Brooks enterprises has never paid a dividend. free cash flow is

Chapter 13 Problem 13-6, 13-7, 13-8

 

13-6:

 

Brooks Enterprises has never remunerated a dividend. Unobstructed cardinal career is schemeed to be

$80,000 and $100,000 for the present 2 years, respectively; forthcoming the promote year, FCF is look-fored to expand at a true reprove of 8%. The company’s weighted mediocre consume of cardinal is 12%.

 

a.     

What is the final, or horizon, love of operations? (Hint: Confront the love of all unobstructed cardinal careers past Year 2 discounted tail to Year 2.)

b.   Calculate the love of Brooks’s operations.

 

13- 7

 

Dozier Corporation is a fixed expanding supplier of business-post products. Analysts scheme the forthcoming unobstructed cardinal careers (FCFs) during the present 3 years, forthcoming which FCF is look-fored to expand at a true 7% reprove. Dozier’s weighted mediocre consume of cardinal is WACC = 13%.

                      

YEAR

                                                              1        2         3        

            Unobstructed Cardinal Career ($millions)     -$20     $30      $40

 

a.)   

What is Dozier’s final, or horizon, love? (Hint: Confront the love of all unobstructed cardinal careers past year 3 discounted tail to Year 3.)

 

b.)   

What is the running love of operations for Dozier?

 

c.)   

Suppose Dozier has $10 pet in retail securities, $100 pet in debit, and 10 pet divides of store. What is the true figure per divide?

 

 

13.8

 

The pit shuffle of Hutter Amalgamated is shown adown. If the 12/31/2010 love of operations is $756 pet, what is the 12/31/2010 true traffic love of equity?

 

Assets                                                             Liabilities and Equity

 

Cash                                      $20.0               Accounts Payable              $19.0                               

Marketable securities                77.0               Notes Payable                      151.0

Accounts receivable                 100.0                  Accruals                               51.0

Inventories                               200.0                   Total running liabilities  $221.0

           Total running assets      $397.0                  Covet tidings bonds               190.0

Net Set and equipment           279.0                        Preferred store                    76.0

                                                                        Common store

                                                                       (par plus PIC)                       100.0

                                                                       Retained acquireings                89.0

                                                                          Spiritless equity                 $189.0

Total Assets                            $676.0             Total liabilities                    $676.0

 

 

 

Chapter 4 Problem 4-4, 4-5, 4-20, 4-22

 

4-4:

If you shelter coin today in an recital that pays 6.5% annual cause, how covet conquer it select to wrap your coin?

4-5:

You entertain $42,180.53 in a brokerage recital, and you guile to shelter an concomitant $5,000 at the end of every forthcoming year until your recital totals $250,000. You look-for to acquire 12% annually on the recital. How numerous years conquer it select to arrive-at your view?

4-20:

a. Set up an amortization register for a $25,000 advance to be reremunerated in resembling instalments at the end of each of the present 5 years. The cause reprove is 10%.

b. How comprehensive must each annual cancelment be if the advance is for $50,000? Assume that the cause reprove scum at 10% and that the advance is calm?} remunerated off aggravate 5 years.

c. How comprehensive must each cancelment be if the advance is for $50,000, the cause reprove is 10%, and the advance is remunerated off in resembling installments at the end of each of the present 10 years? This advance is for the identical quantity as the advance in keep-akeep-amultiply b, but the cancelments are diffuse out aggravate twice as numerous periods. Why are these cancelments not half as comprehensive as the cancelments on the advance in keep-akeep-amultiply b?

 

4-22:

Washington-Pacific invested $4 pet to buy a confide of fix and guilet some infantine delayer trees. The trees can be harvested in 10 years, at which span W-P guiles to vend the grove at an look-fored figure of $8 pet. What is W-P’s look-fored reprove of bear?

 

 

 

 

Chapter 5 Problem 5-15, 5-21

5-15;

 

Absalom Motors’s 14% coupon reprove, semiannual cancelment, $1,000 par love bonds that aged in 30 years are oleable 5 years from now at a figure of $1,050. The bonds vend at a figure of $1,353.54, and the bear flexion is downright. Assuming that cause reproves in the distribution are look-fored to accrue at their running smooth, what is the best love of the trifling cause reprove on new bonds?

 

5-21:

Suppose Hillard Manufacturing sold an children of bonds delay a 10-year manliness, a $1,000 par love, a 10% coupon reprove, and semiannual cause cancelments.

a.  Two years forthcoming the bonds were childrend, the going reprove of cause on bonds such as these level to 6%. At what figure would the bonds vend?

b.  Judge that, 2 years forthcoming the primal aid, the going cause reprove had erect to 12%. At what figure would the bonds vend?

c.  Suppose, as in keep-akeep-amultiply a, that cause reproves level to 6%, 2 years forthcoming the children conclusion. Judge excite that the cause reprove accrueed at 6% for the present 8 years. What would gravitate to the figure of the bonds aggravate span?

 

Chapter 6 Problem 6-4, 6-10

 

6-4:

 

A store's bears entertain the forthcoming distribution: 

Demand for              Probability of      Rate of bear 
Company's               this Demand        if this demand 
Products                   Occuring             Occurs 

Weak                       0.1                 (50%) 
Below Average       0.2                  (5) 
Average                  0.4                  16 
Above mediocre       0.2                  25 
Strong                     0.1                  60 
                                1.0
Calculate the store's look-fored bear, trutination intermission, and coefficient of deviation.

 

 

6-10:

You entertain a $2 pet portfolio consisting of a $100,000 cannonade in each of 20different stores. The portfolio has a beta of 1.1. You are because vending $100,000 scold of one store delay a beta of 0.9 and using the allowance to alienation another store delay a beta of 1.4. What conquer the portfolio’s new beta be forthcoming these transactions?

 

Chapter 7 Problem 7-4, 7-10

 

7-4:

Nick’s Enchiladas Incorporated has preferred store uncollected that pays a dividend of $5 at the end of each year. The preferred vends for $50 a divide. What is the store’s required reprove of bear?

 

7-10:

The beta coefficient for Store C is bC = 0.4 and that for Store D is bD = −0.5. (Stock D’s beta is disclaiming, indicating that its reprove of bear rises whenever bears on most other stores gravitate. There are very few disclaiming-beta stores, although collation employment and gold mining stores are rarely cited as examples.)

 

a.      

If the risk-unobstructed reprove is 9% and the look-fored reprove of bear on an mediocre store is 13%, what are the required reproves of bear on Stocks C and D?

 

 

b.     

For Store C, judge the running figure, P0, is $25; the present look-fored dividend,D1, is $1.50; and the store’s look-fored true expandth reprove is 4%. Is the store in makeweight? Explain, and explain what would gravitate if the store were not in makeweight.

 

 

Chapter 8 Problem 8-4, 8-5, 8-6

8-4:

The running figure of a store is $33, and the annual risk-unobstructed reprove is 6%. A ole discretion delay a touch figure of $32 and delay 1 year until inertness has a running love of $6.56. What is the love of a put discretion written on the store delay the identical employment figure and inertness conclusion as the ole discretion?

 

8-5: 

Use the Black-Scholes Model to confront the figure for a ole discretion delay the forthcoming inputs: (1) running store figure is $30, (2) touch figure is $35, (3) span to inertness is 4 months, (4) annualized risk-unobstructed reprove is 5%, and (5) antagonism of store bear is 0.25.

8-6:

The running figure of a store is $20. In 1 year, the figure conquer be either $26 or $16. The annual risk-unobstructed reprove is 5%. Confront the figure of a ole discretion on the store that has a touch figure of $21 and that expires in 1 year. (Hint: Use daily compounding.)

 

Chapter 9 Problem 9-3, 9-8, 9-13

 

9-3:

 

Duggins Veterinary Supplies can children unceasing preferred store at a figure of $50 a divide delay an annual dividend of $4.50 a divide. Ignoring flotation consumes, what is the company’s consume of preferred store, rps?

 

9-8;

David Ortiz Motors has a target cardinal texture of 40% debit and 60% equity. The bear to manliness on the company’s uncollected bonds is 9%, and the company’s tax reprove is 40%. Ortiz’s CFO has congenial the company’s WACC as 9.96%. What is the company’s consume of equity cardinal?

 

9-13:

Messman Manufacturing conquer children spiritless store to the generally-known for $30. The look-fored dividend and the expandth in dividends are $3.00 per divide and 5%, respectively. If the flotation consume is 10% of the children’s entire allowance, what is the consume of apparent equity, re?

 

 

 

BA 350 Week 8 Final Exam

 

BA/350 Week 8 Final Exam

 

BA/350 Week 8 Final

 

 

BA/350 Week 8 Chapter 13 Problem 13-6, 13-7, 13-8

BA 350 Week 8 Chapter 4 Problem 4-4, 4-5, 4-20, 4-22

BA350 Week 8 Chapter 5 Problem 5-15, 5-21

BA 350 Week 8 Chapter 6 Problem 6-4, 6-10

BA350 Week 8 Chapter 7 Problem 7-4, 7-10

BA/350 Week 8 Chapter 8 Problem 8-4, 8-5, 8-6

 

BA 350 Week 8 Chapter 9 Problem 9-3, 9-8, 9-13

 

 

U can too download BA/350 Week 8 Case Study .Just click on adown Link

 

 

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