Ghost Rider Corporation has bonds on the market with 10 years to maturity ANSWER
Ghost Rider Corporation has bonds on the market with 10 years to maturity, an YTM of 7.5 percent, and a current price of $938. What must the coupon rate be on the company’s bonds?
satou saitou is the purchasing agent for west valve company . west valve sells industrial valves and fluid control devices answer
satou saitou is the purchasing agent for west valve company . west valve sells industrial valves and fluid control devices . one of the most popular valves is the westren which has an annual demand of 4000 units the cost of each valve is $90 and the inventory carrying cost is estimated to be 10% of the cost of each valve. satou has made a study of the costs involved in placing an order for any of the valves that west valve stocks ,and she has concluded that the average ordering cost is $25 per order . furthermore , it takes about two weeks for an order to arrive from the supplier and durring this time the demand per week for west valves is approximately 80.
(a)What is the EOQ?
(b)What is the ROP?
(c)What is the average inventory ?What is the annual holding cost?
(b)How many orders per year would be placed ?What is the annual ordering cost?
The All-Star Production Corporation (APC) is considering a recapitalization plan answer
The All-Star Production Corporation (APC) is considering a recapitalization plan that would convert APC from its current all-equity capital structure to one including some financial leverage. APC now has 10,000,000 shares of common stock outstanding, which are selling for $40.00 each, and you expect the firm’s EBIT to be $50,000,000 per year, for the foreseeable future. The recapitalization proposal is to issue $100,000,000 worth of long-term debt, at an interest rate of 6.50 percent, and use the proceeds to repurchase as many shares as possible, at a price of $40.00 per share. Assume there are no market frictions such as corporate or personal income taxes. Calculate the expected return on equity for APC shareholders under both the current all-equity capital structure and under the recapitalization plan.
Calculate the number of shares outstanding, the per-share price, and the debt-to-equity ratio for APC if the proposed recapitalization is adopted.
Calculate the earnings per share (EPS) and the return on equity for APC shareholders, under both the current all-equity capitalization and the proposed mixed debt/equity capital structure.
Wilkins Inc. has two types of handbags: standard and custom. The controller has decided answer
Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.
Direct labor costs $53,500 $116,000
Machine hours 1,430 1,470
Setup hours 100 380
Total estimated overhead costs are $298,600. Overhead cost allocated to the machining activity cost pool is $196,100, and $102,500 is allocated to the machine setup activity cost pool.
(a) Compute the overhead rate using the traditional (plantwide) approach. (Round answers to 2 decimal places, e.g. 12.25%.) Predetermined overhead rate % of direct labor cost
Sydney and Niki are law partners in a general partnership.Niki decides to take a position ANSWER
- Sydney and Niki are law partners in a general partnership.Niki decides to take a position at another law firm. Niki notifies Sydney that she’s leaving the partnership. This set of
facts constitutes a dissolution by
A. operation of law.
- judicial decree.
B. acts of partners.
- Taylor served on the board of directors for Cabby Company.
Taylor also owned a great deal of vacant land, which he had
tried unsuccessfully to sell for an extended period of time.
Taylor convinced the board of directors to purchase 1,000
acres of the land he had been attempting to sell for a price
well in excess of what the land was worth. This action likely
violated Taylor’s duty of
A. loyalty. C. disclose.
B. care.D. fair dealing.
3. Herbie owns a pizza parlor in New York. Herbie makes all business decisions and
retains all profit after overhead is paid. Herbie owns a
A. corporation.C. sole proprietorship.
B. partnership. D. limited liability company.
- Sally is a shareholder in XYZ Corporation. XYZ Corporation made defective products,
and many individuals have filed lawsuits due to the defects. Sally may
A. be held personally liable for the defects as a shareholder.
B. be held personally liable only to the extent that she was aware of the defect.
C. be held personally liable only if she took actions to cause the defect, and those
actions are proven.
D. not be held personally liable for the defects in her capacity as a shareholder.
- Sharon purchased $1,000 of Big Company stock. Sharon was, in effect,
A. purchasing an ownership interest in the company.
B. purchasing a seat on the board for the company.
C. loaning money to the company.
D. borrowing money from the company.
6. Melanie and Crawford were partners in a law firm. The firm was a general partnership.
Melanie failed to respond to a lawsuit against a client in time, and the client was found
liable on a $1 million dollar verdict. The client filed suit against Melanie and Crawford.
Which of the following is true about this set of facts?
