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FIFTH QUIZ FNCE 238/738 March 28, 2012
WRITE ALL ANSWERS ON THE TEST. IF YOUR ANSWER CONTINUES ON THE BACK, MAKE A NOTE OF IT ON THE FRONT.
30 PTS / 25 MINUTES NAME:_____________________________________________ SECTION (10:30, 12, 1:30):__________________________________
1.
(6 pts) From the Fulton County Daily Report
, August 5, 2010: THE PUBLIC STOCK offering of KKR & Co. put me in mind of three vexing questions. First, if KKR is based on the premise that private equity is a better, more efficient form of organization, why did KKR itself go public? Second, is there evidence that private equity is truly better? Does society benefit? Do investors? Or only the fund managers who pocket those gargantuan fees? Third, what happened to Congress's plan to end the tax break that benefits managers of privateequity funds, as well as other investment funds? … In a celebrated 1989 essay, Harvard's Michael Jensen predicted the "Eclipse of the Public Corporation." Jensen's enthusiasm proved to be the peak. As early deals begat high profits, capital rushed in, pushing up buyout prices. Deals such as KKR's acquisition of RJR Nabisco didn't make sense, not that that cooled the dealmakers' ardor.
Briefly, on what did Jensen base his enthusiasm? (bullet points are fine)
2.
(6 pts) From Corporate Counsel, March 23, 2012: To have a staggered board, or not to have a staggered board? That’s the corporate governance question sparked by this week’s progress report from the Harvard Law School Shareholder Rights Project (SRP), and an ensuing sharp rejoinder penned by AmLaw 100 firm Wachtell, Lipton, Rosen & Katz. … [Steven] Davidoff, a law professor at Ohio State University, took a deep dive on staggered board trends and literature in the Times, pre-Wachtell memo blast. He encountered a puzzling pattern: on the one hand, company boards in the S&P 500 are increasingly becoming declassified, dropping from 302 staggered boards in 2002 to 126 staggered boards today. On the other hand, companies that have only recently gone public—such as LinkedIn and Angie’s List—are increasingly doing so with staggered boards in place.
Briefly, what could the law firm argue in favor of staggered boards, and what could be the argument against them? (bullet points are fine)
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3.
(6 pts) From the rating agency Fitch, March 23, 2012: There appears to be no near-term break in sight for U.S. prime credit card ABS performance, while retail card results came in mixed, according to the latest index results from Fitch. Highlighted by consistent positive collateral performance trends, prime credit card ABS maintained strong momentum into the month of February, with chargeoffs continuing to fall while declining to levels not seen since the end of 2007. Credit card ABS ratings are expected to remain stable and early amortization risk is expected to remain remote.
What is early amortization risk, to whom is this risk important, and what would cause this risk to be remote? (bullet points are fine)
4.
(12 pts) Two analysts at Fidelity, Bob and Ray, are promoted to managing open-end mutual funds, with Bob managing the Blue Fund and Ray managing the Red Fund. Suppose that investors expect former analysts to add, on average, $20MM/year to the funds they manage. Suppose also that, if a former analyst makes a +25% return in his first year, investors upgrade their expectations to $30MM/year, and if he makes a -25% return, investors downgrade their expectations to $10MM year. Suppose finally that investors require a 5%/year expected return. a.
(4 pts) How much would you expect investors to invest in each fund initially? b.
(4 pts) If Bob makes a +25% return and Ray makes a -25% return in the first year, how much would you expect to be invested in each fund as they start their second years?
c.
(4 pts) In general, would you expect the open-end funds of higher-skilled managers to be better investments for your money? What considerations are important? (bullet points are fine)
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Salma wants to save money to open a tutoring center. She buys an annuity with a monthly payment of $27 that pays 3.7% interest, compounded
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three months. Deferred Revenue was credited on November 28.
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Suppose you invest $120 a month for 5 years into an account earning 8% compounded monthly. After 5
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Your first internship assignment is to prepare two schedules for Windsor Blue Co., a manufacturing company. You have a file that
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Complete the table to determine whether Lucas has saved enough money to attend community college.
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Calculate interest using a 360-day year. If required, round your answers to the nearest cent.
