Business Finance Help for College and University Students

Managerial Finance 476(II)

4. The Beasley Corporation has been experiencing declining earnings, but has just announced a 50 percent salary increase for its top executives. A dissident group of stockholders wants to oust the existing board of directors. There are currently 11 directors and 30,000 shares of stock outstanding. Mr. Wright, the president of th ...continues

Managerial Finance 476(II)

5. Midland Petroleum is holding a stockholders' meeting next month. Ms. Ramsey is the president of the company and has the support of the existing board of directors. All 11 members of the board are up for reelection. Mr. Clark is a dissident stockholder. He controls proxies for 40,001 shares. Ms. Ramsey and her friends on the b ...continues

Managerial Finance 476(II)

8. Rust Pipe Co. was established in 1985. Four years later the company went public. At that time, Robert Rust, the original owner, decided to establish two classes of stock. The first represents Class A founders' stock and is entitled to 10 votes per share. The normally traded common stock, designated as Class B, is entitled to ...continues

Managerial Finance 476(II)

11. Todd Winningham IV has $4,000 to invest. He has been looking at Gallagher Tennis Clubs, Inc., common stock. Gallagher has issued a rights offering to its common stockholders. Six rights plus $38 cash will buy one new share. Gallagher's stock is selling for $50 ex-rights. a. How many rights could Todd buy with his $4,000? ...continues

Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for 1.5 million.

Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for 1.5 million. Medical Labs will provide the following pattern of cash inflows and synergistic benefits for the next 25 years. There is no tax loss carry forward. Years ...continues

Managerial Finance 476(II)

3. Suppose an Austrian schilling is selling for $0.0613 and an Irish punt is selling for $1.0541. What is the exchange rate (cross rate) of the Austrian schilling to the Irish punt? That is, how many Austrian schillings are equal to an Irish punt?

Cross rate

3. Suppose an Austrian schilling is selling for $0.0613 and an Irish punt is selling for $1.0541. What is the exchange rate (cross rate) of the Austrian schilling to the Irish punt? That is, how many Austrian schillings are equal to an Irish punt?

Purchasing power parity

5. From the base price level of 100 in 1974, German and U.S. price levels in 2001 stood at 200 and 370, respectively. If the 1974 $/DM exchange rate was $0.23/DM, what should the exchange rate be in 2001? Suggestion: Using the purchasing power parity, adjust the exchange rate to compensate for inflation. That is, determine t ...continues

A recent Bond listing in the Wall Street Journal provided the following information for RDJ Company.

Please choice the correct answer. 1. A recent Bond listing in the Wall Street Journal provided the following information for RDJ Company. Bonds Current Yield Vol RDJ 73/4 07 8.1 169 The asking price for this bond would be calculated at: a. $875.37 b. $1,000.00 c. $988.43 d. $1,011.65 2. Williams ...continues

Assume that the after-tax cost of debt is 7%, the cost of preferred stock is 9%, and the cost of common stock is 12%.

6. Assume that the after-tax cost of debt is 7%, the cost of preferred stock is 9%, and the cost of common stock is 12%. Debt is 50% of long-term financing, preferred stock is 15%, and common stock is 35%. What is the weighted average cost of capital? a. 9.33% b. 10.25% c. 9.05% d. 8.89% 7. A company has just announced ...continues