Criminal justice issues Annotated Bibliography Example | Topics and Well Written Essays - 1000 words

Criminal equity issues - Annotated Bibliography Example Criminologists accept this is a solid indicator of criminal results in youth. Early instructive encounters, the negative naming impact by instructors and friends in school, has been sited as having direct associations with later criminal conduct. A few examinations have distinguished a friend impact on misconduct, where the companion bunch impacts singular cooperation in reprobate conduct, which impacts the later beginning of wrongdoing. While doing inadequately in school may introduce different components, surely the response from educators and peers and the debilitation or consolation by people with great influence directly affects the manner in which the understudy understands oneself. This has been found to have current cultural as well as sweeping life outcomes too. Then again, positive marking at an early age and proceeded with positive help by friends and guardians and other power figures has a gigantic impact in the further avoidance of brutality and other criminally related conduct. . Compactly put, marking hypothesis takes a gander at varying naming sources and explicit connections after some time and makes an endeavor to anticipate the beginning of freak conduct in adolescents. Adolescents are routinely barraged with various prompts and signals regarding how they are being seen by others. Through the demonstration of job taking and other characterizing circumstances Adams, Robertson, Gray-Ray and Ray accept that adolescents can â€Å"accurately decipher the implications of images and signals used to extend names upon them† (2003, p. 172). This permits a projection of self into the job of a position figure or critical other and permits the young to make a self-evaluation or appraisal through the eyes of another. The very basic reaction, â€Å"I wonder their thought process me,† is a natural hold back to every one of us. In some sense the self at that point turns into an item

Mending Wall Poetry Analysis Essay

The neighbor continues turning to a similar straightforward contention and purpose of his father’s saying, â€Å"Good wall make great neighbors. † The speaker keeps on staying unconvinced and presses the neighbour’s antiquated difficult professes to be disregarded regardless of his hesitance to be influenced. The piece amazingly is very shortsighted in the manner that the jargon of the sonnet contains no genuine extravagant words, most are short and the larger part can be utilized in transformation in regular day to day existence. There are no refrain breaks, evident completion rhymes or generally speaking rhyme conspire watched either. The redundancy of entire lines is reviewed twice all through the sonnet in any case. â€Å"Something there is that doesn’t love a wall,† is the initial line of the piece and is rehashed on line thirty-six. This is a reoccurring thought that this divider ought not be up remaining in any case as it is superfluous. Ice says that there is a characteristic power that tears down these dividers as they are unnatural. The reiteration accentuates that it just isolates us from having the option to manufacture last yearning connections from the individuals who might be on the contrary side to that fence. The other replication saw is of the aphorism of the neighbour’s father, â€Å"Good wall make great neighbors. † This expression holds a solid significance to the speaker’s neighbor. By no means, does the man over the divider need to change his durable manufactured custom of his father’s trusty and shrewd knowledge. Ice would prefer the neighbor have an independent mind and for him to get a handle on the chance to accomplish something else instead of keep on â€Å"move in darkness† and let go of the unneeded boundary between that lies between them. One translation is that Frost could be attempting to pass on is one of superfluous hindrances and impasses. Reasons not to change their lives, not to frame new companionships or create and assemble significantly more grounded ones. The title Mending Wall could mean anything besides fixing the fence between the two squares of land yet allude rather to the wrecked relationship that exists between two individuals.

