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Finance
LKM, Inc. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 6.5 percent coupon bonds on the market that sell for $972.78, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?
6.25 percent
6.37 percent
6.50 percent
6.67 percent
6.75 percent
6.25 percent
6.37 percent
6.50 percent
6.67 percent
6.75 percent
Finance
The Walt Disney Company Please respond to the following:
The Walt Disney Company is in the following businesses: theme parks, Disney Cruise Line, resort properties, movie, video, and theatrical productions, television broadcasting, radio broadcasting, musical recording and sales of animation art, Anaheim Mighty Ducks NHL franchise, Anaheim Angels Major League Baseball franchise, books and magazine publishing, interactive software and internet sites, and The Disney Store retail shops.
Based on the above list, determine whether or not Walt Disney’s lineup reflects a strategy of related diversification, unrelated diversification, or a combination of related and unrelated. Explain your answer and be prepared to justify the extent to which the value chains of Disney’s different businesses seem to have competitively valuable cross-business relationships.
The Walt Disney Company is in the following businesses: theme parks, Disney Cruise Line, resort properties, movie, video, and theatrical productions, television broadcasting, radio broadcasting, musical recording and sales of animation art, Anaheim Mighty Ducks NHL franchise, Anaheim Angels Major League Baseball franchise, books and magazine publishing, interactive software and internet sites, and The Disney Store retail shops.
Based on the above list, determine whether or not Walt Disney’s lineup reflects a strategy of related diversification, unrelated diversification, or a combination of related and unrelated. Explain your answer and be prepared to justify the extent to which the value chains of Disney’s different businesses seem to have competitively valuable cross-business relationships.
Finance
show how the following events and transactions should appear on your personal incomestatement, balance sheet,and cash flow statement. a.On july 1,200X, you receive $20,000 in gifts upon graduation from school and pay off a $10,000 student laon
Finance
ATM Inc. has a capital structure consisting of 20 percent debt and 80 percent equity. ATM debt
currently cost 8 percent. The risk-free rate is 5 percent, and the market risk premium is 6 percent.
ATM estimates that its cost of equity is currently 12.5 percent. The company has a 40% tax rate. ATM
is considering changing its capital structure to 40% debt and 60% equity. If the company went ahead
with the proposed change , the cost of the company's debt would rise to 9.5%.The propose change
will have no effect on the company's tax rate.
a) What is ATM’s current WACC?
b) What is the current beta on ATM’s common stock?
c) What would ATM's Beta be if the copany had no debt?
d) What would be the company's new cost of equity if it adopted the proposed change in
capital structure?
e) What would the company's new WACC be if it adopted the proposed change in capital
structure ?
currently cost 8 percent. The risk-free rate is 5 percent, and the market risk premium is 6 percent.
ATM estimates that its cost of equity is currently 12.5 percent. The company has a 40% tax rate. ATM
is considering changing its capital structure to 40% debt and 60% equity. If the company went ahead
with the proposed change , the cost of the company's debt would rise to 9.5%.The propose change
will have no effect on the company's tax rate.
a) What is ATM’s current WACC?
b) What is the current beta on ATM’s common stock?
c) What would ATM's Beta be if the copany had no debt?
d) What would be the company's new cost of equity if it adopted the proposed change in
capital structure?
e) What would the company's new WACC be if it adopted the proposed change in capital
structure ?
Finance
show how the following events and transactions should appear on your personal incomestatement,
balance sheet,and cash flow statement.
a.On july 1,200X, you receive $20,000 in gifts upon graduation from school and
pay off a $10,000 student laon
balance sheet,and cash flow statement.
a.On july 1,200X, you receive $20,000 in gifts upon graduation from school and
pay off a $10,000 student laon
Finance
KF can obtain an option on a site for $100,000 on 31 Dec 2012. The option would give KF the right to purchase the site for $2.6million on 31 Dec 2017. It is estimated that similar sites will then have a market value of $3 million. Calculate the present value of purchasing the option now and compare it with the present value of purchasing the land outright later on. Which is the better alternative? Why?
Finance
My median salary is $57,427/year
*Determine the Federal income tax withheld each pay period. (For wages paid in 2012.)
_ Use semimonthly pay period
_ Use W4 allowance of one
Withholding allowance value table:
Semimonthly One withholding allowance: $41.60
*Determine the Federal income tax withheld each pay period. (For wages paid in 2012.)
_ Use semimonthly pay period
_ Use W4 allowance of one
Withholding allowance value table:
Semimonthly One withholding allowance: $41.60
Finance
Discuss the non-rational factors that may have a role in the valuation of stocks and stock market equilibrium. Provide specific examples to support your response.
Finance
Atlantic Computer Case Please respond to the following:
State how a product/service differentiation can provide a competitive advantage.
Determine whether or not there are strategies that may allow a competitor to compete effectively with Atlantic Computer.
Suggest the most effective pricing strategy for Atlantic Computer.
State how a product/service differentiation can provide a competitive advantage.
Determine whether or not there are strategies that may allow a competitor to compete effectively with Atlantic Computer.
Suggest the most effective pricing strategy for Atlantic Computer.
Finance
Suppose a new company decides to raise a total of $200 million, with $100 million as common equity and $100 million as long-term debt. The debt can be mortgage bonds or debentures, but by an iron-clad provision in its charter, the company can never raise any additional debt beyond the original $100 million. Given these conditions, which of the following statements is CORRECT?
a. The higher the percentage of debt represented by mortgage bonds, the riskier both types of bonds will be and, consequently, the higher the firm’s total dollar interest charges will be.
b. If the debt were raised by issuing $50 million of debentures and $50 million of first mortgage bonds, we could be certain that the firm’s total interest expense would be lower than if the debt were raised by issuing $100 million of debentures.
c. In this situation, we cannot tell for sure how, or whether, the firm’s total interest expense on the $100 million of debt would be affected by the mix of debentures versus first mortgage bonds. The interest rate on each of the two types of bonds would increase as the percentage of mortgage bonds used was increased, but the result might well be such that the firm’s total interest charges would not be affected materially by the mix between the two.
d. The higher the percentage of debentures, the greater the risk borne by each debenture, and thus the higher the required rate of return on the debentures.
e. If the debt were raised by issuing $50 million of debentures and $50 million of first mortgage bonds, we could be certain that the firm’s total interest expense would be lower than if the debt were raised by issuing $100 million of first mortgage bonds.
a. The higher the percentage of debt represented by mortgage bonds, the riskier both types of bonds will be and, consequently, the higher the firm’s total dollar interest charges will be.
b. If the debt were raised by issuing $50 million of debentures and $50 million of first mortgage bonds, we could be certain that the firm’s total interest expense would be lower than if the debt were raised by issuing $100 million of debentures.
c. In this situation, we cannot tell for sure how, or whether, the firm’s total interest expense on the $100 million of debt would be affected by the mix of debentures versus first mortgage bonds. The interest rate on each of the two types of bonds would increase as the percentage of mortgage bonds used was increased, but the result might well be such that the firm’s total interest charges would not be affected materially by the mix between the two.
d. The higher the percentage of debentures, the greater the risk borne by each debenture, and thus the higher the required rate of return on the debentures.
e. If the debt were raised by issuing $50 million of debentures and $50 million of first mortgage bonds, we could be certain that the firm’s total interest expense would be lower than if the debt were raised by issuing $100 million of first mortgage bonds.
