INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
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Chapter 13, Problem 4PS
Summary Introduction
To calculate: The hypothesis is to be identified for a test of the second pass regression for the SML.
Introduction: The security market line (SML) is a line drawn on an outline that fills in as a graphical portrayal of the
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Per the chart for 2019 below I am looking for the line of credit (LOC) at the bottom for 2019?
Stevens Textile Corporation's 2019 financial statements are shown below
Balance Sheet as of December 31, 2019 (Thousands of Dollars)
Cash
$ 1,080
Accounts payable
$ 4,320
Receivables
6,480
Accruals
2,880
Inventories
9,000
Line of credit
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Total current assets
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Notes payable
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Net fixed assets
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3,500
Common stock
3,500
Retained earnings
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$29,160
Total liabilities and equity
$29,160
Income Statement for December 31, 2019 (Thousands of Dollars)
Sales
$36,000
Operating costs
34,000
Earnings before interest and taxes
$ 2,000
Interest
160
Pre-tax earnings
$ 1,840
Taxes (25%)
460
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$ 1,380
Dividends (40%)
$ 552
Addition to retained earnings
$ 828
Stevens grew rapidly in 2019 and financed the growth with notes…
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Use an appropriate Excel function. You saved $800,000 for your retirement. Suppose you earn 3.5% annually on your savings; how much money will your savings pay you each month over 20 years? Assume you receive your first month's payment a month from today.
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- Calculate what $700 would grow to at 6%6% per year compounded daily for 7 years. (Use the Table 12.2.) Note: Round your final answer to the nearest cent.arrow_forwardI am not getting the correct Line of Credit for this question (LOC)? Please assist. Financing Deficit Stevens Textile Corporation's 2019 financial statements are shown below: Just need the correct LOC? Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0 Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600 Total current liabilities $ 9,300 Mortgage bonds 3,500 Common stock 3,500 Retained earnings 12,860 Total assets $29,160 Total liabilities and equity $29,160 Income Statement for December 31, 2019 (Thousands of Dollars) Sales $36,000 Operating costs 34,000 Earnings before interest and taxes $ 2,000 Interest 160 Pre-tax earnings $ 1,840 Taxes (25%) 460 Net income $ 1,380 Dividends (40%) $ 552 Addition to retained earnings $ 828 Stevens grew rapidly in 2019 and…arrow_forward[The following information applies to the questions displayed below.] The Albertville City Council decided to pool the investments of its General Fund with Albertville Schools and Richwood Township in an investment pool to be managed by the city. Each of the pool participants had reported its investments at fair value as of the end of 2022. At the date of the creation of the pool, February 15, 2023, the fair value of the investments of each pool participant was as follows: Investments 12/31/22 2/15/23 City of Albertville General Fund $ 897,000 $ 935,000 Albertville Schools 4,214,000 4,394,500 Richwood Township 4,030,000 4,020,500 Total $ 9,141,000 $ 9,350,000 On June 15, Richwood Township decided to withdraw $3,080,000 for a capital projects payment. At the date of the withdrawal, the fair value of the Treasury notes had increased by $37,000. Assume that the trust fund was able to redeem the CDs necessary to complete…arrow_forward
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- Smiley Corporation's current sales and partial balance sheet are shown below. This year Sales $ 10,000 Balance Sheet: Liabilities Accounts payable $ 2,000 Notes payable $ 2,000 Accruals $ 1,400 Total current liabilities $ 5,400 Long-term bonds $ 2,000 Total liabilities $ 7,400 Common stock $ 1,000 Retained earnings $ 2,500 Total common equity $ 3,500 Total liabilities & equity $ 10,900 Sales are expected to grow by 8% next year. Assuming no change in operations from this year to next year, what are the projected spontaneous liabilities? Do not round intermediate calculations. Round your answer to the nearest dollar.arrow_forwardDiscuss in detail the similarities and differences between Preferred Stock and Common Stock. As an investor, which would you rather invest in if you goal is long term wealth maximization?arrow_forwardAnswer itarrow_forward
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