Superior Clamps, Inc., has a capital structure consisting of 7 million shares common stock and 900,000 warrants. Each warrant gives its owner the right to purchase one share of newly issued common stock for an exercise price of $25. The warrants are European and will expire one year from today. The market value of the company's assets is $165 million, and the annual variance of the returns on the firm's assets is .20. Treasury bills that mature in one year yield a continously compounded interest rate of 7 percent. The company does not pay a dividend. Use the Black Scholes model to determine the value of a single warrant.

The Lopez-Portillo Company has $10.6 million in assets, 80 percent financed by debt and 20 percent financed by common stock. The interest rate on the debt is 9 percent and the par value of the stock is $10 per share. President Lopez-Portillo is considering two financing plans for an expansion to $18 million in assets. Under Plan A, the debt-to-total-assets ratio will be maintained, but new debt will cost a whopping 12 percent! Under Plan B, only new common stock at $10 per share will be issued. The tax rate is 40 percent. If EBIT is 9 percent on total assets, compute earnings per share (EPS) before the expansion and under the two alternatives. Note: Round your answers to 2 decimal places. What is the degree of financial leverage under each of the three plans? Note: Round your answers to 2 decimal places. If stock could be sold at $20 per share due to increased expectations for the firm's sales and earnings, compute earnings per share for each alternative. Note: Round your answers to 2…

Nancy John, a bright, female investment analyst about to give a major presentation to a group of bankers supporting a corporate acquisition. After walking in and meeting the bankers before you give the presentation, you're asked by your boss to "be a dear and serve them coffee." Imagine the insult and awkwardness of such a situation-what do you do? Do you carry through with the task, sacrificing your dignity or doing something wrong because you can't afford to lose the job? Or do you speak up? A group of Swiss occupational health researchers have recently started a program of research on illegitimate tasks, or tasks that violate "norms about what can reasonably be expected from a given person" in a job. Question: 1. What do you think of this situation? 2. What might cause supervisors and managers within organizations to allocate these kinds of tasks? 3. Can you explain it based on 'positive reinforcement' behavior and suggest some suggestion?

Blooming Ltd. currently has the following capital structure: Debt: $2,500,000 par value of outstanding bond that pays annually 12% coupon rate with an annual before-tax yield to maturity of 109%. The bond issue has face value of $1,000 and will mature in 25 years. Ordinary shares: 65,000 outstanding ordinary shares. The firm plans to pay a $7.50 dividend per share in the next financial year. The firm is maintaining 3% annual growth rate in dividend, which is expected to continue indefinitely. Preferred shares: 40 000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 14%. Company tax rate is 30%. Required: Complete the following tasks: 3) Calculate the current price of the corporate bond? b) Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%: - c) Calculate the current value of the preferred share if the average return of the shares in the same industry is 12% d) Calculate the current market…