Green Manufacturing, Inc., plans to announce that it will issue $2 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 6%. Green is currently an all-equity firm worth $6.3 million with 400,000 shares of common stock outstanding. After the sale of the bonds, Green will maintain the new capital structure indefinitely. Green currently generates annual pretax earnings of $1.5 million. This level of earnings is expected to remain constant in perpetuity. Green is subject to a corporate tax rate of 40%.
A) What is the expected return on Green?s equity before the announcement of the debt issue?
B) Construct Green's market value balance sheet before the announcement of the debt issue. What is the price per share of the firm's equity?
C) Construct Green's market value balance sheet immediately after the announcement of the debt issue. What is Green's stock price per share immediately after the repurchase announcement?
D) How many shares will Green purchase as a result of the debt issue? How many shares of common stock will remain after the repurchase?
E) Construct a market value balance sheet after the restructuring. What is the required return on Green's equity after the restructuring?

Answer: See explanation and attachment

Explanation:

a. Return on equity:

= Pre tax earnings × (1 - Tax rate) / Total equity

= 1.5 million × (1 - 40%) / 6.3 million

= 1.5 million × (1 - 0.4) / 6.3 million

= (1.5 million × 0.6) / 6.3 million

= 0.9 million / 6.3 million

= 14.29%

b. Check attachment for Green's market value balance sheet before the announcement of the debt issue.

The price per share of the firm's equity will be:

= Equity / Number of shares

= $6300000 / 400000

= $15.75 per share

c. Check Green's market value balance sheet immediately after the announcement of the debt issue.

Green's stock price per share immediately after the repurchase announcement will be calculated thus:

We need to know the value of tax shield which will be:

= 40% × $2,000,000

= $800,000

Value of firm = $6,300,000 + $800,000

= $7,100,000

Price per share will be:

= Equity / Number of shares

= 7100000 / 400000

= $17.75 per share

d. The number of shares that Green will purchase as a result of the debt issue will be:

= Debt issue / Price per share

= 2,000,000 / 17.57

= 112,676

The number of shares of common stock that will remain after the repurchase will be:

= 400000 - 112676

= 287324

e. Check attachment for market value balance sheet after the restructuring.

The required return on Green's equity after the restructuring will be:

= 14.29% + (2000000/5100000) × (14.29% - 6%) × (1 - 40%)

= 14.29% + 0.3921 × 8.29% × 0.6

= 14.29% + 1.95%

= 16.24%

The Smith family wants to relocate to a neighborhood with better schools before their three-year-old goes to kindergarten. They talked with Byron about properties he has for sale in neighborhoods they would like to live in. They also mentioned to Byron that they both work and may need someone to help with in-home care for their child. Byron gave them Taylor’s name to call about childcare. The Smiths also said they were having a hard time getting loan approval, so Byron suggested that they call Travis. Which best describes the jobs performed by Byron, Taylor, and Travis?

a) Byron is a Customer Service Representative, Taylor is a Child Care Worker, and Travis is a Loan Counselor.

b) Byron is a Real Estate Manager, Taylor is a Nanny, and Travis is a Loan Counselor.

c) Byron is a Real Estate Manager, Taylor is a Preschool Teacher, and Travis is a Customer Service Representative.

d) Byron is a Home Counselor, Taylor is a Nanny, and Travis is a Property Manager.

Saul is a manager at Holden Apparels Inc. and is friends with the company's CEO. This privilege gives Saul the information that Holden Apparels is in the midst of talks to take over a leading rival. Saul buys stocks of Holden with the expectation that its stocks will appreciate. But the deal falls through and the stocks of Holden depreciate in the following months. Are Saul's actions unethical

Oering's Furniture Corporation is a Virginia-based manufacturer of furniture. In a recent year, it reported the following activities:

Net income $5,135
Purchase of property, plant, and equipment 1,071
Borrowings under line of credit (bank) 1,117
Proceeds from issuance of stock 11
Cash received from customers 37,164
Payments to reduce long-term debt 46
Sale of marketable securities 219
Proceeds from sale of property and equipment 6,894
Dividends paid 277
Interest paid 90
Purchase of treasury stock (stock repurchase) 2,583

Required:
Based on this information, present the cash flows from investing and financing activities sections of the cash flow statement. (List cash outflows as negative amounts.)