Easy Topics For Essay Writing

Easy Topics For Essay WritingThe easiest ways to write an essay are easier than you might think and some of them are very simple. You should keep in mind that while easy topics for essay writing can be found, they won't necessarily be what you're looking for.If you want to write an essay on a subject that is outside of your field of expertise then there are plenty of different topics for you to choose from. You'll find that some of the easiest topics for essay writing involve topics that other people are already writing about. However, you should always keep in mind that people's own unique experiences are a lot more interesting and help you get a better idea of the real world that you are dealing with.One of the easiest easy topics for essay writing is a theme. A theme is a story that you use to guide your thoughts through your paper. You might have a general idea of the plot of the story and just need to know how to structure it. Or you might need to have more direction but aren't quite sure how to go about it.You can choose a topic based on your own needs and abilities. Once you start thinking about the theme of your paper, you'll find that it's easy to know exactly where to start writing. You'll also find that you don't need to do much research to make sure that you know everything that you need to know. All you really need to do is narrow down your ideas and build on them as you see fit.There are three types of themes that you can use to help with your paper. These are sub-themes, sub-character and main theme. Each one of these has a specific order for them. Sub-themes are centered around something related to the character you're writing about, while sub-characters have a connection to them. Main themes usually center around the main characters of the story.You can choose any one of these themes to help you tell the story you're working on. If you have a love story that involves two characters you can choose a sub-theme to help your story flow. Likewise, i f you have a topic that deals with the conflict between two people then you can use a sub-theme to explain that conflict and make it seem more logical.When you choose to write about your experiences, you can use either of these topics or just keep it as a sub-character if you'd like. You can use sub-character themes when you want to look at other things besides your experiences. For example, if you had to train to become a chef then you can look at the story of how you were trained to become a chef and what type of a chef you are.Easy topics for essay writing are always in abundance because so many people are very particular about their opinions. This is why it's so important to be creative and utilize the ideas you have to make sure that your paper doesn't fall flat.

Fiscal Policy in the 1960s and 1970s

By the 1960s, policy-makers seemed wedded to Keynesian theories. But in retrospect, most Americans agree, the government then made a series of mistakes in the economic policy arena that eventually led to a reexamination of fiscal policy. After enacting a tax cut in 1964 to stimulate economic growth and reduce unemployment, President Lyndon B. Johnson (1963-1969) and Congress launched a series of expensive domestic spending programs designed to alleviate poverty. Johnson also increased military spending to pay for American involvement in the Vietnam War. These large government programs, combined with strong consumer spending, pushed the demand for goods and services beyond what the economy could produce. Wages and prices started rising. Soon, rising wages and prices fed each other in an ever-rising cycle. Such an overall increase in prices is known as inflation. Keynes had argued that during such periods of excess demand, the government should reduce spending or raise taxes to avert inflation. But anti-inflation fiscal policies are difficult to sell politically, and the government resisted shifting to them. Then, in the early 1970s, the nation was hit by a sharp rise in the international oil and food prices. This posed an acute dilemma for policy-makers. The conventional anti-inflation strategy would be to restrain demand by cutting federal spending or raising taxes. But this would have drained income from an economy already suffering from higher oil prices. The result would have been a sharp rise in unemployment. If policy-makers chose to counter the loss of income caused by rising oil prices, however, they would have had to increase spending or cut taxes. Since neither policy could increase the supply of oil or food, however, boosting demand without changing supply would merely mean higher prices. The President Carter Era President Jimmy Carter (1976 - 1980) sought to resolve the dilemma with a two-pronged strategy. He geared fiscal policy toward fighting unemployment, allowing the federal deficit to swell and establishing countercyclical jobs programs for the unemployed. To fight inflation, he established a program of voluntary wage and price controls. Neither element of this strategy worked well. By the end of the 1970s, the nation suffered both high unemployment and high inflation. While many Americans saw this stagflation as evidence that Keynesian economics did not work, another factor further reduced the governments ability to use fiscal policy to manage the economy. Deficits now seemed to be a permanent part of the fiscal scene. Deficits had emerged as a concern during the stagnant 1970s. Then, in the 1980s, they grew further as President Ronald Reagan (1981-1989) pursued a program of tax cuts and increased military spending. By 1986, the deficit had swelled to $221,000 million, or more than 22 percent of total federal spending. Now, even if the government wanted to pursue spending or tax policies to bolster demand, the deficit made such a strategy unthinkable. Note This article is adapted from the book Outline of the U.S. Economy by Conte and Carr and has been adapted with permission from the U.S. Department of State.

World War 2 - 910 Words

2/15/12 DBQ: World War II The Road to War During the early 1920 s many people thought that peace had finally been reached. However, in the late 1920 s and throughout the 1930 s, they realized that they were wrong. Dictators came into power in countries that were displeased with the results of World War I. Germany, Italy and Japan wanted power, so they took aggressive action that not even The League of Nations could stop. British Prime Minister Chamberlain thought that the best way to deal with Hitler was by following a policy of appeasement, but not everybody agreed with him. That is why the causes of World War II vary depending on different perspectives. Many countries became involved in World War II in 1939 because†¦show more content†¦(Document 8) William Shirer stated that the Munich Agreement allowed Hitler to take the Sudetenland from Czechoslovakia (Document 4). Even though the Europeans were happy not to have to go to war, Shirer felt that this was only a temporary solution, and that War would be avoided for only a short time (Document 4). When World War I ended, Germany had signed a treaty known as the Treaty of Versailles which provided large fines that Germany had to pay and certain restrictions that Germany had to follow. Hitler defied the terms of the Treaty by sending his troops into the Rhineland, which was a demilitarized zone (Document 3). According to Hitler, since the Rhineland was once part of Germany, it should be again (Document 3). France disagreed with Hitler and would only negotiate with him if he withdrew the German troops from the Rhineland (Document 3). Furthermore, if Hitler refused to do so, Fra nce was willing to use force, if necessary (Document 3) Haile Selassie, Emperor of Ethiopia, believed that Germany would continue to attack and conquer land and the people who lived there, regardless of location – and wouldn t stop until they were the most powerful. That is why Selassie believed that the League of Nations should stop the aggressors (Document 2). Unfortunately, the League of Nations refused to get involved, which allowed Germany toShow MoreRelatedThe World Of World War 21383 Words   |  6 Pages World War 2 was one of the most catastrophic events in human history. With millions dying in very few years, the destruction has left a scar on nations that is still visible in the present day. One of the most terrifying nations back during the days of war was Japan. Their culture promoted war, fighting, and being as ruthless as possible, causing them to be an extreme threat to world peace. The military looked into ancient myths about the Japanese, and the Emperor in particular, as they were saidRead MoreWorld War 2 : A Global War1579 Words   |  7 PagesWorld War 2 was a global war from 1939 to 1945 between the Allies and the Axis powers. During the war, over 120,000 American prisoners of war were captured by the German forces. World War 2 started through the bomb in Hiroshima on August 6th 1945. Around 8,000 people died because of radioactive from the bomb. The German prison camps were for mostly Jews since Hitler, the Chancellor of Germany, was against the Jewish religion.The internment camps were in very harsh conditions and many prisoners wereRead MoreWorld War 2 : The Good War1097 Words   |  5 PagesWorld War 2 was known as the good war. The fight for democracy was a big deal to president Franklin and it was a very well fought war. America throughout the war learns to overcome things and start to become more accepting. The war helps unite both blacks and whites to a fight for the same goal. We get our revenge of the bombing at Pea rl Harbor, we work with a very brutal dictator, and we tried to stay neutral for as long as we could. For example in doc 1 the president is advised to stay out of theRead MoreWorld War 2 Paper1057 Words   |  5 PagesCastro, Nazzi 1CA5 I. Introduction For a start, there’s disagreement on when the war started and two common dates for when it finished. In terms of Europe, Russia generally holds that the Great Patriotic War began on June 22nd 1941 with Operation Barbarossa (the German invasion of Russia) while Western Europe uses September 1st 1939, the German invasion of Poland. Both use the date of Germany s unconditional surrender as the end in Europe, but the Western Allies accepted theRead MoreWomen in World War 2888 Words   |  3 Pagesto help the war effort. It was 1941 and the United States finally entered World War II. Most propaganda of the United States encouraged the average women to join the workforce and help with the war effort. With men fighting abroad, it was only necessary for women to start working and leave their normal lives of being a mother and wife. The War Department of the United States emphasized that with women working hard their sons, brothers, and husbands could return quicker (Women at War). Women becameRead MoreDBQ world war 22318 Words   |  10 PagesName_______________________________________ Date____________________________ DBQ 21: Causes of World War II (Adapted from Document-Based Assessment for Global History, Walch Education) Historical Context: Even though the 1920’s began with a