Chapter 5

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Compute the unlevered market (asset) beta for Whirlpool. Current Levered Market Beta - Unlevered Market Beta x [1+(1-Income Tax Rate) x (Current Market Value of Debt/Current Market Value of Equity)] a b Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. 1.44 3.52 Total assets Interest-bearing debt Average pretax borrowing cost Common equity. C 2.27 Book value Market value Income tax rate Market equity beta Whirlpool $13,532 $ 2,597 6.1% $ 3,006 $ 2,959 35.0% 227

9. Determining the optimal capital structure Aa Aa Understanding the optimal capital structure Review this situation: Transworld Consortium Corp. is trying to identify its optimal capital structure. Transworld Consortium Corp. has gathered the following financial information to help with the analysis. Debt Ratio Equity Ratio rd rs WACC 30% 70% 6.02% 9.40% 9.71% 40% 60% 6.75% 9.750% 9.55% 50% 50% 7.15% 10.60% 10.02% 60% 40% 7.55% 11.30% 10.78% 70% 30% 8.24% 12.80% 11.45% Which capital structure shown in the preceding table is Transworld Consortium Corp.'s optimal capital structure? Debt ratio = 70%; equity ratio = 30% Debt ratio = 40%; equity ratio = 60% Debt ratio 60%; equity ratio = 40% Debt ratio = 50%; equity ratio = 50% Debt ratio = 30%; equity ratio = 70% Consider this case: Globex Corp. currently has a capital structure consisting of 40% debt and 60% equity. However, Globex Corp.'s CFO has suggested that the firm increase its debt ratio to 50%. The current risk-free rate is 3.5%,…

21. Which of the following is a source of short-term financing? Group of answer choices Issue New Stock Issue Long Term Bonds Factoring Accounts Receivable   22 A qualitative factor (as opposed to a quantitative factor) that managment should consider when evaluating alternative capital investments would be Group of answer choices projected net cash flows The corporate strategy economic returns and IRR estimated costs

Question 4 of 16: You have worked on your balance sheet to figure out how to finance an expansion plan. Which of the following would be the most realistic plug figure to use? Select an answer: loans payable paid-in capital liabilities investments Drouioun

tor Subject Quiz - Course Hero x coursehero.com (-quiz/Finance/ Course Hero Find Browse Find study resources Ask Study Resources v Textbook Solutions Expert Tutors K Exit Test Finance Knowledge Test (10 questions) 1. Which of the following are acceptable criteria for determining the weights in the weighted average cost of capital? O Market value of the capital structure and historical costs of financing Market value of the capital structure and the target mix of debt and equity Using the after-tax cost of debt and the market value of the capital structure Using the book value of the capital structure and the prior level of debt and equity 2. When a company increases its degree of financial leverage, the equity beta of the company falls the systematic risk of the company falls the unsystematic risk of the company falls the standard deviation of returns on the equity of the company rises 3. Calculate the degree of financial leverage for a firm with EBIT of $6,000,000, fixed cost of…

13. Strategy 4 - Asset allocation Asset allocation is the proportion of your overall investment portfolio that you have invested in various categories of assets. Typical asset categories include, for example, equities (stocks or stock mutual funds), bonds (or bond funds), and cash (or cash equivalents such as Treasury bills). The following table illustrates several model portfolios that you can use as a basis for your own investment plan, depending on various factors, such as your time horizon, your risk tolerance, and your investment philosophy: Risk Tolerance/Investment Philosophy Asset Allocation and Time Horizons 0–5 Years 6–10 Years 11+ Years   10% Cash 20% Bonds 100% Equities High Risk/Aggressive 30% Bonds 80% Equities     60% Equities               20% Cash 10% Cash 20% Bonds Moderate Risk/Moderate 40% Bonds 30% Bonds 80% Equities   40% Equities 60% Equities             35% Cash 20% Cash 10% Cash Low Risk/Conservative 40% Bonds 40% Bonds…

Question 8 Capital and asset types Tier1 capital Tier 2 capital Corporate debenture Mortgage loan Loan to government ('000) 3000 1000 9000 45,000 4000 a) Calculate risk weighted asset b) Calculating the Capital Adequacy Ratio (CAR) c) Why Capital Adequacy Ratio Matters? Risk weight 90% 75% 0

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Use the table for the​ question(s) below.   Name Market Capitalization​ ($ million) Enterprise Value ​ ($ million) ​P/E ​Price/ Book Enterprise​ Value/ Sales Enterprise​ Value/ EBITDA Gannet 6350 ​10,163   7.36 0.73 1.4 5.04 New York Times 2423   3472 18.09 2.64 1.10 7.21 McClatchy   675   3061    9.76 1.68 1.40 5.64 Media General   326   1192 14.89 0.39 1.31 7.65 Lee Enterprises   267   1724    6.55 0.82 1.57 6.65 Average     11.33 1.25 1.35 6.44 Maximum     ​+60% ​112% ​+16% ​+22% Minimum     minus−​40% minus−​69% minus−​18% minus−​19%   The table above shows the stock prices and multiples for a number of firms in the newspaper publishing industry. Another newspaper publishing firm​ (not shown) had sales of $600 ​million, EBITDA of​ $84 million, excess cash of $68​million, $12 million of​ debt, and 120 million shares…

Question 10 of 25 Based on the following data, what is the amount of working capital? Accounts payable Accounts receivable Cash Intangible assets Inventory Long-term investments Long-term liabilities Short-term investments Notes payable (short-term) Property, plant, and equipment Prepaid insurance $404240 O $411680 > O $458800 $79360 141360 86800 124000 171120 198400 248000 99200 69440 1661600 2480

Solve the word problem for the portion, rate, or base. Century Mutual Fund - Investments ($ billions) Chemicals $3.1 Transportation $5.4 Financials $8.3 Manufacturing $15.9 What percent does each investment category represent? Round your answers to the nearest tenth of a percent. transportation % chemicals % financials % manufacturing %

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