Principal Interest Rate
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3,300
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A company pays its employees $5,600 every two weeks ($400/day). The current two-week pay period ends on December 26, 2024,
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- New tab x Content x Quiz 3-MAT-143, section 03F, Fax + https://www.webassign.net/web/Student/Assignment-Responses/last?dep=34832472 a A ✰ DETAILS MY NOTES ASK YOUR TEACHE A newspaper editor starts a retirement savings plan in which $225 per month is deposited at the beginning of each month into an account that earns an annual interest rate of 6.4% compounded monthly. Find the value of this investment (in dollars) after 20 years. (Round your answer to the nearest cent.) $ DETAILS MY NOTES ASK YOUR TEACHI logo design company purchases four new computers for $12,500. The company finances the cost of the computers for 3 years at an annual interest rate of 5.175% compounded monthly. Find the month ayment (in dollars) for this loan. (Round your answer to the nearest cent. See Example 8 in this section.) Submit Assignment Home My Assignments Request Extension Copyright © 1998-2024 Cengage Learning, Inc. All Rights Reserved | TERMS OF USE PRIVACY 12:03 PMarrow_forwardP7arrow_forward#5 is the questionarrow_forward
- 5:42 AM Tue Nov 16 * 100% www-awu.aleks.coma Exam 2, 7.3-9.4 REVIEW Report Overall Assignment Score: 73% (Best Score) Ninotchka V Score. O O pont Submitteu. NOV Z 7.32 1 IVI Tme Spet. S s Español Incorrect Your answer is incorrect. Salma wants to save money to open a tutoring center. She buys an annuity with a monthly payment of $27 that pays 3.7% interest, compounded monthly. Payments will be made at the end of each month. Find the total value of the annuity in 10 years. Do not round any intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the list of financial formulas. 圖 Answer Submitted: 00 $12345.92 Correct Answer: $3913.49 Assignments List EVEI IVIUIawll LLC. All Rights Reserved. Terms of Use Privacy Center Accessibility IIarrow_forwardвсе Google Chrome - D... My Learning Progre... N Northwestern Univ... Solution Manual Fo... Business Law Question 28 of 40 View Policies Show Attempt History < Current Attempt in Progress X Your answer is incorrect. 0/0.3 Your grandfather has agreed to deposit a certain amount of money each year into an account paying 7.90 percent annually to help you go to graduate school. Starting next year, and for the following four years, he plans to deposit $2,350, $8,600, $7,200, $6,600, and $12,150 into the account. How much will you have at the end of the five years? (Round answer to 2 decimal places, e.g. 15.25.) Future value at end of five years eTextbook and Media Save for Later Using multiple attempts will impact your score. 20% score reduction after attempt 2 Q Search 41719.11 GUND Attempts: 1 of 3 used Submit Answerarrow_forwardQuiz 4: Module 4- Requires Respondus L Started: Nov 16 at 6:41am Quiz Instructions Quiz 4 covers the content from Module 4. The quiz has a 45-minute timer t question at a time but you can go back and change your answers if you nee Quiz answers can be viewed for 72 hours after the final due date, Be sure to Question 17 An anecdote is a type of analogy | metaphor Sumile comparison example Previousarrow_forward
- Mc Graw Hill M Question 5 - Week 11 - Homework #7 (100 points) - Connect Week 11 - Homework #7 (100 points) 110 ezto.mheducation.com bSuccess Confirmation of Question Submission | bartleby Saved 10 5 points eBook Fighting Irish Incorporated pays its employees $3,360 every two weeks ($240/day). The current two-week pay period ends on December 28, 2024, and employees are paid $3,360. The next two-week pay period ends on January 11, 2025, and employees are paid $3,360. Required: 1. Record the adjusting entry on December 31, 2024. 2. Calculate the 2024 year-end adjusted balance of Salaries Payable (assuming the balance of Salaries Payable before adjustment in 2024 is $0). Print Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Calculate the 2024 year-end adjusted balance of Salaries Payable (assuming the balance of Salaries Payable before adjustment in 2024 is $0). Ending balance hwo to ss on macbook - Google Search Help Save & Exit…arrow_forwardccounting | Spring 2023 uiz Course Home - kar X K Chapter 9 Quiz OA. $18,200 OB. $18,800 OC. $17,500 O D. $20,300 mylab.pearson.com Question 5 of 10 X G At year-end, Snow 0 4 kara harper 04/09/23 10:36 AM This quiz: 10 point(s) possible This question: 1 point(s) possible ? Submit quiz Buddy Company uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $800. During the year Buddy wrote off uncollectible receivables of $2,100. Buddy recorded Bad Debts Expense of $2,800. Buddy's year-end balance in Allowance for Bad Debts is $1,500. Buddy's ending balance of Accounts Receivable is $20,300. Compute the net realizable value of Accounts Receivable at year-end.arrow_forward%24 %24 %24 %24 %24 eNOWv2 | Online teachin X Assignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator3D&inprogress3false Blackboard Learn US: The Texas Abort... eb California governor... USN Idaho Supreme Co... Oklahom ... Calculate interest using a 360-day year. If required, round your answers to the nearest cent. Principal Interest Rate Time Interest $2,700 9.6% 30 days 45 days 3,300 6.0% 80 days 3,800 10.5% 120 days $4 5,300 150 daysarrow_forward
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