favorable outlook for peace, toward the end of the decade and throughout the 1930’s the clouds of war were forming. Dictators arose in countries that were dissatisfied with the results of World War I. Germany, Italy and Japan took aggressive actions, and neither the League ofRead MoreThe Events Of World War 22008 Words   |  9 Pages World War 2 was undoubtedly one of the most important events in history not only for what happened throughout the six years of war but also the aftermath of the war. Beyond the casualties and deaths this devastating war would open new doors for technology advancement, medicine innovations and creations also changes in music ,art ,sports and culture. Furthermore back home in the United States the role of women was beginning to shape up during the conflict at the other side of the world . PreviousRead MoreEssay On World War 2787 Words   |  4 PagesHidden Impacts in World War II World War Two ended after much hard work, followed with celebration and joy. But are the reasons we came to victory more than what we think? During the hard times we once faced, many brave women would sacrifice all they had to contribute to the war in some way. Even if it was something as simple as making inspirational posters, it still helped tremendously. In many ways, women who played a part in the war affected it greatly and the bravery they showed set a hugeRead MoreThe Chronology of World War 1 that Lead to World War 2742 Words   |  3 PagesMany who lived to see the horrendous times of World War 2 have used this phrase to achieve both these ends, for it gives them some small comfort to think that there is some grandiose and powerful meaning behind the happening s of this tragedy. However, as nice as it would be to imagine that there was some deeper meaning to it, WWII was a war not very different from other wars; at least, not in how it came to happen. It had similar causes to many wars; peace was attempted in many time-tried fruitlessRead MoreWorld War 2 essay (Canada)1452 Words   |  6 Pagesï » ¿ During the course of the Second World War, Canada evolved into a powerful, resourceful nation that was needed by the Allies. Canada contributed significantly to the Allied war effort during World War II where they fought on land, water and air and assisted indirectly from the home front. On land, they fought in numerous battles and campaigns such as D-Day, Hong Kong, and the Italian campaign. However, they were also strong and resourceful when it came to air and naval forces in battle. But

Decision Making Case Study Essay - 893 Words

Decision Making Case Study Stefanie Parker HCS/514 June 24, 2011 Kendra Slatton Decision Making Case Study The standard definition of decision making is; the process of mapping the likely consequences of decisions, working out the importance of individual factors and choosing the best course of action to take (Definition of decision,). In this case study effective decision making tools will be used to choose the best course of action to take in the scenario. The scenario is; as a manager in a county clinic that provides care to Medicaid clients, your department budget was recently cut by 15%. From a statewide health policy standpoint, given a defined budget constraint what clinical services should be eliminated or†¦show more content†¦Using this tool, I would be able to find evidence of past successes or failures in similar healthcare budget cuts. Research could determine the priorities of the Medicaid community and the care that is the most important to them. Collecting data on efficiency statistics may allow the organization to keep important services by improving process flo ws and reducing waste. Some of the research tools include interviews, academic journals, data warehouses, and the Internet (Rundall et al., 2007). The steps following the research collection, which include evaluating the data and taking action are also very important but are only as valuable as the data used for those steps and tools. Based upon the surveys, interviews, and research done the clinical services that would be eliminated during the budget constraints would be; the community-based weekend and after hour’s clinic for Medicaid patients who do not have a primary care provider as well as putting a cap on the number of Medicaid patients that the clinic will see. The clinic generally is losing money and has been subsidized by other services. The recommendation would be to eliminate the weekend hours, which would reduce our spending at the clinic because of a reduction in staffing. Putting a cap on the number of Medicaid patients that the clinic will see will help with expenses as Medicaid has low reimbursement rates, and the clinic is not receiving enough money back on these patients toShow MoreRelatedDecision Making Case Study1281 Words   |  6 PagesDecision-Making Case Study HCS/514 Decision-Making Case Study The current state of the economy has had a significant impact on health care across the country. Recipients of Medicaid services have especially been hit hard in the health care arena with budget cuts and reduced services. The Maricopa County Clinic is not different when it comes to budget cuts. The department providing outpatient services to Medicaid clients has received a 15% budget cut. 