The following selected transactions relate to liabilities of Rocky Mountain Adventures. Rocky Mountain's fiscal year ends on December 31.
January 13: Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the bank's prime rate.
February 1: Arrange a three-month bank loan of $4.3 million with First Bank under the line of credit agreement. Interest at the prime rate of
7% is payable at maturity.
May 1: Pay the 7% note at maturity.
Record the appropriate entries, if any, on January 13, February 1, and May 1.

if the market price of common stock increases substantially, bondholders with convertible bonds benefit. convertible bonds can be converted into common stock at the option of the issuing company. bondholders with convertible bonds receive interest on the bonds until conversion. convertible bonds sell at a higher price and pay a lower rate of interest than those without the conversion option.

Write a paragraph about Bad customer service

Mackenzie Company has a price of $38 and will issue a dividend of $ 2.00 next year. It has a beta of 1.3, the risk-free rate is 5.2%, and the market risk premium is estimated to be 4.9%. a. Estimate the equity cost of capital for Mackenzie. b. Under the CGDM, at what rate do you need to expect Mackenzie's dividends to grow to get the same equity cost of capital as in part (a)?

Orange Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment $ 520,000 Annual net cash flows $ 78,000 Life of the equipment 10 years Salvage value $ 0 Discount rate 6 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: Multiple Choice 1.0 years 0.2 years 4.7 years 6.7 years

Santa Corporation issued a bond on January 1 of this year with a face value of $1,000. The bond's coupon rate is 6 percent and interest is paid once a year on December 31. The bond matures in three years. The annual market rate of interest was 8 percent at the time the bond was sold. The following amortization schedule pertains to the bond issued: Cash Paid Interest Expense Amortization Balance January 1, Year 1 $948 December 31, Year 1 $60 $76 $16 964 December 31, Year 2 60 77 17 981 December 31, Year 3 60 79 19 1,000 Required: 1. What was the bond's issue price

Danner Company expects to have a cash balance of $52,965 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows. Collections from customers: January $100,045, February $176,550. Payments for direct materials: January $58,850, February $88,275. Direct labor: January $35,310, February $52,965. Wages are paid in the month they are incurred. Manufacturing overhead: January $24,717, February $29,425. These costs include depreciation of $1,765 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $17,655, February $23,540. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $14,124 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $29,425. The company wants to maintain a minimum monthly cash balance of $23,540.
Prepare a cash budget for January and February.

The Wiz Co. owes $60 to its bondholders for the payment of principal and interest. The company expects to have a cash flow of $136 if the economy continues as it is but that cash flow will decrease to $54 if the economy enters a recession. Should the company ever face the real possibility of bankruptcy, it will incur legal and other fees of $30. What amount will the bondholders be paid in the case of a recession

Which of the following is the second step in the hiring process?

Select the best answer choice.
A.
the submission of the application or resume

B.
the interview

C.
sending a thank-you note

D.
getting hired for the position

Hoda is creating a report in Access using the Report Wizard. Which option is not available for adding fields using the wizard?

Tables
Queries
Reports
All are available options.

Calculate amortization expense
In early January, Burger Mania acquired 100% of the common stock of the Crispy Taco restaurant chain. The purchase price allocation included the following items: $4 million, patent; $5 million, trademark considered to have an indefinite useful life; and $6 million, goodwill. Burger Mania's policy is to amortize intangible assets with finite useful lives using the straight-line method, no residual value, and a five-year service life.
What is the total amount of amortization expense that would appear in Burger Mania's income statement for the first year ended December 31 related to these items? (Enter your answers in dollars, not in millions.

