Please help? Frugala is pleased when Sylvestor puts
$2,000 into 10-year state bonds and $3,000
into 5-year AAA-rated bonds in Steady
Hand Hardware, Inc. He buys the four
state bonds at a 5 percent interest rate
and the three Steady Hand bonds at a
6.5 percent rate. Sylvestor also buys $1,500
worth of blue chip stocks, and $800 worth
of stock in a promising new sportswear
company that reinvests its earnings in
new growth.
1. (a) What is the maturity for each of the
bond groups Sylvestor buys?
(b) The coupon rate?
(c) The par value?
2. (a) Which of Sylvestor’s stocks are
traded over the counter?
(b) on the NYSE?
3. (a) Which of Sylvestor’s new
investments are municipal bonds?
(b) Corporate bonds?
4. For which bond purchase did Frugala
probably consult Standard & Poor’s or
Moody’s?
5. From which stock may Sylvestor expect
capital gains rather than dividends?

What is the most important factor that affects the value of a company? a) cash flow b) earnings c) supply and demand d) number of employees

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

R& m chatelaine is one of the largest tax-preparation firms in the united states. it wants to acquire the tax experts, a smaller rival. after the merger, chatelaine will be one of the two largest income-tax preparers in the u.s. market. what should chatelaine include in its acquisition plans? it should refocus its attention from the national to the international market. in addition to acquiring the tax experts, it should also determine the best way to drive independent "mom and pop" tax preparers out of business. chatelaine will need to explain to the federal trade commission how the acquisition will not result in an increase in prices for consumers. chatelaine should enter a price-based competition with its other major competitor to force it out of business and become a monopoly.