Questions from Corporate Finance

Q: Norton Company has a debt-to-equity ratio of 1

Norton Company has a debt-to-equity ratio of 1.65, ROA of 11.3 percent, and total equity of $1,322,796. What are the company’s equity multiplier, debt ratio, and ROE?

Q: Hindenberg, Inc., has a 10-year bond that is

Hindenberg, Inc., has a 10-year bond that is priced at $1,100.00. It has a coupon of 8 percent paid semiannually. What is the yield to maturity on this bond?

Q: The Rangoon Timber Company has the following ratios: Net sales

The Rangoon Timber Company has the following ratios: Net sales/Total assets = 2.23; …………………. ROA = 9.69%; …………………. ROE = 16.4% What are Rangoon’s profit margin and debt ratios?

Q: Lemmon Enterprises has a total asset turnover of 2.1 and

Lemmon Enterprises has a total asset turnover of 2.1 and a net profit margin of 7.5%. If its equity multiplier is 1.90, what is the ROE for Lemmon Enterprises?

Q: Chuck Tomkovick is planning to invest $25,000 today in

Chuck Tomkovick is planning to invest $25,000 today in a mutual fund that will provide a return of 8 percent each year. What will be the value of the investment in 10 years?

Q: Maria Addai has been offered a future payment of $750 two

Maria Addai has been offered a future payment of $750 two years from now. If she can earn an annual rate of 6.5 percent, compounded daily, on her investment, what should she pay for this investment to...

Q: Your brother has asked you for a loan and has promised to

Your brother has asked you for a loan and has promised to pay you $7,750 at the end of three years. If you normally invest to earn 6 percent per year, how much will you be willing to lend to your brot...

Q: Tracy Chapman is saving to buy a house in five years.

Tracy Chapman is saving to buy a house in five years. She plans to put 20 percent down at that time, and she believes that she will need $35,000 for the down payment. If Tracy can invest in a fund tha...

Q: You want to buy some bonds that will have a value of

You want to buy some bonds that will have a value of $1,000 at the end of seven years. The bonds pay 4.5 percent interest annually. How much should you pay for them today?

Q: Elizabeth Sweeney wants to accumulate $12,000 by the end

Elizabeth Sweeney wants to accumulate $12,000 by the end of 12 years. If the annual interest rate is 7 percent and interest compounds semiannually, how much will she have to invest today to achieve he...