...FIN 571 Week 4 Connect Problems – Assignment 1. Microhard has issued a bond with the following characteristics: Par: $1,000 Time to maturity: 11 years Coupon rate: 9 percent Semiannual payments Calculate the price of this bond if the YTM is (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): Price of the Bond a. 9 percent $ _____ b. 11 percent $ _____ c. 7 percent $ _____ 2. Watters Umbrella Corp. issued 20-year bonds 2 years ago at a coupon rate of 8.4 percent. The bonds make semiannual payments. If these bonds currently sell for 90 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) YTM _____ % 3. Grand Adventure Properties offers a 7 percent coupon bond with annual payments. The yield to maturity is 5.85 percent and the maturity date is 8 years from today. What is the market price of this bond if the face value is $1,000? • $1,071.84 • $788.73 • $1,082.17 • $1,019.29 • $947.45 4. The next dividend payment by ECY, Inc., will be $1.64 per share. The dividends are anticipated to maintain a growth rate of 8 percent, forever. The stock currently sells for $31 per share. What is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return _____ % 5. The Starr Co. just paid a dividend...
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...Week Four Discussion Questions 1.What is the cost of capital? How do you calculate the cost of capital? Why is it important in capital budgeting decisions. (due by midnight on Thursday) Cost of capital is the required return or the opportunity cost for a project in order to increase the value of the firm in the market place. It helps managers evaluate if an investment is worthwhile by setting a benchmark for the minimum rate of return. Cost of capital may be used as the measuring road for adopting an investment proposal. It measures the financial performance and determines the acceptability of all investment opportunities. The weighted average cost of capital (WACC) is used to measure a firm’s cost of capital. 2. What are some capital budgeting tools? Explain Net Present Value (NPV) analysis. (Due by midnight on Thursday) Different tools used in capital budgeting include NPV, discounted-cash-flow analysis, IRR, and MIRR. NPV is used to evaluate capital budgeting projects by determining the difference between the market value of an item and what it costs. 3. What is the weighted average cost of capital (WACC)? How is it calculated? What are business investment rules? (Due by midnight on Saturday) WACC is the average costs of financing sources either debt or equity. The WACC equation is the cost of each capital component multiplied by its proportional weight and then summing. WACC= E/V*Re+D/V*Rd*(1-Tc) Re=cost of equity, Rd=cost of debt, E=market value of the firm’s equity...
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...balance sheet? • intangible asset • accounts payable • preferred stock • inventory • net plant and equipment Complete FIN 571 week 2 connect problems Answers here FIN 571 Week 2 Connect Problems 3. It is easier to evaluate a firm using its financial statements when the firm: • is a conglomerate. • is global in nature. • uses the same accounting procedures as other firms in its industry. • has a different fiscal year than other firms in its industry. • tends to have one-time events such as asset sales and property acquisitions. 4. The cash flow resulting from a firm's ongoing, normal business activities is referred to as the: • operating cash flow. • net capital spending. • additions to net working capital. • cash flow to retained earnings. • cash flow to investors. FIN 571 final exam (Newest) download now FIN 571 Final Exam (Newest) 5. Which one of these is a non-cash item? • depreciation • interest expense • current taxes • dividends • selling expenses 6. Sankey, Inc., has current assets of $5,000, net fixed assets of $23,300, current liabilities of $4,450, and long-term debt of $11,000. (Do not round intermediate calculations.) What is the value of the shareholders' equity account for this firm? Shareholders' equity $_________ How much is net working capital? Net working capital $_________ FIN 571 complete paper here FIN 571 7. Shelton, Inc., has sales of $401,000, costs of $189,000, depreciation expense of...
