Each bond would have 75 warrants attached to it, each exercisable into one share of stock at an exercise price of $47. The firm’s straight bonds yield 10%. Each warrant is expected to have a market value of $2.00 given that the stock sells for $42. What coupon interest rate must the company set on the bonds in order to sell the bonds-with-warrants at par? Question 24 Europa Corporation is financing an ongoing construction project.
First home buyers who build a new house will receive $21,000, in an attempt to stimulate the construction industry. This measure is worth $1.5 billion. The government will spend $187 million to provide 56,000 training places in 2008-09. - AustralianPolitics, October 14, 2008
Problem 17-15 on Distribution to Shareholders based on Chapter 17 Payout Policy Suppose that all capital gains are taxed at a 25% rate and that the dividend tax rate is 50%. Arbuckle Corporation is currently trading for $30 and is about to pay a $6 special dividend. a. Absent any other trading frictions or news, what will its share price be just after the dividend is paid? Suppose Arbuckle made a surprise announcement that it would do a share repurchase rather than pay a special dividend.
Capital Budgeting Case Virginia Sacco University of Phoenix Quantitative Reasoning for Business QRB 501 Li Guohong March 10, 2014 Capital Budgeting Case My company is contemplating to acquire another corporation, “Corporation A” or “Corporation B” on a $250,000 budget. Corporation A: Revenues = $100,000 in year one, increasing by 10% each year. Expenses = $20,000 in year one, increasing by 15% each year/ Depreciation expense = $5,000 each year. Tax rate = 25%. Discount rate = 10%.
WWA sells the electricity it generates to local utilities. Two wholly owned WWA subsidiaries operate out of Oahu, HI: Kahuku Wind Inc. operates an onshore wind farm near Kahuku and North Shore Wave Electric Inc. (“NS Wave”) operates a wave-power farm near the northern tip of Oahu. NS Wave also uses generators similar to OPT’s piston-driving buoy. Kahuku Wind and NS Wave sell the electricity they generate to local utility companies. Relevant quantitative information and key financial metrics are included below: Selected Data General Information Number of turbines Power generating capacity (MW) Homes served Average rate Average per capita consumption (kwh) Initial cost of turbines Year end Financial information Total assets (most recent balance sheet date) Revenue (most recent fiscal year) WWA Wind 37 93.49 14,607 0.0813 Wave 2 0.30 50 0.0813 12,077 13,400,000 12/31 Kahuku Wind 12 30.00 7,700 0.2413 7,363 140,000,000 10/31 NS Wave 9 1.50 400 0.2413 Consolidated 60 125 22,757 $ 12,077 $ 432,000,000 12/31 7,363 60,000,000 $ 645,400,000 10/31 $ 345,600,000 64.6% $ 14,342,111 49.8% 9,380,000 1.8%
Basic flexible budgeting Centron, Inc., has the following budgeted production costs: |Direct materials |$0.40 per unit | |Direct labor |1.80 per unit | |Variable factory overhead |2.20 per unit | |Fixed factory overhead | |Supervision |$24,000 | |Maintenance |18,000 | |Other |12,000 | The company normally manufactures between 20,000 and 25,000 units each quarter. Should output exceed 25,000 units, maintenance and other fixed costs are expected to increase by $6,000 and $4,500,
Currently, CMS Energy financial perspective defined by the profit margin is at 7.20%. The shareholder value is defined by the dividends that are paid to the shareholders who are currently at 55.00%. By including the Mega Meter into the daily operations, stock prices would rise from 2.82 per share because of the advantages that using this meter with the prevention of
One disadvantage of NAFTA is the loss of manufacturing jobs which would occur from the shift of multinational corporations to Mexico. The relocation of plants by many corporations to head south of the border into Mexico comes about because of the lower cost of production. This is because Mexico has cheaper unskilled labor due to non-existent minimum wage rates. In almost every case money usually leads the way. With respect to NAFTA, the shift is to Mexico.
“Its purpose is to help bring back a more fair federal minimum wage, providing America’s lowest-paid workers with a much needed raise” (Congress). The act would raise the federal minimum wage to $10.10 per hour over the next three years. Each yearly increment would increase the rate by 95 cents. After the three years of this act passing, the Secretary of Labor would determine if it was necessary to increase the minimum wage rate based on the Consumer Price Index. For tipped workers, a minimum pay would be seventy percent of the most recent minimum
Worker productivity is the main determinant of what employers are willing to pay. Most working people are not directly affected by the minimum wage because their productivity and, hence, their pay, is already well above it.”(David R. Henderson, "The Negative Effects of the Minimum Wage). Still the main opposing argument is a job with little pay is still better than no