A. Only Melanie can be held liable because she committed the wrong.
B. Only the partnership can be held liable, and neither Melanie nor Crawford face
C. Either Melanie or Crawford may be held jointly and severally liable.
D. Only Melanie can be held liable because Crawford knew nothing about the case on
which the mistake was made.
- Ken was the president of a large energy company. Company executives approached
Ken about purchasing some smaller companies to expand the business. Ken read the
reports explaining the potential risk and return of the investment, and decided the
purchase appeared to be a good investment. Unfortunately, Ken was wrong, and the
company lost millions of dollars as a result of the purchase. Based on these facts, Ken
A. violated his duty of care to the corporation.
B. should benefit from the business judgment rule.
C. violated his duty of loyalty to the corporation.
D. can’t possibly benefit from the business judgment rule.
- Tricia purchased securities from a company in which she’s ensured ownership, and
priority as to payment of dividends and distribution of assets on dissolution. What type
of securities did Tricia purchase?
A. Common stockC. Preferred stock
B. Debenture bonds D. Convertible bonds
- Brenda is on the board of directors for Money Company. Brenda rarely attends board
meetings, and doesn’t pay attention when she does attend. Brenda usually votes like
her friend Sadie, who is also on the board. Brenda is likely violating her duty of
A. care.C. effort.
B. substantial compliance. D. loyalty.
- Steve decides to incorporate his business. Steve decides it’s too expensive to hire an
attorney to advise him of the requirements, and merely changes the name on the sign
outside from Steve’s to Steve, Inc. One of Steve’s customers brings suit against Steve,
Inc. based upon an allegedly defective product sold through his business. Steve defends
on the basis that Steve, Inc. doesn’t exist. Which of the following is true about this set
A. A de jure corporation exists.
B. A de facto corporation exists.
C. No corporation exists.
D. A corporation by estoppel exists.
Walter Industries has $5 billion in sales and $1.7 billion in fixed assets answer
EXCESS CAPACITY: Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the company’s fixed assets are operating at 90% of capacity.
a. What level of sales could Walter Industries have obtained if it has been operating at full capacity?
b. What is Walter’s Target fixed assets / Sales ratio?
c. If Walter’s sales increase 12%, how large of an increase in fixed assets will the company need to meet its Target assets / Sales ratio
The Winnipeg Chemical Company uses flexible budgets and a standard cost system answer
13-67 Straightforward Problem on Standard Cost System Study
Appendix 13. The Winnipeg Chemical Company uses flexible budgets and a standard cost system.
- Direct-labor costs incurred, 12,000 hours, $150,000
- Variable-overhead costs incurred, $37,000
- Fixed-overhead flexible-budget variance, $1,600, favorable
- Finished units produced, 1,800
- Fixed-overhead costs incurred, $38,000
- Variable overhead applied at $3 per hour
- Standard direct-labor cost, $13 per hour
- Denominator production per month, 2,000 units
- Standard direct-labor hours per finished unit, 6 hours Prepare an analysis of all variances (similar to Exhibit 13-11, p. 614).
The Cooper Electronics Company has developed the following schedule of potential investment answer
3) The Cooper Electronics Company has developed the following schedule of potential investment projects that may be undertaken during the next six months
Project Cost (in Millions of Dollars) Expected Rate of Return
A $ 0.3 20%
B 1.5 22
C 7.0 7
D 14.0 10
E 50.0 12
F 12.0 9
G 1.0 44
a. If Cooper requires a minimum rate of return of 10% on all investments, which projects should be adopted?
b. In general, how would a capital budgeting constraint on the available amount of investment funds influence these decisions?
c. How would differing levels of project risk influence these decisions?
The Connors Company’s last dividend was $1.00. Its dividend growth rate is expected to be constant at 15% for 2 years Answer
The Connors Company’s last dividend was $1.00. Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 10% forever. Connors’ required return (rs) is 12%. What is Connors’ current stock price?
Tapley Inc. currently has assets of $5 million, zero debt, is in the 40% ANSWER
Tapley Inc. currently has assets of $5 million, zero debt, is in the 40% federal-plus-state tax bracket, has a net income of $1 million, and pays out 40% of its earnings as dividends. Net income is expected to grow at a constant rate of 5 percent per year, 200,000 shares of stock are outstanding, and the current WACC is 13.40%.
The company is considering a recapitalization where it will issue $1 million in debt and use the proceeds to repurchase stock. Investment bankers have estimated that if the company goes through with the recapitalization, its before-tax cost of debt will be 11%, and its cost of equity will rise to 14.5%.
What is the stock’s current price per share (before the recapitalization)?