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It will try to show what problems in team likely cause the team in taking a wrong or ineffective decision taking the case of Brigham Young University as a base. This paper would also tryRead MoreDecision Making Case Study Essay1483 Words   |  6 PagesDecision Making Case Study HCS/514 Managing in Todays Health Care Organizations Instructor: Darlene Cantu Camille F. Fuller Decision Making Case Study Health care is one of the largest growing industries in the country. Technology and medical advancements attribute to the constant changes in the health care industry. The economy also continues to change, and with the changing economy health care cost continue to rise. Companies across the nation have either closed or moved to other countriesRead MoreCase Study : Ethical Decision Making2110 Words   |  9 Pages Module 1 Assignment 3: Case Study: Ethical Decision Making April Culberson Argosy University Module 1 Assignment 3 Summarized the behavior you consider unethical and unprofessional in the case study. Substantiated the analysis with reasons After reading the case study, it becomes apparent the many questionable behaviors Joe commits while counseling Jill. First is his reaction towards Jill’s confession concerning sexual confusion about being attracted to other women. Joe’s expression (shockedRead MoreManagement: Decision Making and Case Study3581 Words   |  15 PagesFaculty of Business, Economics Accounting Department of Business Studies HELP Bachelor of Business Year 1 (HONS) – HUBBU CASE STUDIES Semester 1, 2011 Subject: MGT 101 Principles of Management Subject Lecturer/ Tutor(s): Puan Norzan Abdullah ANALYZING A CASE STUDY STAGE 1: QUICKLY GO THROUGH THE GENERAL SCENARIO PRESENTED TO GAIN A GENERAL UNDERSTANDING OF THE SITUATION. ï‚ · Underline/highlight information which may indicate problems exist STAGE 2: EXAMINE THE QUESTIONS CAREFULLY ï‚ · Read theRead MoreEthical Decision-Making: Case Studies648 Words   |  3 PagesDecision point: What would you do? In Scenario 1, I would return the iPod to the schools lost and found or post a notice advertising a found iPod in the school newspaper (it would be easy enough to identify the legitimate owner, as I would merely ask the respondent to identify the songs on the playlist). 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Corporate Finance Test Notes Example For Students

Corporate Finance Test Notes Final Exam Corporate Finance FINC 650 1. Which of the following is not considered a capital component for the purpose of calculating the weighted average cost of capital as it applies to capital budgeting? a. b. c. d. e. Long-term debt. Common stock. Short-term debt used to finance seasonal current assets. Preferred stock. All of the above are considered capital components for WACC and capital budgeting purposes. 2. A company has a capital structure which consists of 50 percent debt and 50 percent equity. Which of the following statements is most correct? a. b. c. d. The cost of equity financing is greater than the cost of debt financing. The WACC exceeds the cost of equity financing. The WACC is calculated on a before-tax basis. The WACC represents the cost of capital based on historical averages. In that sense, it does not represent the marginal cost of capital. e. The cost of retained earnings exceeds the cost of issuing new common stock. 3. Which of the following statements is most correct? a. Preferred stock does not involve any adjustment for flotation cost since the dividend and price are fixed. b. The cost of debt used in calculating the WACC is an average of the after-tax cost of new debt and of outstanding debt. c. The opportunity cost principle implies that if the firm cannot invest retained earnings and earn at least rs, it should pay these funds to its stockholders and let them invest directly in other assets that do provide this return. d. The cost of common stock, rs, is usually less than the cost of preferred stock. 4. Assume a project has normal cash flows (i.e., the initial cash flow is negative, and all other cash flows are positive). Which of the following statements is most correct? a. b. c. d. e. All else equal, a project s IRR increases as the cost of capital declines. All else equal, a project s NPV increases as the cost of capital declines. All else equal, a project s MIRR is unaffected by change s in the cost of capital. Answers a and b are correct. Answers b and c are correct. 5. Which of the following statements is most correct? a. The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method assumes reinvestment at the IRR. b. The NPV method assumes that cash flows will be reinvested at the risk free rate while the IRR method assumes reinvestment at the IRR. c. The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method assumes reinvestment at the risk-free rate. d. The NPV method does not consider the inflation premium. e. The IRR method does not consider all relevant cash flows, and particularly cash flows beyond the payback period. 6. Project A and B both have normal cash flows. Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a cost of capital of 12 percent. Which of the following statements is most correct? a. Both projects have a positive net present value (NPV). b. Project A must have a higher NPV th an Project B. c. If the cost of capital were less than 12 percent, Project B would have a higher IRR than Project A. d. Statements a and c are correct. e. Statements a, b, and c are correct. 7. Which of the following statements is most correct? a. If a project with normal cash flows has an IRR which exceeds the cost of capital, then the project must have a positive NPV. b. If the IRR of Project A exceeds the IRR of Project B, then Project A must also have a higher NPV. c. The modified internal rate of return (MIRR) can never exceed the IRR. d. Answers a and c are correct. e. None of the answers above is correct. 8. Which of the following is not an incremental cash flow that results from the decision to accept a project? a. b. c. d. e. Changes in working capital. Shipping and installation costs. Sunk costs. Opportunity costs. Cannibalization of existing products. 9. Risk in a project which has only negative cash flows can best be adjusted for by a. b. c. d. e. Ignoring it. Adjusting the discount rate upward for increasing risk. Adjusting the discount rate downward for increasing risk. Picking a risk factor equal to the average discount rate. Reducing the NPV by 10 percent for risky projects. 10. Suppose the firm s WACC is stated in nominal terms, but the project s expected cash flows are expressed in real dollars. In this situation, if prices are expected to increase, the calculated NPV would a. b. c. d. e. Be correct. Be biased downward. Be biased upward. Possibly have a bias, but it could be upward or downward. More information is needed; otherwise, we can make no reasonable statement. 1. Heino Inc. hired you as a consultant to help them estimate their cost of capital. You have been provided with the following data: rRF = 5.0%; RPM = 5.0%; and b = 1.1. Based on the CAPM approach, what is the cost of equity from retained earnings? A. 10.50% b. 10.71% c. 10.88% d. 11.03% e. 11.14% rs = 5% + (5%)*1.1 = 10.50% 2. P. Daves Inc. hired you as a consultant to help them estimate their cost of equity. The yield on the firm’s bonds is 6.5%, and Daves investment bankers believe that the cost of equity can be estimated using a risk premium of 4.0%. What is an estimate of Daves cost of equity from retained earnings? a. 9.77% b. 10.02% c. 10.19% d. 10.33% E. 10.50% 6.5% + 4% = 10.5% 3. You were recently hired by Hemmings Media, Inc., to estimate their cost of capital. You were provided with the following data: D1 = $2.50; P0 = $60; g = 7% (constant); and F = 5%. What is the cost of equity raised by selling new common stock? a. 11.02% b. 11.20% C. 11.39% d. 11.58% e. 11.74% 2.50/(60* 95%) + 7% = 11.39% 4. For a typical firm, which of the following is correct? All rates are after taxes, and assume the firm operates at its target capital structure. a. rd re rs WACC. b. rs re rd WACC. c. WACC re rs rd. D. re rs WACC rd. e. WACC rd rs re. 5. Maese Sisters Inc has been paying out all of its earnings as dividends, and hence has no retained earnings. This same situation is expected to persist in the future. The company uses the CAPM to calculate its cost of equity. Its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would reduce the WACC? a. The flotation costs associated with issuing new common stock increase. B. The market risk premium declines. c. The company’s beta increases. d. Expected inflation increases. e. The flotation costs associated with issuing preferred stock increase. 6. Which of the following statements is CORRECT? a. In the WACC calculation, we must adjust the cost of preferred stock (the market yield) because 70% of the dividends received by corporate investors are excluded from their taxable income. b. We should use historical measures of the component costs from prior financings when estimating a company’s WACC for capital budg eting purposes. c. The cost of new equity (re) could possibly be lower than the cost of retained earnings (rs) if the market risk premium, risk-free rate, and the company’s beta all decline by a sufficiently large amount. d. The component cost of preferred stock is expressed as rp(1 T), because preferred stock dividends are treated as fixed charges, similar to the treatment of debt interest. E. The cost of retained earnings is the rate of return stockholders require on a firm’s common stock. Gothic and Arabic influences Essay21. Millman Electronics will produce 60,000 stereos next year. Variable costs will equal 50% of sales, while fixed costs will total $120,000. At what price must each stereo be sold for the company to achieve an EBIT of $95,000? a. $6.57 b. $6.87 C. $7.17 d. $7.47 e. $7.77 60,000X – 30,000X – 120,000 = 95,000 30,000X = 215,000 X = $7.1667 22. Brandi Co. has an unlevered beta of 1.10. The firm currently has no debt, but is considering changing its capital structure to be 30% debt and 70% equity. If its corporate tax rate is 40%, what is Brandi s levered beta? a. 1.2549 B. 1.3829 c. 1.5764 d. 1.6235 e. 1.7458 Levered Beta = Unlevered Beta = 1.3829 23. If a stock’s dividend is expected to grow at a constant rate of 5% a year, which of the following statements is CORRECT? The stock is in equilibrium. a. The expected return on the stock is 5% a year. b. The stock’s dividend yield is 5%. c. The price of the stock is expected to decline in the future. d. The stock’s required return must be equal to or less than 5%. E. The stock’s price one year from now is expected to be 5% above the current price. 