round 18

#1 Homework #5E (HPR, Annualized holding period return, Effective annual rate on investment)

Tom purchased 100 shares of Dalia Co. stock at a price of $120.72 four months ago. He sold all stocks today for $125.94. During the year the stock paid dividends of $7.97 per share. What is Tom’s effective annual rate?

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Your Answer:

#2 Homework #6F (Cost of equity financing)

The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm’s beta is 0.81. The rate on six-month T-bills is 2.11%, and the return on the S&P 500 index is 5.77%. What is the appropriate cost for retained earnings in determining the firm’s cost of capital?

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Your Answer:

#3 Homework #7A (Break-even point, Operating leverage)

The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $62.50. The variable cost per unit is $27.31, Poseidon Swim has average fixed costs per year of $5,330.

Assume that the current level of sales is 435 units. What will be the resulting percentage change in EBIT if the expect units sold to charge by -0.1? (you should calculate the degree of operating leverage first)

Round the answer to two decimal places

Your Answer

#4 Homework #7E (After-Tax cash flow from selling the old asset)

Genetic Insights Co. purchases an asset for $16,461. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $4,347.

Calculate After-Tax Cash Flow at disposal. Round the answer to two decimals.

Your Answer:

#5 Homework #8A (Lock-Box system, Cost of Trade Credit)

Book Depot Inc. Sells on terms of 2/15, net 85. What is the implicit cost of trade credit under these terms? Use a 365-day year

Round the answer to two decimal places in percentage form

Your Answer

#6 Homework #8B (Carrying Costs and Ordering Costs)

Post Card Depot, an large retailer of post cards, orders 9,993,000 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 22 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.13 per post card per year. The ordering cost is $270 per order.

What is the annual ordering cost of the post card inventory?

(Round the answer to two decimal places)

Your Answer:

#7 Homework #8C (EOQ, Average Inventory)

Cheeseburger and Taco Company purchases 16,502 boxes of cheese each year. It costs $11 to place and ship each order and $4.45 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders.

What is the annual ordering cost of the post card inventory.

Round the answer to two decimas.

Your Answer:

#8 QUIZ

3Years ago, Maxi min Inc. 30 year to maturity zero-coupon bonds with a par value of $1,000. Now the bond has a yield to maturity of 9.21 percent, compound semi-annually. What is the current price of the bond?

Round the answer to two decimal places

(you must show your work)

Your Answer

#9 Homework #3C (How much will each annual payment be (Using FV or PV))

You plan to buy the house of your dreams in 5 years. You have estimated that the price of the house will be $82,159 at that time. You are able to make equal deposits every month at the end of the month into a savings account at an annual rate of 7.77 percent, compounded monthly. How much money should you place in this savings account every month in order to accumulate the required amount to buy the house of your dreams? 

Round the answer to two decimal places.

Your Answer:

#10 3D (FV of mixed stream)

You have just purchased an investment that generates the cash flows shown below for the next four years. You are able reinvest these cash flows at 9.31 percent, compounded annually. How much is this investment worth at the end of year four?

End of year

1. $371

2. $1,178

3. $557

4. $210

Round the answer to two decimal places.

Your Answer

#11 Homework #4E (zero-coupon bond)

27 years ago, Mini Max Inc. issued 30 year to maturity zero-coupon bonds with a par value of $1,000. Now the bond has a yield to maturity of 12.27 percent, compounded semi-annually. What is the current price of the bond?

Round the answer to two decimal places.

Your Answer:

#12 Homework #4G (Bonds Quotes)

Assume that today's date is April 15, 2015. Fresh Bakery Inc. bond is an annual-coupon bond. Par value of the bond is $5,000.

Calculate the bond's current yield.

  Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Your Answer:

#13Homework#5A Value and Expected rate of return on preferred stock)

Giant Co. has issued preferred stock with a par value of $100 and an annual dividend rate of 8.66 percent, how much will you be willing to pay for one share of this preferred stock?

Round the answer to two decimals places

Your Answer

#14 Homewok #5B (Value of Common Stock, Expected Rate of return on Common Stock)

Green Company's common stock is currently selling for $80.88 per share. Last year, the company paid dividends of $1.80 per share. The projected growth at a rate of dividends for this stock is 7.42 percent. Which rate of return does the investor expect to receive on this stock if it is purchased today?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Your Answer: