Devry BUSN379 final exam Question # 00062662 Posted By: neil2103 Updated on: 04/22/2015 01:05 PM Due on: 04/30/2015 Subject Finance Topic Finance Tutorials: 1 See full Answer Question 1.(TCO 1) ) Likeline, Inc., has sales of $445,000, costs of $173,000, depreciation expense of $72,000, interest expense of $36,000, and a tax rate of 35 percent. What is their net income?(Points : 20) Question 2.2.(TCO 1) Hammett, Inc. has sales of $19,570, costs of $9,460, depreciation expense of $2,130, and interest expense of $1,620. If the tax rate is 35 percent, what is the operating cash flow, or OCF?(Points : 20) Question 3.3.(TCOs 2 and 3) App Co. issued 15-year, $1,000 bonds at a coupon rate of 6 percent. The bonds make annual payments. If the YTM on these bonds is 5 percent, what is the current bond price?(Points : 20) Question 4.4.(TCO 3) Sixteenth Bank has an issue of preferred stock with a $10 stated dividend that just sold for $70 per share. What is the bank’s cost of preferred stock? (Show your work and round your answer to two decimal places.(Points : 20) Question 5.5.(TCOs 3 and 5) You own a portfolio that has $2,500 invested in Stock A and $3,500 invested in Stock B. If the expected returns on these stocks are 10 percent and 16 percent, respectively, what is the expected return on the portfolio? (Show your work.)(Points : 20) Question 6.6.(TCO 3) A stock has a beta of 1.25, the expected return on the market is 12 percent, and the risk-free rate is 2 percent. What must the expected return on this stock be? (Show your work and express your percentage in two decimal places).(Points : 20) Question 7.7.(TCO 4) Suppose Tom, Ltd. just issued a dividend of $2.00 per share on its common stock. The company’s dividends have been growing at a rate of 7%. If the stock currently sells for $50.00, what is your best estimate of the company’s cost of equity? (Show your work.)(Points : 20) Question 8.8.(TCO 4) Given the following information, calculate the weighted average cost for the Han Corp. Percent of capital structure:Preferred stock 15%Common equity 60%Debt 25% Additional information:Corporate tax rate 34%Dividend, preferred $9.50Dividend, expected common $1.50Price, preferred $100.00Growth rate 9%Bond yield 6%Price, common $75.00(Points : 40) Question 9.9.(TCO 7) What are some important factors to consider when conducting a credit evaluation and scoring?(Points : 20) Question 10.10.(TCO 1) Explain the concept of the stakeholder in contemporary finance.(Points : 20) Question 11.11.(TCO 6) What are the factors that make up the capital asset pricing model? Where would you typically find the data for these factors?(Points : 20) Rating: 4.9/5
Solution: Devry BUSN379 final exam 2015