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Chapter 21 Problem Set—Do Problems 1, 2, and 3 on pages 428–429 of the textbook.Chapter 22 Problem Set—Do Problems 1, 3, 4, 5, 7, 10, and 11 on 465–469 of the textbook Chapter 25 Problem Set—Do Problems 5, 6, and 14 on pages 558–561 of the textbook.Chapter 26 Problem Set—Do Problems 3, 6, 8, 11, and 12 on pages 585–586 of the textbook.Chapter 21, Problem 1.HBM, Inc. has the following capital structure: Assets $400,000 Debt $140,000 Preferred stock 20,000 Common stock 240,000 The common stock is currently selling for $15 a share, pays a cash divi dend of $0.75 per share, and is growing annually at 6 percent. The pre ferred stock pays a $9 cash dividend and currently sells for $91 a share. The debt pays interest of 8.5 percent annually, and the firm is in the 30 percent marginal tax bracket.a. What is the after-tax cost of debt?b. What is the cost of preferred stock?c. What is the cost of common stock?d. What is the firm’s weighted-average cost of capital?Chapter 21, Problem 2.Sun Instruments expects to issue new stock at $34 a share with estimated flotation costs of 7 percent of the market price. The company currently pays a $2.10 cash dividend and has a 6 percent growth rate. What are the costs of retained earnings and new common stock?Chapter 21, Problem 3.A firm’s current balance sheet is as follows:Assets $100Debt $10Equity $90a. What is the firm’s weighted-average cost of capital at various combinations of debt and equity, given the following information? b. Construct a pro forma balance sheet that indicates the firm’s optimal capital structure. Compare this balance sheet with the firm’s current balance sheet. What course of action should the firm take?Assets $100Debt ?Equity ?c. As a firm initially substitutes debt for equity financing, what happens to the cost of capital, and why?d. If a firm uses too much debt financing, why does the cost of capital rise?Chapter 22, Problem 1.An investment costs $23,958 and will generate cash flow of $6,000 annually for five years. The firm’s cost of capital is 10 percent.a. What is the investment’s internal rate of return? Based on the internal rate of return, should the firm make the investment?b. What is the investment’s net present value? Based on the net present value, should the firm make the investment?

Attachments:

Assignment-2.doc

HBM, Inc. has the following capital structure: Assets $400,000 Debt $140,000 Preferred stock 20,000 Common stock 240,000 The common stock is currently selling for $15 a share, pays a cash divi dend of $0.75 per share, and is growing annually at 6 percent. The pre ferred stock pays a $9 cash dividend and currently sells for $91 a share. The debt pays interest of 8.5 percent annually, and the firm is in the 30 percent marginal tax bracket.a. What is the after-tax cost of debt?b. What is the cost of preferred stock?c. What is the cost of common stock?d. What is the firm’s weighted-average cost of capital?

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Chapter 21 Problem Set—Do Problems 1, 2, and 3 on pages 428–429 of the textbook.
Chapter 22 Problem Set—Do Problems 1, 3, 4, 5, 7, 10, and 11 on 465–469 of the textbook
Chapter 25 Problem Set—Do Problems 5, 6, and 14 on pages 558–561 of the textbook.
Chapter 26 Problem Set—Do Problems 3, 6, 8, 11, and 12 on pages 585–586 of the textbook.

Chapter 21, Problem 1.
HBM, Inc. has the following capital structure: Assets $400,000 Debt $140,000 Preferred stock 20,000 Common stock 240,000 The common stock is currently selling for $15 a share, pays a cash divi dend of $0.75 per share, and is growing annually at 6 percent. The pre ferred stock pays a $9 cash dividend and currently sells for $91 a share. The debt pays interest of 8.5 percent annually, and the firm is in the 30 percent marginal tax bracket.

a. What is the after-tax cost of debt?

b. What is the cost of preferred stock?

c. What is the cost of common stock?

d. What is the firm’s weighted-average cost of capital?

Chapter 21, Problem 2.
Sun Instruments expects to issue new stock at $34 a share with estimated flotation costs of 7 percent of the market price. The company currently pays a $2.10 cash dividend and has a 6 percent growth rate. What are the costs of retained earnings and new common stock?

Chapter 21, Problem 3.
A firm’s current balance sheet is as follows:

Assets $100
Debt $10
Equity $90

a. What is the firm’s weighted-average cost of capital at various combinations of debt and equity, given the following information?

b. Construct a pro forma balance sheet that indicates the firm’s optimal capital structure. Compare this balance sheet with the firm’s current balance sheet. What course of action should the firm take?

Assets $100
Debt ?
Equity ?

c. As a firm initially substitutes debt for equity financing, what happens to the cost of capital, and why?

d. If a firm uses too much debt financing, why does the cost of capital rise?

Chapter 22, Problem 1.
An investment costs $23,958 and…

Attachments:

Assignment-2.doc

1. ABC Inc. 2018 sales are $1,100,000. Operating costs (excluding depreciation) are 70% of sales. Net fixed assets are $205,000. Depreciation amounted to 15% of net fixed assets. Interest expenses are $100,000. The tax bill must be calculated using the corporate income tax table in the text, and ABC Inc. paid 8% of net income in dividends.

Attachments:

BJ-Week-2-Ass….xlsx

My question is for Richard.My mother has some stock when she passed away in March of 2016. Over two years later in October of 2018, I filled out the proper forms to transfer the shares to myself. I have no intentions of selling but I am wondering about the tax basis. I think I would step up the basis to the fair market value at the time of the transfer, which was October of 2018 and not March of 2016. Is that correct?

I need to know what healthcare organization did you use for this assignment. Perform an internet search for a current health care organization of your choice (preferably publicly traded for-profit organizations because these organizations must report all financial data and make it available to the public). In your search, select and evaluate the report of the financial information from the past 4 quarters or more. Complete the following for this assignment: Predict the effect of changes in all financial metrics to changes in a proposed strategic plan in your chosen organization for the following 3 scenarios: Payer mix changes from 50% Medicare and 5% Medicaid patients to 70% Medicare and 10% Medicaid patients in 1 year. Professional turnover goes from 5% annually to 10% annually. Demand for services increases 20% in 1 year Search course materials including your text and the Internet for assistance in completing applicable financial calculations for this assignment. Using the statements that you located, provide a financial plan that will do the following: Create projected financial statements to analyze effects of alternate operating assumptions on the firm’s financial condition Determine the projected financial requirements that will be needed to support each of the 3 sets of alternate operating instructions Forecast the financial sources that might be needed to support your alternative assumptions Assess the projected results using a financial condition analysis to the forecasted data Provide appropriate spreadsheets such as Projected Income Statement and Projected Balance Sheets to validate your projected assumptions. Consider the effect of the following factors to justify the changes that may be needed to the strategic plan as a result of your analysis: Validity of data in the decision-making process Revenue growth rate Capacity Rate of turnover

Complete the following homework scenario: Using only websites ending in .gov, report the current GDP, the current Federal deficit, the current Federal debt, and the bottom line of the current (last) budget approved by Congress (surplus or shortage). Note that the fiscal year for the federal government is October 1 – September 31. What inference can you draw from the numbers collected?

https://www.youtube.com/watch?v=bx_LWm6_6tA Contagion Effects of Credit Crisis: Explain how the credit crisis adversely affected many other people beyond homeowners and mortgage companies. Do you believe the impact of the credit crisis is still being felt today? Please explain, be thorough in your response and provide any available citations.

Indicate the companies you are investing in: Select three (3) US companies that are publicly traded. Please use your knowledge and experience and pick as many stocks as you’d like. Make sure you are practicing good diversification. Jim Cramer, Money Manager, on CNBC, plays a game at the end of his show called “Am I Diversified.” Check out a short clip to get a sense of industry diversification at https://www.youtube.com/watch?v=f3lDxexupcE. Sources of Information: There are many ways to find such companies and the stock prices, including the New York Stock Exchange at http://www.nyse.com, Google Finance at http://google.com, NASDAQ at http://www.nasdaq.com, and http://finance.yahoo.com. Indicate the amount you are investing in each company: Decide how you will divide $25,000 across the three (3) companies; e.g. $10,000 in Company 1, $10,000 in Company 2, and $5,000 in Company 3. You decide the amount you are investing in each company. You do not have to provide any analysis to justify your decisions. You must only provide some reason for picking that company. For example, you might invest in Ford because that company gets a lot of your money and you hear that Ford is doing well, and will continue to do well. Indicate the number of shares you are buying, and the price of the shares you are buying for each company: Once you decide the companies and the amount for each company, determine how many shares you can buy. If Company 1 is selling for $42.16, then you may buy $10,000/ $42.16, or 237.19 shares. But you cannot buy a part of a share, so you decide to buy either 237 or 238. In this example you buy 237 shares, at $42.16 per share, investing $9,991.92. You won’t be able to buy exactly $10,000, or $5,000, or $25,000, but it will be relatively close.

1. Frame the issue. Briefly describe why South Carolina is planning to invest state pensionmoney in the stock market.2. Briefly discuss the pros and cons of investing in the stock market.3. Compute the mean and standard deviation for the returns corresponding to each of theasset classes in Exhibit 1. Discuss the risk and return relation for stocks and bonds.4. Calculate the mean monthly returns and standard deviations for each of the Dow 30stocks (in Exhibit 2) over January 1990 to June 1998 period. Compare the mean returnand standard deviation relation across the Dow 30 stocks versus the mean return andstandard deviation relation across the various asset classes from Exhibit 1.Note: To facilitate a meaningful comparison between Exhibit 2 and Exhibit 1, you mayannualize the monthly return statistics by the following approximating convention:mean annual return ˜ 12*(mean monthly return)standard deviation of annual return ˜ v12 *(standard deviation of monthly return)5. Compute the mean return and the standard deviation of 2-stock portfolio consisting ofExxon and General Electric. Compare the portfolio standard deviation to the averagestandard deviation of the two stocks. Repeat the analysis for General Electric andGeneral Motors.6. Compute the mean return and the standard deviation of 5-stock portfolio (your pick ofany 5 stocks) in the Dow 30. Compare the portfolio standard deviation to the averagestandard deviation of the five stocks.7. Compute the mean return and the standard deviation of 10-stock portfolio (your pick ofany 10 stocks) in the Dow 30. Compare the portfolio standard deviation to the averagestandard deviation of the ten stocks.8. Compute the mean return and the standard deviation of 20-stock portfolio (your pick ofany 20 stocks) in the Dow 30. Compare the portfolio standard deviation to the averagestandard deviation of the twenty stocks.9. Discuss the relation between the number of firms in a portfolio and the standarddeviation of the portfolio.10. Compute average returns and standard deviations corresponding to country bond andstock data displayed in Exhibit 3. Compare and discuss the difference between stocksand bonds for the country data.11. Compute the mean return and the standard deviation of 2-country stock portfolioconsisting of Germany and The Netherlands. Compare the portfolio standard deviationto the average standard deviation of the two countries. Repeat the analysis for Germanyand Japan.12. In your opinion, what are three key learning points from this case?

Attachments:

FIN621-Assign….pdfFIN-621-Assig….xlsx

Name _____________________________ Date____________ Chapter 7 Problem 12 Complete the spreadsheet to estimate the project’s annual after-tax cash flows. What is the investment’s net present value at a discount rate of 10 percent? What is the investment’s internal rate of return? Present the factors used in the financial calculator ____________________ Facts and Assumptions Equipment initial cost $350,000 Depreciable life yrs. 7 Expected life yrs. 10 Salvage value $0 Straight line depreciation EBIT in year 1 $28,000 Tax rate 38% Growth rate in EBIT 3% Discount rate 10% Year 0 1 2 3 4 5 6 7 8 9 10 Initial cost 350,000 Annual depreciation (cash to be added) $50,000 50,000 50,000 EBIT $28,000 Taxes $10,640 EBIT after tax $17,360 After-tax cash flow (350,000) $67,360 How does the internal rate of return change if the discount rate equals 20 percent? Internal Rate of Return at 20% Present the factors used in the financial calculator ____________________

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HC2091: Finance for Business

Trimester 3 2018

Group Assignment

Assessment Value: 30%

Due Date: Sunday 23:59 pm, Week 10
Group: 2 – 5 students
Length: 3000 words ± 10%

INSTRUCTIONS
Students are required to form a group to study, undertake research, analyse and conduct academic
work within the areas of business finance covered in learning materials Topics 1 to 10 inclusive.
The assignment should examine the main issues, including underlying theories, implement
performance measures used and explain the firm financial performance. Your group is strongly
advised to reference professional websites, journal articles and text books in this assignment (case
study).
Tasks
This assessment task is a written report and analysis of the financial performance of a selected
listed company on the ASX in order to provide financial and investment advice to a wealthy
investor. This assignment requires your group to undertake a comprehensive examination of a
firm’s financial performance based on update financial statements of the chosen companies.
Group Arrangement
This assignment must be completed IN Group. Each group can be from 2 to maximum 5 student
members. Each group will choose 1 company and once the company has been chosen, the other
group cannot choose the same company. First come first served rule applies here, it means you
need to form your group, choose on company from the list of ASX and register them with your
lecturer as soon as possible. Once your lecturer registers your chosen company, it cannot be
chosen by any other group. Your lecturer then will put your group on Black Board to enable you
to interact and discuss on the issues of your group assignment using Black Board environment.
However, face to face meeting, discussion and other methods of communication are needed to
ensure quality of group work. Each group needs to have your own arrangement so that all the
group members will contribute…

Attachments:

HC2091-Group-….pdf