Beranek corp. has $410,000 of assets

Question 1. (TCO A) Which of the following statements is CORRECT?

a.      One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.    

b.      It is generally easier to transfer one’s ownership interest in a partnership than in a corporation.

c.       One of the advantages of the corporate form of organization is that it avoids double taxation.

d.      One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., “one person, one vote.”

e.       Corporations of all types are subject to the corporate income tax.

 

Question 2. (TCO G) Aubey Aircraft recently announced that its net income increased sharply from the previous year, yet its net cash flow from operations declined. Which of the following could explain this performance?

a.       The company’s operating income declined.

b.      The company’s expenditures on fixed assets declined.

c.       The company’s cost of goods sold increased.

d.      The company’s depreciation and amortization expenses declined.

e.       The company’s interest expense increased.

 

Question 3.3. (TCO G) Beranek Corp. has $410,000 of assets, and it uses no debt—it is financed only with common equity. The new CFO wants to employ enough debt to bring the debt to assets ratio to 40%, using the proceeds from the borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio?

a.       $155,800

b.      $164,000

c.       $172,200

d.      $180,810

e.       $189,851

 

Calculation:

See in attachment

 

Question 4.4. (TCO B) Suppose a State of New York bond will pay $1,000 10 years from now. If the going interest rate on these 10-year bonds is 5.5%, how much is the bond worth today?

a.      $585.43

b.      $614.70

c.       $645.44

d.      $677.71

e.       $711.59

 

Calculation:

See in attachment

 

Question 5.5. (TCO B) You sold a car and accepted a note with the following cash flow stream as your payment. Which was the effective price you received for the car, assuming an interest rate of 6.0%?

Years: 0 1 2 3 4

|———–|————–|————–|————–|

CFs: $0 $1,000 $2,000 $2,000 $2,000 (Points : 10)

 

a.      $5,987

b.      $6,286

c.       $6,600

d.      $6,930

e.       $7,277

 

 

Question 6.6. (TCO B) Suppose you borrowed $12,000 at a rate of 9.0% and must repay it in four equal installments at the end of each of the next 4 years. How large would your payments be?

a.      $3,704.02

b.      $3,889.23

c.       $4,083.69

d.      $4,287.87

e.       $4,502.26

 

Calculation:
See in attachment

 

Question 7.7. (TCO D) A 15-year bond with a face value of $1,000 currently sells for $850. Which of the following statements is correct?

a.       The bond’s coupon rate exceeds its current yield.

b.      The bond’s current yield exceeds its yield to maturity.

c.       The bond’s yield to maturity is greater than its coupon rate.

d.      The bond’s current yield is equal to its coupon rate.

e.       If the yield to maturity stays constant until the bond matures, the bond’s price will remain at $850.

 

Question 8.8. (TCO D) Garvin Enterprises’ bonds currently sell for $1,150. They have a 6-year maturity, an annual coupon of $85, and a par value of $1,000. Which is their current yield?

 

a.      7.39%

b.      7.76%

c.       8.15%

d.      8.56%

e.       8.98%

 

Calculation:

The current yield is the  xxxxxxx divided by  the xxxxxxxxxxx the bond

Annual Coupon = 85$

Current xxxxxx price = xxxx

Current yield = 8xxx = 0.xxxx or 7.xx%
See in attachment

 

Question 9.9. (TCO C) Keys Corporation’s 5-year bonds yield 7.00%, and 5-year T-bonds yield 5.15%. The real risk-free rate is r* = 3.0%, the inflation premium for 5-year bonds is IP = 1.75%, the liquidity premium for Keys’ bonds is LP = 0.75% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t – 1) × 0.1%, where t = number of years to maturity. Which is the default risk premium (DRP) on Keys’ bonds?

 

a.       0.99%

b.      1.10%

c.       1.21%

d.      1.33%

e.       1.46%

 

Calculation

See in attachment

 

Question 10.10. (TCO C) Assume that the risk-free rate remains constant but the market risk premium declines. Which of the following is most likely to occur?

 

a.       The required return on a stock with beta = 1.0 will not change.

b.      The required return on a stock with beta > 1.0 will increase.

c.       The return on the market will remain constant.

d.      The return on the market will increase.

e.       The required return on a stock with beta < 1.0 will decline.

 

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

Read more

Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency