allow the Blue Ridge Mill not only to reduce its operating costs but also to increase its revenues. The proposed woodyard utilized new technology that allowed tree-length logs, called long wood, to be processed directly, whereas the current process required shortwood, which had to be purchased from the Shenandoah Mill. This nearby mill, owned by petitor, had excess capacity that allowed it to produce more shortwood than it needed for its own pulp production. The excess was sold to several different mills, including the Blue Ridge Mill. Thus adding the new longwood equipment would mean that on-site longwood woodyard. The addition would have two C a com- Prescott would no longer need to use the Shenandoah Mill as a shortwood supplier and that the Blue Ridge Mill would instead compete with the Shenandoah Mill by selling on the shortwood market. The question for Prescott was whether these expected benefits were enough to justify the $18 million capital outlay plus the incremental investment in working capital over the six-year life of the investment. Construction would start within a few months, and the investment outlay would be spent over two calendar years: $16 million in 2007 and the remaining $2 million in 2008. When the new woodyard began operating in 2008, it would significantly reduce the operating costs of the mill. These operating savings would come mostly from the difference in the cost of producing shortwood on-site versus buying it on the open mar- ket and were estimated to be $2.0 million for 2008 and $3.5 million per year thereafter. Prescott also planned on taking advantage of the excess production capacity afforded by the new facility by selling shortwood on the open market as soon as pos- sible. For 2008, he expected to show revenues of approximately $4 million, as the facility came on-line and began to break into the new market. He expected shortwood sales to reach $10 million in 2009 and continue at the $10 million level through 2013. C This case was prepared by Professor Kenneth M. Eades and is intended for illustrative purposes only. Copyright O 2002 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com. No part of this publica- tion may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means-electronic, mechanical, photocopying, recording, or otherwise-without the permission of the Darden School Foundation. Rev. 9/10. 285 Part Four Capital Budgeting and Resource Allocation 286 Prescott estimated that the cost of goods sold (before including depreciation expenses) would be 75% of revenues, and SG

eBook Carnes Cosmetics Co.’s stock price is $49, and it recently paid a $1.50 dividend. This dividend is expected to grow by 21% for the next 3 years, then grow forever ata constant rate, g; and rs 12%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places. % Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 – T)] for 2020 is expected to be $600 million. The depreciation expense for 2020 is expected to be $70 million. The capital expenditures for 2020 are expected to be $250 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 3% per year. The required return on equity is 16% The WACC is 12%. The firm has $202 million of non-operating assets. The market value of the company’s debt is $2.965 billion. 110 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company’s stock price today? Do not round intermediate calculations. Round your answer to the nearest cent.

Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFS) during the next 3 years, after which FCF is expected to grow at a constant 8 % rate. Dantzler’s WACC is 12% . Ofc Year 0 1 2 3 FCF ($ millions) -$17 $20 $55 a. What is Dantzler’s horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million b. What is the firm’s market value today? Assume that Dantzler has zero non-operating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million Suppose Dantzler has $151.90 million of debt and 22 million shares of stock outstanding. What is your estimate of the current price per share? Write out your answer completely. For example, 0.00025 million should be entered as 250. Do not round intermediate calculations. Round your answer to the nearest cent. C. You are considering an investment in Justus Corporation’s stock, which is expected to pay a dividend of $1.50 a share at the end of the year (D1 $1.50) and has a beta of 0.9. The risk- free rate is 5.9%, and the market risk premium is 4.5%. Justus currently sells for $30.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is P3?) Do not round intermediate calculations. Round your answer to the nearest cent.

19 CASE Worldwide Paper Company In December 2006, Bob Prescott, the controller for the Blue Ridge Mill, was consid- ering the addition of a new primary benefits: to eliminate the need to purchase shortwood from an outside sup- plier and create the opportunity to sell shortwood on the open market as a ne ket for Worldwide Paper Company (WPC). The new woodyard would allow the Blue Ridge Mill not only to reduce its operating costs but also to increase its revenues. The proposed woodyard utilized new technology that allowed tree-length logs, called long wood, to be processed directly, whereas the current process required shortwood, which had to be purchased from the Shenandoah Mill. This nearby mill, owned by petitor, had excess capacity that allowed it to produce more shortwood than it needed for its own pulp production. The excess was sold to several different mills, including the Blue Ridge Mill. Thus adding the new longwood equipment would mean that on-site longwood woodyard. The addition would have two C a com- Prescott would no longer need to use the Shenandoah Mill as a shortwood supplier and that the Blue Ridge Mill would instead compete with the Shenandoah Mill by selling on the shortwood market. The question for Prescott was whether these expected benefits were enough to justify the $18 million capital outlay plus the incremental investment in working capital over the six-year life of the investment. Construction would start within a few months, and the investment outlay would be spent over two calendar years: $16 million in 2007 and the remaining $2 million in 2008. When the new woodyard began operating in 2008, it would significantly reduce the operating costs of the mill. These operating savings would come mostly from the difference in the cost of producing shortwood on-site versus buying it on the open mar- ket and were estimated to be $2.0 million for 2008 and $3.5 million per year thereafter. Prescott also planned on taking advantage of the excess production capacity afforded by the new facility by selling shortwood on the open market as soon as pos- sible. For 2008, he expected to show revenues of approximately $4 million, as the facility came on-line and began to break into the new market. He expected shortwood sales to reach $10 million in 2009 and continue at the $10 million level through 2013. C This case was prepared by Professor Kenneth M. Eades and is intended for illustrative purposes only. Copyright O 2002 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com. No part of this publica- tion may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means-electronic, mechanical, photocopying, recording, or otherwise-without the permission of the Darden School Foundation. Rev. 9/10. 285 Part Four Capital Budgeting and Resource Allocation 286 Prescott estimated that the cost of goods sold (before including depreciation expenses) would be 75% of revenues, and SG

Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF is expected to grow at a constant rate of 4% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 11 %. If Scampini has 60 million shares of stock outstanding, what is the stock’s value per share? Do not round intermediate calculations. Round your answer to the nearest cent. O Each share of common stock is worth $ according to the corporate valuation model. Holt Enterprises recently paid a dividend, Do, of $4.00. It expects to have nonconstant growth of 21% for 2 years followed by a constant rate of 7% thereafter. The firm’s required return is 18%. a. How far away is the horizon date? I. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2. II. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2. I. The terminal, or horizon, date is infinity since common stocks do not have a maturity date. IV. The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero. V. The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero. -Select- b. What is the firm’s horizon, or continuing, value? Do not round intermediate calculations. Round your answer to the nearest cent. $ C. What is the firm’s intrinsic value today, Po ? Do not round intermed iate calculations. Round your answer to the nearest cent.

Consider the following information: Rate of Return If State Occurs Probability of State of State of Economy Stock A Stock B Stock C Economy Boom 15 35 .45 .25 Good .19 16 10 60 .20 Poor -03 -.06 -.05 Bust 05 -13 -31 -08 Your portfolio is invested 28 percent each in A and C, and 44 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected return a. b-1. Variance b-2.Standard deviation

19 CASE Worldwide Paper Company In December 2006, Bob Prescott, the controller for the Blue Ridge Mill, was consid- ering the addition of a new primary benefits: to eliminate the need to purchase shortwood from an outside sup- plier and create the opportunity to sell shortwood on the open market as a ne ket for Worldwide Paper Company (WPC). The new woodyard would allow the Blue Ridge Mill not only to reduce its operating costs but also to increase its revenues. The proposed woodyard utilized new technology that allowed tree-length logs, called long wood, to be processed directly, whereas the current process required shortwood, which had to be purchased from the Shenandoah Mill. This nearby mill, owned by petitor, had excess capacity that allowed it to produce more shortwood than it needed for its own pulp production. The excess was sold to several different mills, including the Blue Ridge Mill. Thus adding the new longwood equipment would mean that on-site longwood woodyard. The addition would have two C a com- Prescott would no longer need to use the Shenandoah Mill as a shortwood supplier and that the Blue Ridge Mill would instead compete with the Shenandoah Mill by selling on the shortwood market. The question for Prescott was whether these expected benefits were enough to justify the $18 million capital outlay plus the incremental investment in working capital over the six-year life of the investment. Construction would start within a few months, and the investment outlay would be spent over two calendar years: $16 million in 2007 and the remaining $2 million in 2008. When the new woodyard began operating in 2008, it would significantly reduce the operating costs of the mill. These operating savings would come mostly from the difference in the cost of producing shortwood on-site versus buying it on the open mar- ket and were estimated to be $2.0 million for 2008 and $3.5 million per year thereafter. Prescott also planned on taking advantage of the excess production capacity afforded by the new facility by selling shortwood on the open market as soon as pos- sible. For 2008, he expected to show revenues of approximately $4 million, as the facility came on-line and began to break into the new market. He expected shortwood sales to reach $10 million in 2009 and continue at the $10 million level through 2013. C This case was prepared by Professor Kenneth M. Eades and is intended for illustrative purposes only. Copyright O 2002 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com. No part of this publica- tion may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means-electronic, mechanical, photocopying, recording, or otherwise-without the permission of the Darden School Foundation. Rev. 9/10. 285 Part Four Capital Budgeting and Resource Allocation 286 Prescott estimated that the cost of goods sold (before including depreciation expenses) would be 75% of revenues, and SG

Question 13: The centers or sections allow: a) Encrypt indirect costs to impute them later to the products. b) Cipher indirect costs to subsequently impute them to other centers. c) Establish a responsible for the center to control the costs of the same. d) Cipher direct production costs to be subsequently imputed to the income statement.

Cost of debt using both methods (YTM and the approximation formula) Currently, Warren Industries can sell 20-year, $1,000-par-value bonds paying annual interest at a 11% coupon rate. Because current market rates for similar bonds are just under 11%, Warren can sell its bonds for $970 each; Warren will incur flotation costs of $25 per bond. The firm in the 23% tax bracket. a. Find the net proceeds from the sale of the bond, N- b. Calculate the bond’s yield to maturity (YTM) to estimate the before-tax and after-tax costs of debt c. Use the approximation formula to estimate the before-tax and after-tax costs of debt.

The post Question: Cost Of Debt Using Both Methods (YTM And The Approximation Formula) Currently, Warren Industries Can Sell 20-year, $1,000-par-value Bonds Paying Annual Interest At A 11% Coupon Rate. Because Current Market Rates For Similar Bonds Are Just Under 11%, Warren Can Sell Its Bonds For $970 Each; Warren Will Incur Flotation Costs Of $25 Per Bond. The Firm … appeared first on uniessay writers.

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November 3, 2019