Monthly Archives: November 2017

What should be the prices of the following preferred stock

What should be the prices of the following preferred stock if comparable securities yield 7 percent ? Why are the valuations different ? a. MN Inc., $8 preferred($100 Par) b. CH Inc., $8 Preferred($100 Par) with mandatory retirement after 20 … Continue reading

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Desmond Corp. purchased 5, $1,000, 5​% bonds of Geotherm Corporation

Desmond Corp. purchased 5, $1,000, 5​% bonds of Geotherm Corporation when the market rate of interest was 14​%. Interest is paid semiannually on the​ bonds, and the bonds will mature in four years. Using the PV function in Excel Superscript … Continue reading

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Sauer Milk Inc. wants to determine the minimum cost of capital point

Sauer Milk Inc. wants to determine the minimum cost of capital point for the firm. Assume it is considering the following financial plans:  Cost (aftertax)Weights  Plan A        Debt 6.0% 25%  Preferred stock 12.0  15   Common equity 16.0  60   Plan B        Debt 6.6% 35%  Preferred stock 12.6  15   Common equity 17.0  50   Plan C        Debt 7.0% 45%  Preferred stock 19.7  15   Common equity 15.5  40   Plan D        Debt 17.0% 55%  Preferred stock 20.4  15   Common equity 17.6  30 a-1. Compute the … Continue reading

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Reynolds Construction (RC) needs a piece of equipment that costs $200

Reynolds Construction (RC) needs a piece of equipment that costs $200. RC can either lease the equipment or borrow $200 from a local bank and buy the equipment. If the equipment is leased, the lease would not have to be … Continue reading

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Noah Gnus is the owner of a newspaper stand in Ottawa

Noah Gnus is the owner of a newspaper stand in Ottawa. He wants to obtain information on the number of copies of the Ottawa Citizen sold each weekday. A random sample 10 weekdays yielded the following data: 135 274 209 … Continue reading

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Current data provided by the 2010 census indicates that the prevalence

Current data provided by the 2010 census indicates that the prevalence of breast cancer in the US is still on the rise, while the mortality rates have slightly declined over time. A researcher at a local health department conducts an … Continue reading

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A study is done to determine if students in the California state university

A study is done to determine if students in the California state university system take longer to graduate, on average, than students enrolled in private universities. One hundred students from both the California state university system and private universities are … Continue reading

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Based on a random sample of 1120 ​adults, the mean amount of sleep

1. Based on a random sample of 1120 ​adults, the mean amount of sleep per night is 7.67 hours. Assuming the population standard deviation for amount of sleep per night is 3.2 ​hours, construct and interpret a 90​% confidence interval … Continue reading

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A newspaper reported on the results of an opinion poll in which adults

1. A newspaper reported on the results of an opinion poll in which adults were asked what one thing they are most likely to do when they are home sick with a cold or the flu. In the​ survey, 65​% … Continue reading

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A random sample of 93 observations produced a mean

1. A random sample of 93 observations produced a mean x=25.5 and a standard deviation sequals=2.4. a. Find a​ 95% confidence interval for μ. b. Find a​ 90% confidence interval for μ. c. Find a​ 99% confidence interval for μ. … Continue reading

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