Finance problems

Please show calculations/formulas for the first problem and please check my work on the last two problems and comment: 1} O,Meara, Inc., plans to issue $6 million of perpetual bonds. The face value of each bond is $1,000 The semi-annual coupon on the bonds is 4.5% Market interest rates on one-year bonds are 8% With equal probability, the long-term market interest rate will be either 12% or 16% next year. Assume investors are risk-neutral. a. If the O'Meara bonds are noncallable,what is the price of the bonds? b. If the bonds are callable one year from today at $1,250, will their price be greater than or less than the price you computed in (a)? Why? ... click for more

Fixed Costs to be Considered for a Contribution Income Statement

This is an accounting problem: Im trying to compile a contribution margin statement and I am having problems deciphering what I should include for fixed costs. Can anyone help me? Here are the Activities: Start-up costs Research & Development Raw Materials for manufacturing Salaries to selling and office employees Wages to production workers office furniture and equipment Manufacturing equipment Rent on manufacturing facility Utilities on manufacturing facility Rent on office building utility cost on office building advertising costs Which of these activities should I include in fixed costs when compiling a contribution margin statement? This is a manufacturing and de... click for more

Problem Set

Lily Cosmetics has annual sales of $500,000,000 maintains a net after tax profit margin of 5% and has a sales-to-assets ratio of 4 a. What is its return on assets? b. If its debt/equity ratio is 0.5 what is the return on equity? Week 3 - Problem 2 On average, Microlimp's accounts receivables total $40,000,000 on sales of $400 million What is Microlimp's average collection period? Week 3 - Problem 3 How would the following actions affect a firm's current ratio? a. Inventory is purchased and paid for with cash, it is not purchased on acco... click for more

CAPM

1. You are given the following information on two securities, the market portfolio, and the risk free rate: (See attached file for full problem description with chart) For parts a, b, and c, use the above Table. a. Draw the Security Market Line. b. What are the betas of the two securities? c. Plot the two securities on the Security Market Line. d. Now assume that the two securities 1 and 2 constitute the market portfolio. Their proportion in it and variances are 0.39, 160, and 0.61, 340 respectively. The covariance of the two securities is 190. Calculate the betas of the two securities. e. Why should the expected return for a security be directly related to the security's covari... click for more

Organizational Structure

You realize there's a link between market stratetgy and organizational structure...so it's time to do more research! Look at three very different global companies. Determine their organizational structure and what market entry strategies each of these companies are currently using. Consider why each company designed its organizational structure to be what it is and why they have chosen to expand internationally in the manner that they have. Is each company's organizational structure and international market expansion plans what you expected them to be?