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...rejected if it is negative. • Any type of project with greater total cash inflows than total cash outflows, should always be accepted. • An investment project that has positive cash flows for every time period after the initial investment should be accepted. Find the Week 1 Connect Problems answers here FIN 571 Week 1 Connect Problems 3. The primary reason that company projects with positive net present values are considered acceptable is that: • they create value for the owners of the firm. • the project's rate of return exceeds the rate of inflation. • they return the initial cash outlay within three years or less. • the required cash inflows exceed the actual cash inflows. • the investment's cost exceeds the present value of the cash inflows. 4. Accepting a positive net present value (NPV) project: • indicates the project will pay back within the required period of time. • means the present value of the expected cash flows is equal to the project’s cost. • ignores the inherent risks within the project. • guarantees all cash flow assumptions will be realized. • is expected to increase the stockholders’ value by the amount of the NPV. Week 2 Connect problems Answers just a click away FIN 571 Week 2 Connect Problems 5. The net present value method of capital...
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...are paid. Next year’s sales are projected to be $7,906. What is the external financing needed? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) External financing needed $_____ 3. Projected future financial statements are called: • plug statements. • pro forma statements. • reconciled statements. • aggregated statements. • comparative statements. 4. One of the primary weaknesses of many financial planning models is that they: • rely too much on financial relationships and too little on accounting relationships. • are iterative in nature. • ignore the goals and objectives of senior management. • ignore cash payouts to stockholders. • ignore the size, risk, and timing of cash flows. 5. The maximum rate at which a firm can grow while maintaining a constant debt-equity ratio is bestdefined by its: • rate of return on assets. • internal rate of growth. • average historical rate of growth. • rate of return on equity. • sustainable rate of growth. Find The Complete Answers just a click away FIN 571 Week 3 Connect Problems - Assignment 6. The external funds needed (EFN) equation projects the addition to retained earnings as: • PM × ? Sales. • PM ×? Sales × (1 - d). • PM × Projected sales...
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... Email Embed Like Save Fin 571 week 6 furniture store recommendation cash per forma 1 of 2 Fin 571 week 1 Fin 571 week 1 It 284 week 2 discussion question 1 Mgt 380 week 1 discussion 1 Mgt 380 week 4 discussion 1 Ad by SelectionLinks | Close Recommended More from User Fin 571 week 1 Fin 571 week 1 jennalden 471 views Fin 571 week 1 Fin 571 week 1 jennalden 471 views It 284 week 2 discussion question 1 It 284 week 2 discussion question 1 brigbarwason1977 1,047 views Mgt 380 week 1 discussion 1 Mgt 380 week 1 discussion 1 silkpitaha1979 929 views Mgt 380 week 4 discussion 1 Mgt 380 week 4 discussion 1 blinanaham1976 1,218 views Cmgt 445 week 4 d qs Psy 350 week 4 dq 2 eating disorders Fin 571 week 6 furniture store recommendation cash per forma 928 views rongeserre1970 rongeserre1970 (3 SlideShares) + Follow...
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...managers should all be ones which increase the: a) size of the firm. b) growth rate of the firm. c) marketability of the managers. d) market value of the existing owners' equity. e) firm’s current sales. 3. The primary goal of financial management is to: a) maximize current dividends per share of the existing stock. b) maximize the current value per share of the existing stock. c) avoid financial distress. d) minimize operational costs and maximize firm efficiency. e) maintain steady growth in both sales and net earnings. 4. Accounting concepts for a firm to create value it must: a) have a greater cash inflow from its stockholders than its outflow to them. b) create more cash flow than it uses. c) reduce its investment in fixed assets since fixed assets require the use of cash. d) avoid payments to the government so dividends can be increased. e) avoid the issuance of debt securities Find the week 1 connect problems answers here FIN 571 Week 1 Connect Problems 5. The primary goal of financial management is to: a) maximize current dividends per share of the existing stock. b) maximize the current value per share of the existing stock. c) avoid financial distress. d) minimize operational costs and maximize firm efficiency. e) maintain steady growth in both sales and net earnings. 6. Which one of the following business types is best suited to raising large amounts of capital? a) sole proprietorship b) limited liability company c) corporation d) general partnership ...
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...managers should all be ones which increase the: a) size of the firm. b) growth rate of the firm. c) marketability of the managers. d) market value of the existing owners' equity. e) firm’s current sales. 3. The primary goal of financial management is to: a) maximize current dividends per share of the existing stock. b) maximize the current value per share of the existing stock. c) avoid financial distress. d) minimize operational costs and maximize firm efficiency. e) maintain steady growth in both sales and net earnings. 4. Accounting concepts for a firm to create value it must: a) have a greater cash inflow from its stockholders than its outflow to them. b) create more cash flow than it uses. c) reduce its investment in fixed assets since fixed assets require the use of cash. d) avoid payments to the government so dividends can be increased. e) avoid the issuance of debt securities Find the week 1 connect problems answers here FIN 571 Week 1 Connect Problems 5. The primary goal of financial management is to: a) maximize current dividends per share of the existing stock. b) maximize the current value per share of the existing stock. c) avoid financial distress. d) minimize operational costs and maximize firm efficiency. e) maintain steady growth in both sales and net earnings. 6. Which one of the following business types is best suited to raising large amounts of capital? a) sole proprietorship b) limited liability company c) corporation d) general partnership ...
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...Fin571 Week 5 Problem Sets Lamar September 19, 2010 FIN/571 University of Phoenix Denny Frischkorn Week 5 Text Problem Sets Exercises Chapter 17 B1: (Choosing Financial... Save Paper Eco561 Week 1 quantity supplied on a fixed supply curve, during the pre-Superbowl weeks, there is a spike in the demand and quantity supplied as consumers are readying for the big... Save Paper International Corporate Finance/Fin Gm571 Week 3 The current credit terms dictates 15% upon purchase and 85% the following week (Emery, Finnerty, & Stowe, 2007). As valuable a customer who LS is to Murray, LS... Save Paper Week 2 Checkpoint Xeco212 iPad within hours, and retailers werent replenished for weeks because the demand was too high for production. So when they did this, they didnt have a significant... Save Paper Hca230 Week 1 Assignment HCA230 Week 1 Assignment Today Managed Care is the most predominant form of insurance in the United States. Insurances such as PPO, POS, and HMO plans are all... Save Paper Two Weeks With The Queen courage and prejudice expressed in a very realistic way that we can relate to. Two Weeks with the Queen gives the reader a sense of reality. In the beginning... Save Paper Week 5 Qnt/561 show that the production rate at the Scranton Plant has changed from 200 per week. The Two Sample Test of Hypothesis The two- sample hypothesis testing... Save Paper TraInIng In Acc point around which a learning organization may develop. The training program...
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...Text Problem Sets - Week Two Vaughan Thompson FIN/571: Corporate Finance April 22, 2013 Text Problem Sets: FIN/571 - Week Two Chapter Five Question # 4 Define the following terms: bond indenture, par value, principal, maturity, call provision, and sinking fund. Bond indenture. Bond indenture is a legal contract for a publicly traded bond. The structure of this contract outline incentives explicitly by detailing responsibilities, constraints, penalties, and oversight required. For example, contracts may specify interest and principal payment timing and amounts. Par value. Par value denotes face value or designated value of a bond or stock. Par value of a bond is typically $1,000 and the sum investors pay upon issue. It is also the sum received when they redeem the bond matures. Conversely, stock par value is frequently set at $1. In this case, par value is an accounting tool that shows no connection to the stocks’ market value. Principal. The term “principal” refers to a sum of money one borrows or invests. The face amount of a bond - the value printed on a stock or bond, or a debt balance. Principal does not encompass finance charges. Principal also describes an investor represented by a broker who executes trades on that investor’s behalf or an investor who trades for his or her own benefit. Principal also refers to a party affected by an agent’s decisions in a principal-agent relationship. Maturity. Maturity is the end of a bond’s life. In finance, maturity (or...
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...Week 5 Assignment José A. García Rosario The University of Phoenix FIN 571 - Foundations of Corporate Finance December 05, 2013 Prof. Ismael Torres-Pizarro Growth Rate The total numbers of copies that the publisher expects to sell in the year number three is 92,016 copies. The total numbers of copies that the publisher expects to sell in the year number four is 101,218 copies. 0 1 2 3 4 |_________________|_______________|________________|_______________| Year 53,250 63,900 76,680 92,016 101,218 Year one FV³ = PV x (1 + g) ³ = 53,250 x 1.2 = 63,900 Year two FV³ = PV x (1 + g) ³ = 63,900 x 1.2 = 76,680 Year three FV³ = PV x (1 + g) ³ = 76,680 x 1.2 = 92,016 Year four FV³ = PV x (1 + g) ³ o ( 1+g)4 = 92,016 x 1.1 = 101,218 Multiple compounding periods a- The present value of $3,500 in five years is $5,360.53 dollar. FVn = PV x (1 + i) n = $3,500 x (1 + 0.089)5 = $3,500 x 1.5315788 = $5,360.53 b- FVn = PV x (1+I / m) m x n = $3,500 x (1 + 0.066 / 4) 4 x 8 = $3,500 x (1 + 0.0165) 32 = $3,500 x 1.688248044 = $5,908.87 c- FV daily = PV x (1 + I/m) m x n = $3,500 x (1 + 0.043 / 365) 365 x 4 =...
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...Week 4 Learning Team Reflection Anitra Stephens, April Bates, Calvin Beidleman, Nikki Torres, Raymond Wentler, Sean Lechman, Russell Wall FIN/571 April 13, 2015 Gurpreet Atwal Week 4 Learning Team Reflection Introduction Stock valuation is needed to ensuring the value of an organization’s stock and worth in the industry. There are various measuring methods that organizations can use to determining and establishing the value. Some of the methods and the reason for valuation have been identified below. Stock types and bonds: The stock valuation video covered the different types of stocks and well as bonds. There are common stocks and preferred stocks. Preferred stocks are considered to be a hybrid between a common stock and a bond. This form of stock will have no maturity and can be sometimes redeemable. A common stock is when an individual purchases a share of an organization and they own that share until they want to sell their share for the market value. A debt or a bond is another form of investment that private investors can use. A bond is a contract which has a set time period, as well as set cash flows. Once the bond is matured then the investor will receive their set return amount, although investors who have bonds will receive their return on investment before the stockholders. Assumptions and Indexes: Assumptions made on the valuation of a stock or company’s value in the future are crucial when determining the future value of a company based on its revenues. Many...
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...Week Six Learning Team Paper FIN/571 Foundations of Corporate Finance August 4, 2014 Week Six Learning Team Paper Peggy Parks worked as a building code auditor, saving money into her 401 (k) for retirement. But like every American citizen, her 401 (k) suffered a drastic reduction due to the economic downturn in 2007. Worried about her retirement, Peggy decided to invest in an alpaca business, due to a high return rate, rather than depend only on the financial market. She felt she had more control with a tangible asset, such as alpacas. Alpacas are well loved and can be kept as a pet or for breeding. They have the look of a llama because of their fleece. Many people use the fleece for clothing, such as sweaters and ponchos. It is light in weight, but warm. Alpacas have a demand all over the world, tax savings for those breeding, a deferral on capital gains until the alpaca is sold, tax write off for maintenance and feeding, and they are insurable. According to the video, her investment decision was based on research that proved to be profitable. She obtained a return of $15,000 in the first year for her initial $56,000 investment. Although Peggy had a return of 27% on her initial investment on the alpaca ranch, she could take advantage of capital strategies to maximize earnings. At first, Peggy could invest part if not all, of her remaining 401(k) balance on the ranch, which could be used to buy more alpacas and breed them. It is more advantage to her to invest on a business...
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...FIN/571 Week 4 Analyzing Pro Forma Statements Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on). Using the sample financial statements, create pro forma statements of five year projections that are clear, concise, and easy to read. Be sure to double check the calculations in your pro forma statements. Make assumptions that support each line item increase or decrease for your forecast-ed statements. Discuss and interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs. Pro Forma Statements This individual assignment presents an initiative that can be implemented to increase sales over the next five years. The purpose of this assignment is to present pro forma statements of five year projections, and to make assumptions that support each line item increase or decrease for the forecasted statements. Furthermore, this assignment will discuss and interpret the financials in relation to the initiative. It will make recommendations on potential discretionary financing needs. Finally, this assignment will present an analysis of the company's short term and long term financing needs, and determine strategies for the company to manage its working capital. In today’s business world it is very important to understand the business environment and create strategies according to market fluctuations. As...
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