Finance Answers

You are thinking about investing in stock in a company that paid a dividend of $10 this year and whose dividends you expect will grow at 4 percent a year. The risk-free rate is 3 percent and you require a risk premium of 5 percent. If the price of the stock in the market is $200 a share, should you buy it?

      Black and Blue, Inc., overlooked $100,000 of inventory at the end of the current year because it was stored temporarily in a warehouse owned by another company. Before discovering this error, the company’s income statement showed the following:

                       Sales . . . . . . . . . . . . . . . . . . . . . . $990,000

                       Cost of goods sold . . . . . . . . . . (560,000)

                       Gross profit . . . . . . . . . . . . . . . $430,000

Required:

Restate these figures to reflect the inclusion of the overlooked inventory.

Ali Inc. expects to generate free-cash of $200000per year forever. If the firm's cost of capital is 0.15 percent,the firm cost of equity capital is 0.16 the market value of debt is $320000, the market value of preferred stock is $180000, and the company has 120000 shares of stock outstanding. What is the value of Ali's stock?what is the value of the firm

Answer for part 1

what is the value of the c.s?

From the national budget, budget the targeted GDP was 366,920,281,027.6 out of which the targeted Government

expenditure was 119,616,011,615. What is the expected coefficient

of public expenditures?

Implications of GATT on indian education and financing

The capital structure of ABC Pvt. Ltd is as follows: Equity share capital (eachshareofRs.10) = Rs.16, 00,000Debentures with a coupon rate of 10% = Rs. 10, 00,000Reserves and surplus = Rs.15, 00,000Revenue from the business activities for the company is Rs. 2.00 crores. Its variable cost is 10% of the revenue, fixed operating cost is Rs. 60 lakhs and the company pays income tax at a rate of 25%. (10Marks)Calculate financial leverage, operating leverage and combined leverage for the company.

A manufacturing company forecast that it is likely to sell 8, 00,000 units for the year 2021. The processing cost of an order is Rs.200 and the carrying cost per unit of inventory is Rs.16. The lead time of an order is 5 days.(a) What would be the economic order quantity (EOQ) and re-order point assuming 360 days in a year? (5 Marks)(b) The company implements business process reengineering which results in to reduction of 25% in cost of an order, 15% in carrying cost per unit of inventory and 20% in lead time of an order. What would be the new EOQ and re-order point.