Questions from Corporate Finance

Q: At an output level of 65,000 units, you calculate that

At an output level of 65,000 units, you calculate that the degree of operating leverage is 3.40. If output rises to 70,000 units, what will the percentage change in operating cash flow be? Will the ne...

Q: In the previous problem, suppose fixed costs are $130,000. What

In the previous problem, suppose fixed costs are $130,000. What is the operating cash flow at 58,000 units? The degree of operating leverage?Previous problem:At an output level of 65,000 units, you ca...

Q: A proposed project has fixed costs of $73,000 per year.

A proposed project has fixed costs of $73,000 per year. The operating cash flow at 8,000 units is $87,500. Ignoring the effect of taxes, what is the degree of operating leverage? If units sold rise fr...

Q: At an output level of 10,000 units, you have calculated

At an output level of 10,000 units, you have calculated that the degree of operating leverage is 2.35. The operating cash flow is $43,000 in this case. Ignoring the effect of taxes, what are fixed cos...

Q: A stock has a beta of 1.05, the expected return

A stock has a beta of 1.05, the expected return on the market is 11 percent, and the risk-free rate is 5.2 percent. What must the expected return on this stock be?

Q: In the previous problem, what will be the new degree

In the previous problem, what will be the new degree of operating leverage in each case?Previous problem:At an output level of 10,000 units, you have calculated that the degree of operating leverage i...

Q: Titan Mining Corporation has 9 million shares of common stock

Titan Mining Corporation has 9 million shares of common stock outstanding, 250,000 shares of 6 percent preferred stock outstanding, and 105,000 7.5 percent semiannual bonds outstanding, par value $1,0...

Q: An all-equity firm is considering the following projects:

An all-equity firm is considering the following projects:The T-bill rate is 5 percent, and the expected return on the market is 11 percent.a. Which projects have a higher expected return than the firm...

Q: Suppose your company needs $20 million to build a new

Suppose your company needs $20 million to build a new assembly line. Your target debtequity ratio is .75. The flotation cost for new equity is 8 percent, but the flotation cost for debt is only 5 perc...

Q: Southern Alliance Company needs to raise $45 million to start

Southern Alliance Company needs to raise $45 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The...