Which of the following is a primary market transaction?

Which of the following is a primary market transaction?

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  1. Which of the following is a primary market transaction?
  2. Which of the following statements is CORRECT?

  3. Which of the following statements is CORRECT?

  4. Which of the following statements is CORRECT?

  5. Which of the following statements is CORRECT?

  6. Which of the following statements is CORRECT?

  7. For managerial purposes, i.e., making decisions regarding the firm's operations, the standard financial statements as prepared by accountants under Generally Accepted Accounting Principles (GAAP) are often modified and used to create alternative data and metrics that provide a somewhat different picture of a firm's operations. Related to these modifications, which of the following statements is CORRECT?

  8. Which of the following statements is CORRECT?

  9. Pettijohn Inc.
    The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

    Balance Sheet (Millions of $)

     

    Assets

    2016

    Cash and securities

    $  1,554.0

    Accounts receivable

    9,660.0

    Inventories

      13,440.0

    Total current assets

    $24,654.0

    Net plant and equipment

      17,346.0

    Total assets

    $42,000.0

    Liabilities and Equity

     

    Accounts payable

    $  7,980.0

    Notes payable

    5,880.0

    Accruals

        4,620.0

    Total current liabilities

    $18,480.0

    Long-term bonds

      10,920.0

    Total debt

    $29,400.0

    Common stock

    3,360.0

    Retained earnings

        9,240.0

    Total common equity

    $12,600.0

    Total liabilities and equity

    $42,000.0

     

     

    Income Statement (Millions of $)

    2016

    Net sales

    $58,800.0

    Operating costs except depr'n

    $54,978.0

    Depreciation

    $  1,029.0

    Earnings bef int and taxes (EBIT)

    $  2,793.0

    Less interest

        1,050.0

    Earnings before taxes (EBT)

    $  1,743.0

    Taxes

    $     610.1

    Net income

    $  1,133.0

    Other data:

     

    Shares outstanding (millions)

    175.00

    Common dividends

    $   509.83

    Int rate on notes payable & L-T bonds

    6.25%

    Federal plus state income tax rate

    35%

    Year-end stock price

    $77.69

     

    Refer to the data for Pettijohn Inc. What is the firm's ROA?

  10. Ziebart Corp.'s EBITDA last year was $390,000 ( = EBIT + depreciation + amortization), its interest charges were $9,500, it had to repay $26,000 of long-term debt, and it had to make a payment of $17,400 under a long-term lease. The firm had no amortization charges. What was the EBITDA coverage ratio?

  11. Which of the following statements is CORRECT?

  12. Which of the following statements regarding a 20-year monthly payment amortized mortgage with a nominal interest rate of 10% is CORRECT?

  13. You sold your motorcycle and accepted a note with the following cash flow stream as your payment. What was the effective price you received for the car assuming an interest rate of 6.0%?

  14. Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to open a new restaurant, and your uncle offers to give you $120,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment?

  15. Jerome Corporation's bonds have 15 years to maturity, an 8.75% coupon paid semiannually, and a $1,000 par value. The bond has a 6.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,050. What is the bond's nominal yield to call?

  16. Which of the following statements is CORRECT?

  17. Curtis Corporation's noncallable bonds currently sell for $1,165. They have a 15-year maturity, an annual coupon of $95, and a par value of $1,000. What is their yield to maturity?

  18. Which of the following statements is CORRECT?

  19. Stock A has a beta of 0.8, Stock B has a beta of 1.0, and Stock C has a beta of 1.2. Portfolio P has 1/3 of its value invested in each stock. Each stock has a standard deviation of 25%, and their returns are independent of one another, i.e., the correlation coefficients between each pair of stocks is zero. Assuming the market is in equilibrium, which of the following statements is CORRECT?

  20. Which of the following statements is CORRECT?

  21. Franklin Corporation is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25). The stock sells for $32.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?

  22. The value of Broadway-Brooks Inc.'s operations is $900 million, based on the free cash flow valuation model. Its balance sheet shows $70 million in accounts receivable, $50 million in inventory, $30 million in short-term investments that are unrelated to operations, $20 million in accounts payable, $110 million in notes payable, $90 million in long-term debt, $20 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 25 million shares of stock outstanding, what is the best estimate of the stock's price per share?

  23. Which of the following statements is CORRECT?

  24. Which of the following statements is CORRECT?

  25. McGaha Enterprises expects earnings and dividends to grow at a rate of 25% for the next 4 years, after the growth rate in earnings and dividends will fall to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?


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