24. The firm’s target capital structure is consistent with which of the following? a. Maximum earnings per share (EPS). b. Minimum cost of debt (rd). c. Highest bond rating. d. Minimum cost of equity (rs). E. Minimum weighted average cost of capital (WACC). 25. Which of the following statements is CORRECT? A. The capital structure that maximizes stock price is also the capital structure that minimizes the weighted average cost of capital (WACC). b. The capital structure that maximizes stock price is also the capital structure that maximizes earnings per share. c. The capital structure that maximizes stock price is also the capital structure that maximizes the firm’s times interest earned (TIE) ratio. d. Increasing a company’s debt ratio wi ll typically reduce the marginal costs of both debt and equity financing; however, it still may raise the company’s WACC. e. If Congress were to pass legislation that increases the personal tax rate, but decreases the corporate tax rate, this would encourage companies to increase their debt ratios. Show your work for problems and label your answers. 1. (12 points) Flagstaff Manufacturing’s (FM) only debt is represented by 800,000 bonds with a market price per bond of $1,050. It has 20 million shares of common stock outstanding with a market price of $50 per share, and no preferred stock. a. Calculate the market value of long-term debt and common equity, and the percentage of capital obtained from each source. $ % Debt 840M .4565 ComSt 1,000M .5435 Total 1,840M b. The bonds have a coupon rate of 7% and based on the market price of the bonds, the yield to maturity is 6%. FM has a 40% tax rate. Calculate the after-tax cost of debt financing. ATrd = 6 (.6) = 3.6% The market price of common stock is $50. The firm paid a dividend of $2.00 per share of common stock in the fiscal year that just ended. Dividends are expected to increase at an annual rate of 5%. The stock’s beta is 0.70. The risk-free rate is 5% and the expected return on the market is 11%. c. Calculate the required return on common stock using CAPM. rs = 5 + .70(6) = 9.2% d. FM does not plan to sell any additional shares of common stock this year and anticipates adding $20 million to retained earnings this year. Use the market value weights and your answers above to calculate the weighted average cost of capital (WACC). WACC = .4565 (3.6) + .5435 (9.2) = 6.64% 3. (10 points) Acme Chemical is considering two mutually exclusive machines: Machine X has a cost of $60,000 and provides after-tax cash flows of $42,000 per year for 2 years. It has a required return of 10%. Project Y has a cost of $100,000, provides after-tax cash flows of $40,000 per year for 4 years and has a required return of 12%. Machine prices and cash flows are expected to remain constant in the foreseeable future. Evaluate the two machines and make a decision: which should Acme purchase and why? Show your analysis, including any necessary calculations and make it clear what your decision is based on. Over a common 4-year life, the replacement chain NPVs are: X = $23,548 Y = $21,494 The equivalent annual annuities are: X = $7,429 Y = $7,077 Project X should be chosen: it has higher RCNPV and higher EAA. 4. (10 points) The cash flows associated with a project under consideration are shown below. The required return is 10%. Year 0 1 2 3 CF (1,000) 500 400 200 a. Calculate the NPV of the project. NPV = -$64.61 b. Calculate the IRR of the project IRR = 5.73% c. Calculate the MIRR of the project. MIRR = 7.58% 5. (20 points) Replacement project. Existing machine was purchased 1 years ago at a cost of $20,000. For tax purposes, it is being depreciated straight line at $4,000 annually. It can be sold now for 12,000 or used for 4 more years at which time it will be sold for an estimated $2,500. It provides revenue of $15,000 annually and has cash costs of $4,200 annually. A replacement machine can be purchased now for $26,000. It would be used for 4 years, and depreciated using straight line at $6,500 annually. It will result in total sales revenue of $20,000 annually, but because of its increased efficiency its cash expense would remain at $4,200 annually. It is expected to have a salvage value of $4,400 in 4 years. The new machine would require additional inventories of $800, and accounts payable would increase by $500. The tax rate is 40% and the required rate of return is 10%. a. Calculate the incremental initial cash flow associated with acquiring the replacement machine (i.e., CF0). Pri ce of new -ATSV of old, if sold now Increase in net WC Initial investment 26,000 -13,600 300 12,700 The initial investment is a negative cash flow.