Before negotiating a long-term construction contract, build- ing contractors must carefully estimate the total cost of completing the project. Benzion Barlev of New York University proposed a model for total cost of a long-term contract based on the normal distribution(Journal of Business Finance and Accounting, July 1995). For one particular construction contract, Barlev assumed total cost, x, to be normally distributed with mean $850,000 and standard deviation $170,000. The revenue, R, promised to the contractor is $1,00,000.

Required:
a. The contract will be profitable if revenue exceeds total cost. What is the probability that the co ntract will be profitable for the contractor?
b. What is the probability that the project will result in a loss for the contractor?
c. Suppose the contractor has the opportunity to renegotiate the contract. What value of R should the contractor strive for in order to have a .99 probability of making a profit?

In divisional income statements prepared for Lemons Company, the Payroll Department costs are allocated to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are allocated on the basis of the number of purchase requisitions. The Payroll Department had costs of $62,928, and the Purchasing Department had expenses of $29,480 The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:

Residential Commercial Government Contract
Sales $2,000,000 $3,250,000 $2,900,000

Weekly payroll (52 weeks per year) 400 250 150
Monthly payroll 80 30 10
Number of purchase requisitions per year 7,500 3,000 2,000

Required:
a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
b. Using the activity base information in (a), determine the annual amount of payroll and purchasing costs charged back to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services.
c. Residential's service department charge is _______ than the other two divisions because Residential is a user of service department services. Residential has many employees on a weekly payroll, which translates into a ________ number of payroll transactions.

You do not start saving money until age 46. On your 46th birthday you dutifully invest​ $10,000 each year until you finish your deposits when you reach the age of 65​ (you make the last deposit on your 65th​ birthday). The annual interest rate is 8​% that you earn on your deposits. Your brother starts saving​ $10,000 a year on his 36th birthday but stops making deposits after 10 years. He then withdraws the compounded sum when he reaches age 65. How much more money will your brother have than you at age​ 65?

Net present value LO P3
A new operating system for an existing machine is expected to cost $820,000 and have a useful life of six years. The system yields an incremental after-tax income of $240,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $100,000.
A machine costs $560,000, has a $56,000 salvage value, is expected to last eight years, and will generate an after-tax income of $150,000 per year after straight-line depreciation.
Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
a. A new operating system for an existing machine is expected to cost $820,000 and have a useful life of six years. The system yields an incremental after-tax income of $240,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $100,000. (Round your answers to the nearest whole dollar.)
b. A machine costs $560,000, has a $56,000 salvage value, is expected to last eight years, and will generate an after-tax income of $150,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.)

Match the title of the employment-related law to its description. Each label is used only once.

a. This law protects the workers from physical dangers while performing their jobs.
b. This law states that pensions need to be funded properly and directs that employees be kept informed about their pensions.
c. This law placed limits on child labor and set a minimum wage in the United States.
d. This law gives workers the right to take up to 12 weeks of unpaid leave per year for family reasons.

1. Pension Protection Act of 2006
2. Family and Medical Leave Act of 1993
3. Occupational Health and Safety Act of 1970
4. Fair Labor Standards Act of 1938

The statement of cash flows (as well as the balance sheet) includes within cash the notion of cash equivalents. The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. Required: 1. Obtain the relevant authoritative literature on cash equivalents using the FASB Accounting Standards Codification at the FASB website (www.fasb.org). What is the specific seven-digit Codification citation (XXX-XX-XX) that describes the guidelines for determining what items should be deemed cash equivalents

Ganon Co. applies overhead based on direct labor hours. They have an applied overhead of $48,000 and actual overhead of $66,500 for the month of March. In March, the total number of direct labor hours was 1,200 and the total number of machine hours was 5,910. Overhead for the year was estimated to be $690,000. How many direct labor hours were estimated for the year

On January 8, 2012, Speedway Delivery Service purchased a truck at a cost of $65,000. Before placing the truck in service, Speedway spent $4,000 painting it, $2,500 replacing tires, and $8,000 overhauling the engine. The truck should remain in service for five years and have a residual value of $6,000. The truck’s annual mileage is expected to be 22,000 miles in each of the first four years and 12,000 miles in the fifth year—100,000 miles in total. In deciding which depreciation method to use, David Greer, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance).
Requirements
1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value.
2. Speedway prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. For income tax purposes, the company uses the depreciation method that minimizes income taxes in the early years. Consider the first year that Speedway uses the truck. Identify the depreciation methods that meet the general manager’s objectives, assuming the income tax authorities permit the use of any of the methods.

You are the manager for a Pizza restaurant. Currently, your restaurant pre-makes pizzas that are ordered the most to increase the number of pizzas being made on time for your customers. Over time, many customers have complained that their pizzas were cold upon delivery and not fresh, requesting refunds or remakes of their pizza. Your location is losing money from these wasteful practices, therefore, you want to create a Kanban based on the following basic principles:

1. A later process tells an earlier process when new items are required. This means that unless a customer orders a pizza, no pizzas will be made. Pull!
2. The earlier process produces what the later process needs.
3. No Items can be made without a Kanban card (order request). This allows the process to be transparent so everyone knows what is going on.
4. Defects are not passed on to the next stage.Create a Kanban board for your pizza company that delivers. You must have 4-6 columns with headings for each.

Required:
Decide what your Kanban cards will represent. Set Rules for your Kanban.

You are Heidi Ganahl, CEO and Founder of Camp Bow Wow, and you are intending to expand the brand to new global locations. If you are expanding into a country that values humane-oriented leadership, which of the following behaviors is most in line with that perspective?
a. You implement weekly team building session to create a collaborative work environment.
b. You involve all employees in all decisions, ensuring that everyone participates in the decision making process.
c. You articulate a dear vision for changing the organization so that it will focus on consistently delivering high levels of performance.
d. You provide compassionate support when an employee is having difficulty with family issues.

Modigliani and​ Miller's world of no taxes. Roxy​ Broadcasting, Inc. is currently a​ low-levered firm with a​ debt-to-equity ratio of ​/. The company wants to increase its leverage to ​/ for debt to equity. If the current return on assets is ​% and the cost of debt is ​%, what are the current and the new costs of equity if Roxy operates in a world of no​ taxes? What is the current cost of equity if Roxy operates in a world of no​ taxes?

Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2022 (in millions): other plant assets $935.0, land $220.0, patents and trademarks (at cost) $510.0, machinery and equipment $2,160.0, buildings $980.0, goodwill (at cost) $210.0, accumulated amortization $50.0, and accumulated depreciation $2,200. Prepare a partial balance sheet for Nike for these items.

Coronado Industries had 293000 shares of common stock issued and outstanding at December 31, 2020. No common stock was issued during 2021. On January 1, 2021, Coronado issued 200000 shares of nonconvertible preferred stock. During 2021, Coronado declared and paid $110000 cash dividends on the common stock and $79000 on the preferred stock. Net income for the year ended December 31, 2021 was $618000. What should be Coronado's 2021 earnings per common share

Chesapeake Inc. acquired a registered trademark for $600,000. The trademark has a remaining legal life of 5 years but can be renewed every 10 years for a nominal fee. Chesapeake does not expect to renew the acquired trademark when the legal life is over. What amount of amortization expense should Chesapeake record for the trademark in the current year?
a. $0
b. $15,000
c. $40,000
d. $120,000

Last year, Valley Manufacturing reported sales of $800,000, net operating income of $40,000, and average operating assets of $400,000. The company is considering the purchase of equipment that will reduce expenses by $20,000. The equipment will increase average operating assets by $100,000 and be purchased by issuing a notes payable. Sales will remain unchanged. If Valley accepts the project, its return on investment (ROI) after the purchase is projected to

can anyone share important questions on Managerial Information Systems??
i need it for preparing
for my exams​