The break-even point in units can be obtained by dividing total fixed expenses by the unit contribution margin.

You are considering two investment alternatives. The first is a stock that pays quarterly dividends of $0.38 per share and is t

djyliett [7]

Answer:

The 1-year HPR for the first stock is 16.18%

Explanation:

The computation is shown below:

For investment 1 -

The formula is shown below:

= (Income × quarter ) +Value at the end - Value at the beginning ÷ (Value at the beginning) × 100

= {($0.38 × 2) + $29.25 - $25.83} ÷ ($25.83) × 100

= ($0.76 + $29.25 - $25.83) ÷ ($25.83) × 100

= ($4.18 ÷ $25.83) × 100

= 16.18%

3 0

2 years ago

Dinklage corp. has 6 million shares of common stock outstanding. the current share price is $84, and the book value per share is

Ann [662]

The answers to the questions are given below.

A. The company's capital structure weights on a book value basis are:

Equity = 9.84%
Debt = 90.16%

B. The company's capital structure weights on a market value basis are:

Equity = 64.55%
Debt = 35.45%

<h3>What is the calculations about?</h3>

A. The company's capital structure weights on a book value basis are:

Firm's Outstanding common stock = 6 million shares

Current share price = $84

Book value per share = $5

Hence, Total equity book value = $30 million (6,000,000 x $5)

Total equity market value = $504 million (6,000,000 x $84)

First bond's face value = $145 million

Coupon rate = 5%

Selling price = 95% of par

Market value of first bond = $145 x 95%

= $137.75 million

The Second bond's face value = $130 million

Coupon rate = 4%

Market value = $130 x 107% = $139.1 million

Total market value of bonds = $276.85 million ($137.75 + $139.1)

Book value of bonds = $275 million ($145 + $130)

Therefore, the company's capital structure by book value:

Equity = $30 million

Debt = $275 million

So, Total firm's value = $305 million

Hence:

Equity = $30/$305 x 100 = 9.84%

Debt = $275/$305 x 100 = 90.16%

B. Hence company's capital structure by market value:

Equity = $504 million

Debt = $276.85 million

Total firm's value = $780.85 million

Therefore:

Equity = $504/$780.85 x 100 = 64.55%

Debt = $276.85/$780.85 x 100 = 35.45%

See full question below

Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $84, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $145 million, a coupon rate of 5 percent, and sells for 95 percent of par. The second issue has a face value of $130 million, a coupon rate of 4 percent, and sells for 107 percent of par. The first issue matures in 24 years, the second in 9 years. Both bonds make semiannual coupon payments.

Required:

a. What are the company's capital structure weights on a book value basis?

b. What are the company's capital structure weights on a market value basis?

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4 0

2 years ago

A nation's capital goods wear out over time, so a portion of its capital goods become unusable every year. last year, its reside

My name is Ann [436]

In the current year, the nation's economic growth will be negative. This is an outcome produced by all factors involved. There have been no capital goods produced, and therefore, no income can be generated by capital goods. There has been no growth in population or in any productive resources that could yield come kind of economic growth for the nation.

8 0

2 years ago

Damien McCoy has loaned money to his brother at an interest rate of 5.85 percent. He expects to receive $987, $1,012, $1,062, an

yKpoI14uk [10]

Answer:

The answer is: $3,657

Explanation:

To determine the amount of the loan we have to calculate the present value of the future payments discounting the interest rate of 5.85%.

PV loan = $987 + $1,012 + $1,062 + $1,162

1.0585 1.0585^2 1.0585^3 1.0585^4

PV loan = $932.45 + 903.23 + 895.47 + 925.64

PV loan = $3,656.80

3 0

2 years ago

You just sold a futures contract on €. Each contract is for €125,000 and the price you sold for the € is $1.20 for each €. What

Yuliya22 [10]

Answer:

The profit is $12,500

Explanation:

The profit on the contract can be computed using the formula below:

profit/loss on the contract=(forward price-spot rate)*volume of currency sold

forward price is 1 euro to $1.20

spot price 1 euro to $1.10

volume of currency sold is Euros 125,000

profit/loss on the contract=($1.20-$1.10)*125,000

=$12,500

Invariably the trader sold each US dollar $0.10 more than the spot rate ($1.20-$1.10),when that is multiplied the volume of Euros sold,it gives $12,500 in profit.

This implies that the buyer could have bought the currency cheaper on contract date

3 0

2 years ago