...FIN 515 UOP, FIN 515 Phoenix, FIN 515 UOPhelp, FIN 515 Week 3, FIN 515 Individual Assignment , FIN 515 Learning team Assignment, FIN 515 Product, FIN 515 A Graded , FIN 515 Summary, FIN 515 Study Guide, FIN 515 Questions , FIN 515 Answered , FIN 515 Solution, FIN 515 Final Guide, FIN 515 Final Exam, FIN 515 A++ Work, FIN 515 A Graded, FIN 515 Homework, FIN 515 help, FIN 515 week 1 DQ, FIN 515 week 2 DQ, FIN 515 week 3DQ, FIN 515 week 4 DQ, FIN 515 week 5DQ, FIN 515 week 6 DQ, FIN 515 week 1 Assignment, FIN 515 week 2 Assignment, FIN 515 week 3Assignment, FIN 515 week 4 Assignment, FIN 515 week 5 Assignment, FIN 515 All Individual and Learning Team Assignments, FIN 515 Full Course , FIN 515 Whole Class FIN 515 Entire Solution, FIN 515 University of Phoenix Learning Team Assignment, FIN 515 Checkpoint, FIN 515 All Weeks , FIN 515 Week 1-5, FIN 515 Axia College, FIN 515 online class, FIN 515 week 3DQ, FIN 515 week 4 DQ, FIN 515 week 5DQ, FIN 515 Syllabus, FIN 515 Version, FIN 515 Week 1, FIN 515 Week 2, FIN 515 Week 3, FIN 515 Week 4, FIN 515 Week 5, FIN 515 week 1 DQ, FIN 515 week 2 DQ,, FIN 515 week 2 Assignment, FIN 515 week 3Assignment, FIN 515 week 4 Assignment, FIN 515 Week 1-6, FIN 515 Assignment, FIN 515 DQs, FIN 515 Week, FIN 515 Complete Course, FIN 515 Entire Class, FIN 515 Whole Tutorial, FIN 515 Work, FIN 515 final Project, FIN 515 Material, FIN 515 tutorial, FIN 515 Complete Course...
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...Week 5 - Project Jonathan Chapman jwchapman12@gmail.com October 2, 2014 Managerial Finance FIN-515-10284 DeVry University Keller Graduate School of Management Professor Hartzog Week 5 – Project 8-23 - Bauer Industries is an automobile manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental free cash flow projections (in millions of dollars): | Year 0 | Years 1-9 | Year 10 | Revenues | | 100.0 | 100.0 | -Manufacturing expenses(other than depreciation) | | -35.0 | -35.0 | -Marketing expenses | | -10.0 | -10.0 | -Depreciation | | -15.0 | -15.0 | =EBIT | | 40.0 | 40.0 | -Taxes (35%) | | -14.0 | -14.0 | =Unlevered net income | | 26.0 | 26.0 | +Depreciation | | +15.0 | +15.0 | -Increases in net worth capital | | -5.0 | -5.0 | -Capital expenditures | -150.0 | | | +Continuation value | | | +12.0 | =Free cash flow | -150.0 | 36.0 | 48.0 | a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight trucks? NPV=150 + 36 x 1/0.12[1-1/1.12^9] + 48/1.12^10 = $57.3 million b. Based on input from the marketing department, Bauer is uncertain about its revenue forecast. In particular, management would like to examine the sensitivity of the NPV to the revenue assumptions. What...
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...Chapter 18 Capital Budgeting and Valuation with Leverage 18-4. Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $1.5 million per year, growing at a rate of 2.5% per year. Goodyear has an equity cost of capital of 8.5%, a debt cost of capital of 7%, a marginal corporate tax rate of 35%, and a debt-equity ratio of 2.6. If the plant has average risk and Goodyear plans to maintain a constant debt-equity ratio, what after-tax amount must it receive for the plant for the divestiture to be profitable? We can compute the levered value of the plant using the WACC method. Goodyear’s WACC is [pic] Therefore, [pic] A divestiture would be profitable if Goodyear received more than $47.6 million after tax. 18-5. Suppose Alcatel-Lucent has an equity cost of capital of 10%, market capitalization of $10.8 billion, and an enterprise value of $14.4 billion. Suppose Alcatel-Lucent’s debt cost of capital is 6.1% and its marginal tax rate is 35%. a. What is Alcatel-Lucent’s WACC? b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the following expected free cash flows? [pic] c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part b? a. [pic] b. Using the WACC method, the levered value of the project...
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...Towson University Department of Finance Fin331 Dr. M. Rhee 2010 Spring NAME: | | ID#: | | 1. If APR = 10%, what is the EAR (effective annual rate) for quarterly compounding? a. 10.00% b. 10.38% c. 12.36% d. 13.36% e. 15.52% Answer: b APR = Nominal rate 10.00% Periods/yr 4 EFF% =(1+(rNOM/N))N − 1 = 10.38% 2. If the current one year CD rate is 3% and the best estimate of one year CD which will be available one year from today is 5%, what is the current two year CD rate with 1% liquidity premium? a. 4.0% b. 4.5% c. 5.0% d. 5.5% e. 6.0% Answer: C (1 + 0R2 – 0.01)2 = (1.03)1 × (1.05)1 0R2 = {(1.03) × (1.05)}1/2 + 0.01 – 1 = 4.9952% ≈ 5.00% 3. Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? a. The present value of a 5-year, $250 annuity due will be lower than the PV of a similar ordinary annuity. b. A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage. c. A bank loan's nominal interest rate will always be equal to or greater than its effective annual rate. d. If an investment pays 10% interest, compounded quarterly, its effective annual rate will be greater than 10%. e. Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterly and B pays semiannually. Deposits in Bank B will...
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...CHAPTER 10 The Cost of Capital Problem solving Lidija Dedi 9-1 Problem 1: Your company’ stock sells for $50 per share, its last dividend was $2, its growth rate is a constant 5%, and the company will incur a flotation cost of 15% if it sells new common stock. What is the firm’s cost of new equity? 9-2 Problem 2: Alpha’s stock currently has a price of $50 per share and is expected to pay a year-end dividend of 2,50 per share. The dividend is expected to grow at a constant rate of 4% per year The company has insufficient retained earnings to fund capital projects and must therefore, issue new common stock. The new stock has an estimated flotation cost of $3 per share What is the company’s cost of equity capital?9-3 Problem 3: Current market price of the firm’s stock is $28 Its last dividend was $2,20 Its expected dividend growth rate is 6% Calculate cost of retained earnings? 9-4 Problem 4: The company capital structure is 70% equity and 30% debt The yield to maturity on the company’s bonds is 9% The company’s year-end dividend is forecasted to be $0,80 a share The company expects that its dividend will grow at a constant rate of 9% a year The company’s stock price is $25 The company’s tax rate is 40% 9-5 The company anticipates that it will need to raise new common stock this year Its investment bankers anticipate that the total flotation cost will equal 10% of the amount issued Assume the company accounts...
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...FIN 515 Week 5 Homework 10-8 Truck: (=NVP: 14%, 5100, 5100, 5100, 5100, 5100) = $17,508.71 - $17,100 = $408.71 (=IRR: -17100, 5100, 5100, 5100, 5100, 5100) = 14.99% (=MIRR: -17100, 5100, 5100, 5100, 5100, 5100, 14%, 14%) = 14.54% → Accept the decision. Pulley System: (=NPV: 14%, 7500, 7500, 7500, 7500, 7500) = $25,748.11 – $22,430 = $3,318.11 (=IRR: -22430, 7500, 7500, 7500, 7500, 7500) = 19.99% → 20% (=MIRR: -22430, 7500, 7500, 7500, 7500, 7500, 14%, 14%) = 17.19% → Accept the decision. 10-9 Electric Truck: (=NPV: 12%, 6290, 6290, 6290, 6290, 6290, 6290) = $25,860 - $22,000 = $3,860 (=IRR: -22000, 6290, 6290, 6290, 6290, 6290, 6290) = 17.99% → 18% Gas Truck: (=NPV: 12%, 5000, 5000, 5000, 5000, 5000, 5000) = $20,557 - $17,500 = $3,057 (IRR= -17500, 5000, 5000, 5000, 5000, 5000, 5000) = 17.97% → 18% → Choose the electric truck, since it has the higher NPV & the IRR for both trucks are the same. 11-2 Operating Cash Flow = NOPAT + Depreciation → NOPAT = EBIT (1-Tax Rate) NOPAT: $10,000,000 [Projected Sales] - $7,000,000 [Operating Costs] - $2,000,000 [Interest Expense] $1,000,000 (1-0.40) → $1,000,000 (0.60) = $600,000 Operating Cash Flow = NOPAT + Depreciation $600,000 [NOPAT] + $2,000,000 [Depreciation] $2,600,000 [Operating Cash Flow] 11-3 $20,000,000 with a depreciation of 80% = $4,000,000 Value $5,000,000 [Gross Sale] - $4,000,000 [Value] $1,000,000 [Profit] 40% Tax on $1,000,000 →...
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...[pic] DeVry FIN 515 Group Project Company analysis as of 12/31/2013 and 12/31/2012 in USD 2012 2013 Profitability Ratios: Gross Margin 48.74 39.12 Operating Margin 11.37 10.21 EBITDA Margin % 13.39 12.21 Calculated Tax Rate % 37.80 30.21 Profit Margin (TTM) 6.96 5.67 Valuation Ratios: Price/Earnings (TTM) 113.38 115.21 Price/Book (TTM) 17.54 18.19 Price/Cash Flow (TTM) 153.19 158.30 Asset Management: Total Asset Turnover 1.71 2.24 Receivables Turnover 12.10 13.21 Inventory Turnover 3.03 4.03 Property Plant & Equip Turnover 11.52 12.71 Cash & Equivalents Turnover 6.77 8.12 Debt Management: Interest Coverage 90.38 90.40 Long Term Debt/Equity 0.05 0.06 Long Term Debt as % of Invested Capital 3.98 3.99 Total Debt/Equity 0.15 0.16 Accounts Payable Turnover 15.09 15.10 Accrued Expenses Turnover 21.32 21.34 Liquidity Indicators: Quick Ratio 1.29 1.34 Current Ratio 2.65 2.70 Net Current Assets as % of Total Assets 44.51 44.55 Free Cash Flow per Share 0.15 0.17 Revenue to Assets 1.48 1.50 Under Armour Inc. Introduction Under Armour, Inc. is an American sports clothing and accessories company. The company is a supplier of the sportswear and casual apparel. Under Armour began to offer footwear in 2006. Under Armour’s global headquarters...
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...CHAPTER 5 – Problems p. 210-211 5-1) Market price formula = INT*r*[1 -(1+rd)-n]/i + M*(1+rd)-n, where INT = par value M= maturity value r = coupon rate per coupon payment period rd= effective interest rate per coupon payment period n = number of coupon payments remaining Market price of bonds = 1000*.08 * (1 - 1.09-12)/.09 + 1000*1.09-12 Market price of bonds = $928.39 5-2) Value of the bond formula = 1nPar value*Coupon rate1+YTMt+Par value1+YTMn Time to maturity = 12 Par value = $1,000 Coupon rate = 10% Price of the bond = $850 Yield to maturity =12.475% 5-6) r = r* + IP + MRP 6.3 = 3 + 3 + MRP 6.3 – 6 = MRP 0.3 = MRP 5-7) N = 16 I/YR = 8.5/2 = 4.25 PMT = 50 FV = 1000 Excel Input: PV(0.0425,16,50,1000) = $1,085.80 5-13) N= 5 PMT = 80 FV = 1000 I/YR = ? Current yield = 8.21% Current yield = Annual interest/Current price 0.0821 = $80/PV PV = $80/0.0821 = $974.42. Excel Input : N = 5, PV = -974.42, PMT = 80, and FV = 1000. I/YR = YTM = 8.65% CHAPTER 6 – Questions p.257 6-6) If a company’s beta were to double, I would not expect the company’s return to double. The return would be expected to increase by an amount equal to the market risk premium times the change in beta. CHAPTER 6 – Problems p. 258-259 6-1) ($35,000/$75,000)(0.8) + ($40,000/$75,000)(1.4) = 1.12 Bp = 1.12 6-2) Ri = rRF + (Rm – rRF) bi Ri = 6% + (13% - 6%) 0.7 Ri = 10.9 % 6-7) a. Ri = rRF + (Rm – rRF) bi Ri = 9% + (14% - 9%) 1.3 Ri...
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...(13-10) Corporate Valuation The financial statements of Lioi Steel Fabricators are shown below—both the actual results for 2010 and the projections for 2011. Free cash flow is expected to grow at a 6% rate after 2011. The weighted average cost of capital is 11%. a. If operating capital as of 12/31/2010 is $502.2 million, what is the free cash flow for 12/31/2011? Computation of the Free Cash Flow NOWC= ($5.60 + $56.20 + $112.40) NOWC = $174.20 Net Plant and Equipment= ($11.20 + $28.10) Net Plant and Equipment= $39.30 Operating Capital= $174.20 - $39.30 Operating Capital= $134.90 Total Operating Capital=$134.90 + 397.50 Total Operating Capital=$532.40 Change in operating Capital= $532.40 - $502.20 Change in operating Capital= $30.20 FCF= $65.16 - $30.20 FCF=$34.96 b. What is the horizon value as of 12/31/2011? Horizon value = 37.06/ (.11-.06) Horizon value = $741.15 c. What is the value of operations as of 12/31/2010? Value of operations in 2010= $34.96 + $741.15 Value of operations in 2010= $776.11 Value of operations in 2009=$741.15-$41.95 Value of operations in 2009=$699.20 d. What is the total value of the company as of 12/31/2010? Total Value of the Company= $699.20+$49.90 Total Value of the Company= $749.10 e. What is the intrinsic price per share for 12/31/2010? Value of Equity= $749.10-($69.90+$140.80)-$35.00 Value of Equity= $503.40 Price...
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...FIN 515 Managerial Finance Entire Course https://homeworklance.com/downloads/fin-515-managerial-finance-entire-course/ FIN 515 Week First Course Project FIN 515 Week Second Course Project FIN 515 Week 1 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_1_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 1 (page 19) 1. What is the most important difference between a corporation and all other organizational forms? 2. What does the phrase limited liability mean in a corporate context? 3. Which organizational forms give their owners limited liability? 4. What are the main advantages and disadvantages of organizing a firm as a corporation? 5. Explain the difference between an S corporation and a C corporation. Chapter 2 The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text and all questions on pages 56–57. 29. In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million. a. Compare the gross margins for Starbucks and Peet’s. b. Compare the net profit margins for Starbucks and Peet’s. c. Which firm was more...
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...DeVry FIN 515 Final EXAM-2015 IF You Want To Purchase A+ Work then Click The Link Below For Instant Down Load http://www.hwspeed.com/DeVry-FIN-515-Final-EXAM-2015-040404441450.htm?categoryId=-1 IF You Face Any Problem Then E Mail Us At JOHNMATE1122@GMAIL.COM Question 1. What are the names of the four components of the DuPont identity and how they are calculated and what do the measure 1. Pfizer has just paid a dividend and will pay a dividend of $3.25 in a year. The dividend will stay constant for the rest of the time. The return on equity for similar stocks is 9%. What is Po? 2. General mills has declared an annual dividend of $2.15 to be paid one year from today, The dividend is expected to grow at 3% annual rate. The return on equity for similar stock is 10% what is po? 3. Apple has a bond with six years to maturity, it has a face value of $1,000. It has a YTM of 6.5% and the coupons are paid semiannually at a 9% annual rate. What does the bond currently sell for? 4. A stericycle bond is selling for $1,050 even though it has a par of $1,000. It was issued two years ago and has a maturity rate of 10 years. The coupon rate is 6% and the interest payments are made semiannually. What is the YTM? 1. What is Beta and why is it important to investors and issuers of stock? Describe the behavior of stocks with beta greater than one, less that one and less than zero. 2. Tennant has 10 million shares outstanding trading for $7 per per share....
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...FIN 515 Managerial Finance Entire Course https://homeworklance.com/downloads/fin-515-managerial-finance-entire-course/ FIN 515 Week First Course Project FIN 515 Week Second Course Project FIN 515 Week 1 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_1_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 1 (page 19) 1. What is the most important difference between a corporation and all other organizational forms? 2. What does the phrase limited liability mean in a corporate context? 3. Which organizational forms give their owners limited liability? 4. What are the main advantages and disadvantages of organizing a firm as a corporation? 5. Explain the difference between an S corporation and a C corporation. Chapter 2 The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text and all questions on pages 56–57. 29. In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million. a. Compare the gross margins for Starbucks and Peet’s. b. Compare the net profit margins for Starbucks and Peet’s. c. Which firm was more...
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...FIN 515 Entire Course Managerial Finance https://hwguiders.com/downloads/fin-515-entire-course-managerial-finance FIN 515 Entire Course Managerial Finance FIN 515 Week 1 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_1_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 1 (page 19) 1. What is the most important difference between a corporation and all other organizational forms? 2. What does the phrase limited liability mean in a corporate context? 3. Which organizational forms give their owners limited liability? 4. What are the main advantages and disadvantages of organizing a firm as a corporation? 5. Explain the difference between an S corporation and a C corporation. Chapter 2 The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text and all questions on pages 56–57. 29. In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million. a. Compare the gross margins for Starbucks and Peet’s. b. Compare the net profit margins for Starbucks and Peet’s. c. Which firm was more profitable in 2011? ...
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...FIN515_HOMEWORK3_DeANGELA L. DIXON Problem 5-1 Maturity 12 YTM 9% PYMT $80.00 FV $1,000.00 PV $928.39 Problem 5-2 MATURITY 12 COUPON RATE 10% PV -$850.00 FV $1,000.00 PMT $100.00 RATE 12.48% Problem 5-6 RISK FREE 3% INFLATION 3% 6% TREASURY SECURITY 6.3% MRP 0.3% Problem 5-7 MATURITY 16 COUPON RATE 10% PMT 50.00 FV $1,000.00 YTM 4.25% PV $1,085.80 Problem 5-13 MATURITY 5 COUPON RATE 8% PMT $80.00 FV $1,000.00 PV -974.42 RATE 8.65% Question 6-6 Not necessarily. If a beta were to double, its expected return would not double. According to the SML equation, an increase in beta will increase a company’s return by an amount equal to the market risk premium times the change in beta. Problem 6-1 STOCK BETA $35,000.00 0.8% $40,000.00 1.4% $75,000.00 PORTFOLIO BETA 1.12% Problem 6-2 RISK FREE 6% MARKET RETURN 13% BETA 0.7% RATE OF RETURN 10.9% Problem 6-7 a. RISK FREE 9% MARKET RETURN 14% BETA...
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...Fin 221 Fall 2006 Exam 2 Multiple Choice Identify the choice that best completes the statement or answers the question. 1) Marcus Nurseries Inc.'s 2005 balance sheet showed total common equity of $2,050,000, which included $1,750,000 of retained earnings. The company had 100,000 shares of stock outstanding which sold at a price of $57.25 per share. If the firm had net income of $250,000 in 2006 and paid out $100,000 as dividends, what would its book value per share be at the end of 2006, assuming that it neither issued nor retired any common stock? A.|$19.00| B.|$20.00| C.|$21.00| D.|$22.00| E.|$23.00| 2) Lennox Furniture Company's 2005 balance sheet showed total current assets of $1,500,000. All of the current assets were required in operations, and its current liabilities consisted of $300,000 of accounts payable, $200,000 of 6% short-term notes payable to the bank, and $100,000 of accrued wages and taxes. What was the net operating working capital that was financed by investors at the end of 2005? A.|$1,100,000| B.|$1,200,000| C.|$1,300,000| D.|$1,400,000| E.|$1,500,000| 3) Johnson Battery Systems Metals recently reported $9,000 of sales, $6,000 of operating costs other than depreciation, and $1,500 of depreciation. The company had no amortization charges, it had $4,000 of bonds that carry a 7% interest rate, and its federal-plus-state income tax rate was 40%. In order to sustain its operations and thus generate sales and cash flows in the future...
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