Essay on Fin-516 Week 1 – Homework Assignment

You recently sold 100 shares of your new company, XYZ Corporation, to your brother at a family reunion. At the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. Which of the following statements best describes this

Research Problem 1) New Gate corporation desires to acquire Old Post in a non-taxable transaction. Prior to entering into this transaction with New Gate, Old Post issues $800,000 worth of 15-year bonds paying 6% annually. The bonds are purchased by most of Old Post’s shareholders and also by many individuals who have no affiliation with Old Post. New Gate makes an offer to the shareholders to exchange two shares of its common voting class A stock for each common share of Old Post and 20 of common voting class B stock for each preferred share of Old Post.

Woolworths Limited (WOW), which is one of the listed companies in Australian Security Exchange (ASX) (ASX 200), is the largest supermarket in Australia (Kruger 2013), it specializes in the groceries, food and retailing (WOOLWORTHS LIMITED (WOW) 2013). The aim of this report is to estimate and determine the dividend growth rate, stock return and current share price of Woolworths. Methods used for the estimation include dividend growth model, Capital Asset Pricing Model (CAPM) and Gordon’s Growth Model. The results of the estimation indicate that the dividend payments will continuous increasing in the future, the return on the company’s assets is reasonable and its share price is

1) Consider a firm with two classes of zero-coupon debt: senior debt and junior debt. Suppose that the firm’s debt securities both mature at time T1 and the senior ranking debt has a face value of X1 and the junior ranking debt has a face value of X2 . The claims of the senior debt holders are paid first, before the claims of the junior debt holders, who in turn are paid out their claims before the equity holders. The equity holders have limited liability. (a) Suppose that the total firm value at maturity is denoted as VT1 . Find the payoff of the shareholders, the senior debt holders, and the junior debt holders at time T1 . (b) Hence find the expressions

Corporate finance is important because it enables managers to have an understanding of what funds would be necessary for upcoming projects and projects of their company as well as allowing them to plan ahead.

A review of the company's inventory and cost records for the most recently completed year revealed the following information:

Middlesex Plastics Manufacturing had 2011 Net Income of $15.0 Million. Its 2012 Net Income is forecast to increase by 8%. The company’s capital structure has been 35% Debt and 65% Equity since 2010, and the company plans to maintain this capital structure in 2012. The company paid $3.0 Million cash dividends in 2011. The company is planning to invest in a major capital project in 2012. The capital budget for this project is $12.0 Million in 2012.

1. Read "Case 9: National Collegiate Athletic Association Ethics and Compliance Program, pp 444-454. Answer the questions at the end of the case.

B. Suppose you have two bank accounts, one called Account A and another Account B. Account A will be worth $6,500.00 in one year. Account B will be worth $12,600.00 in two years. Both accounts earn 6% interest. What is the present value of each of these accounts?

23. Jockey Company has total assets worth $4,417,665. At year-end it will have net income of $2,771,342 and pay out 60 percent as dividends. If the firm wants no external financing, what is the growth rate it can support?

• The shareholders are willing to sell back their shares at a price of $36.92

Question 3: Woolford Inc. declared a cash dividend of $1.38 per share on its 2.22 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15. Prepare the journal entries necessary on those three dates.

Suppose you are provided the following balance sheet information for two firms, Firm A and Firm B (in thousands of dollars).

a. What is its yield to maturity (YTM)? Round your answer to two decimal places.

The value of the call is the stock price minus the present value of the exercise price, so: