Fundamentals of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259722615
Author: Richard A Brealey, Stewart C Myers, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 1QP
a.
Summary Introduction
To calculate: The current assets of Company C.
a.
Expert Solution
Explanation of Solution
Determine the current assets of Company C:
Hence, the total current assets is $39.7 million.
b.
Summary Introduction
To calculate: The current liabilities of Company C.
b.
Expert Solution
Explanation of Solution
Determine the current liabilities of Company C:
Hence, the total current liabilities are $20.6 million.
c.
Summary Introduction
To calculate: The net working capital of Company C.
c.
Expert Solution
Explanation of Solution
Determine the net working capital of Company C:
Hence, the net working capital is $19.1 million.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
A commercial real estate investment fund must report its quarterly investment performance to investors. A summary of its (1) beginning and end-of-quarter assets and equity and (2) cash inflows and outflows during the quarter are as follows:
Beginning of Quarter
During Quarter
$64 million
Cash
$10 million
NOI from operations
$514 million
Market value of props
$2 million
Paid management fees
$34 million
Other Investments
$25 million
Distributions to investors
$328 million
Fund debt
$214 million
Investor contributions
$189 million
Property acquisitions
$39 million
Property dispositions
The other investments will earn 4 percent interest (1 percent per quarter) and fund debt will be at a 6 percent rate (1.5 percent per quarter).
The properties were appraised at the end of the quarter for $669 million.
Assume any interest on short-term investments is offset by interest paid on short-term debt.
Required:
What would be the beginning equity value?
What would be the…
The Green Mortgage Company has originated a pool containing 75 ten-year fixed interest rate mortgages with an average balance of $103,200 each. All mortgages in the pool carry a coupon of 12 percent. (For simplicity, assume that all mortgage payments are made annually at 12 percent interest.) Green would now like to sell the pool to FNMA.
Required:
Assuming a constant annual prepayment rate of 10 percent (for simplicity, assume that prepayments are based on the pool balance at the end of each year), what would be the price that Green should obtain on the date of issuance if market interest rates were (1) 11 percent? (2) 12 percent? (3) 9 percent?
Assume that five years have passed since the date in (a). What will the pool factor be? If market interest rates are 12 percent, what price can Green obtain then?
Instead of selling the pool of mortgages in (a), Green decides to securitize the mortgages by issuing 100 pass-through securities. The coupon rate will be 11.5 percent and the…
Chewy, Inc. gas a gross profit of $500,000 and $140,000 in depreciation expense. Selling and administrative expense is $80,000. Given that the tax rate is 30 percent, compute the cash flow for the firm.
Chapter 20 Solutions
Fundamentals of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 20 - Prob. 1QPCh. 20 - Prob. 3QPCh. 20 - Prob. 4QPCh. 20 - Prob. 5QPCh. 20 - Prob. 6QPCh. 20 - Prob. 7QPCh. 20 - Prob. 8QPCh. 20 - Prob. 9QPCh. 20 - Prob. 11QPCh. 20 - Prob. 13QP
Ch. 20 - Prob. 14QPCh. 20 - Prob. 15QPCh. 20 - Prob. 16QPCh. 20 - Prob. 17QPCh. 20 - Prob. 19QPCh. 20 - Prob. 20QPCh. 20 - Prob. 21QPCh. 20 - Prob. 22QPCh. 20 - Prob. 23QPCh. 20 - Prob. 27QPCh. 20 - Prob. 28QPCh. 20 - Prob. 29QPCh. 20 - Prob. 30QPCh. 20 - Prob. 31QPCh. 20 - Prob. 32QPCh. 20 - Prob. 33QPCh. 20 - Prob. 34QPCh. 20 - Prob. 35QPCh. 20 - Prob. 36QPCh. 20 - Prob. 37QPCh. 20 - Prob. 38QPCh. 20 - Prob. 39QPCh. 20 - Prob. 40QPCh. 20 - Prob. 41QPCh. 20 - Prob. 42QPCh. 20 - Prob. 43QPCh. 20 - Prob. 44QPCh. 20 - Prob. 45QP
Knowledge Booster
Similar questions
- Dont answer i will unhelpful with incorrect values . please comment i will write values.arrow_forwardWhat is corporate finance? explain the part of finance.arrow_forwardPfizer Pharmecuticals has a $21,000 par value bond outstanding that pays 10 percent annual interest. The current yield to maturity on such bonds in the market is 13 percent. Compute the price of the bonds for the following maturity dates: a. 30 years b. 15 yearsarrow_forward
- Purina Pet Food earned $74 million last year and paid out 20 percent of earnings in dividends. a. By how much did the company's retained earnings increase? b. With 36 million shares outstanding and a stock price of $18, what was the dividend yield?arrow_forwardProfessor Brown has just retired after 25 years with Jessup University. Her total pension funds have an accumulated value of $504,000, and her life expectancy is 25 more years. Her pension fund manager assumes he can earn a 9 percent return on her assets. What will be her yearly annuity for the next 25 years?arrow_forwardCaroline Moore has a contract in which she will receive the following payments for the next four years: $10,000, $11,000, $9,000, and $8,000. She will then receive an annuity of $13,000 a year from the end of the 4th through the end of the 10th year. The appropriate discount rate is 11 percent. What is the percent value of all future payments?arrow_forward
- Nick Weber wants to have $120,000 at the end of 10 years, and his only investment outlet is an 8 percent long-term certicate of deposit (compounded annually). With the certificate of deposit, he made an initial investment at the beginning of the year year. How much does Nick need to deposit to get the $120,000 at the end of 10 years. a. What amount could Nick pay at the end of each year annually for 10 years to achieve this same objective?arrow_forwardHigh Hand Nursery has total assests of $900,000, current liabilities of $202,000, and long-term liabilities of $104,000. There is $90,000 in preferred stock outstanding. Twenty thousand shares of common stock have been issued. a. Compute book value (net worth) per share. b. If there is $40,000 in earnings available to common stockholders for dividends, and the firm's stock has a P/E of 22 times earnings per share, what is the current price of the stock? c. What is the ratio of market value per share to book value per share?arrow_forwardNeed the WACC % WACC and Optimal Capital Structure F. Pierce Products Inc. is considering changing its capital structure. F. Pierce currently has no debt and no preferred stock, but it would like to add some debt to take advantage of the tax shield. Its investment banker has indicated that the pre-tax cost of debt under various possible capital structures would be as follows: Market Debt-to-Value Ratio (wd) Market Equity-to-Value Ratio (ws) Market Debt-toEquity Ratio (D/S) Before-Tax Cost ofDebt (rd) 0.0 1.0 0.00 6.0 % 0.10 0.90 0.1111 6.4 0.20 0.80 0.2500 7.0 0.30 0.70 0.4286 8.2 0.40 0.60 0.6667 10.0 F. Pierce uses the CAPM to estimate its cost of common equity, rs, and at the time of the analaysis the risk-free rate is 5%, the market risk premium is 7%, and the company's tax rate is 25%. F. Pierce estimates that its beta now (which is "unlevered" because it currently has no debt) is 1.4. Based on this information, what…arrow_forward
- Ned's Co. has an average collection period of 45 days and an operating cycle of 130 days. It has a policy of keeping at least $10 on hand as a minimum cash balance, and has a beginning cash balance for the first quarter of $20. Beginning receivables for the quarter amount to $35. Sales for the first and second quarters are expected to be $110 and $125, respectively, while purchases amount to 80% of the next quarter's forecast sales. The accounts payable period is 90 days. What are the cash disbursements for the first quarter? Question 4 options: $92 $88 $76 $100 $110arrow_forwardLiberal credit terms for customers is associated with a restrictive short-term financial policy. Question 3 options: True Falsearrow_forwardAn accounts payable period decrease would increase the length of a firm's cash cycle. Consider each in isolation. Question 6 options: True Falsearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education