Finance Answers

Ernie Manufacturing has projected sales of $155.5 million next year. Costs are expected to be $100 million and net investment is expected to be $17.5 million. Each of these values is expected to grow at 14 percent the following year, with the growth rate declining by 2 percent per year until the growth rate reaches 6 percent where it will remain. There are 5.5 million shares of stock outstanding. Investors require a return of 13 percent and the corporate tax rate is 40 percent. What is your estimate of the current stock price?

In the form of an extra dividend to shareholders or embark on a share repurchase scheme. Current profits are R3.40 per share and their shares currently trade for R35. Their abbreviated balance sheet before paying out the dividend is as follows:

Equity 350 000 Bank/cash 130 000 Debt 120 000 Other assets 340 000 470 000 470 000 Evaluate each alternative(i.e. pay the dividend or repurchase the shares) by:Calculating the number of shares in issue.

If I took out a loan July 1 of this year of NOK 500,000. The loan will be repaid with the same amount every year for four years. The interest rate is 5% and the interest is paid in arrears. Interest and installments will be paid for the first time on June 30 until next year. What is posted as interest expense this year?

Barton Industries expects next year's annual dividend, D1, to be $2.30 and it expects dividends to grow at a constant rate g = 4.8%. The firm's current common stock price, P0, is $22.80. If it needs to issue new common stock, the firm will encounter a 5.1% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment that must be added to its cost of retained earnings

prepare a written report in response to
-liquidity requirements
-return requirements
-risk tolerance
-time horizon
-tax considerations
regulatory and legal considerations
-unique needs and circumstances

Explain in detail how each of the following relates to the determination of either investor objectives or investor constraints that can be used to determine the portfolio policies for this three-year period for the Midlands Museum Endowment Fund also explain the processes in Exhibit A:
 Liquidity requirements
 Return requirements
 Risk tolerance
 Time horizon
 Tax considerations
 Regulatory and legal considerations
 Unique needs and circumstances

a) Briefly discuss four aspects of the South Korea’s environment that favour investing
actively and four aspects that favour indexing.
b) Recommend whether GAC should invest in South Korea actively or by indexing
and justify your recommendation based on the factors identified in part a).
2. “Because corporations do not actually raise any funds in secondary markets, they
(secondary markets) are less important to the economy than primary markets.”
Discuss

aspects favouring active investment

aspects that favours indexing

Global Advisers Company (GAC) is a registered investment counseling firm solely
involved in managing international securities portfolios. After much research on the
settling
trades made by nonresidents. Senior finance officials in the government are working
to deregulate capital flows and foreign ownership, but GAC’s political consultant
believes that isolation sentiment may prevent much real progress in the short term run.
a) Briefly discuss four aspects of the South Korea’s environment that favour investing
actively and four aspects that favour indexing.