Q8a

/in /by

Which one of the following statements is correct?

 

 

To maximize the value of a firm you need to maximize the firm’s WACC.
 

 

A Chapter 7 bankruptcy is a legal process for reorganizing a firm.
 

 

Investors can use homemade leverage to offset firm leverage.
 

 

To maximize the value of a firm you need to borrow as much as you can.

 

2.     A firm has 100,000 shares of stock outstanding. The firm is considering borrowing $1.3 million at 7.5% interest and using the loan proceeds to repurchase 25,000 shares of stock. What is the value of the firm? Ignore taxes.

 

 

$5.20 million
 

 

$5.98 million
 

 

$6.50 million
 

 

$7.25 million

 

3.     A firm has a debt-equity ratio of 1.0. The required return on the firm’s assets is 16.1% and the pre-tax cost of debt is 9.1%. Ignore taxes. What is the firm’s cost of equity?

 

 

15.3%
 

 

18.2%
 

 

23.1%
 

 

21.7%

 

4.     A company is an all-equity firm that has projected earnings before interest and taxes (EBIT) of $500,000 forever. The current cost of equity is 15% and the tax rate is 33%. The company is in the process of issuing $1.5 million of bonds at par that carry a 6% annual coupon. What is the unlevered value of the firm (in millions)? (Note: You should use MM capital structure model with corporate taxes, but without personal taxes and bankruptcy costs.)

 

 

$2.05 million
 

 

$2.23 Million
 

 

$2.56 Million
 

 

$2.85 Million

 

5.     From Question 4, what is the levered value of the firm (in millions)?_______

 

 

 

$2.05 million
 

 

$2.36 million
 

 

$2.56 million
 

 

$2.73 million

Finance question

/in /by

Corporate governance has become increasingly important over the years.  The Sarbanes-Oxley (SOX) Act was enacted to improve transparency in financial accounting and to prevent fraud.  Which of the following is correct?

 

 fraud has not occurred since enactment of SOX

 SOX has not increased auditing costs

 government agencies are not required to comply withSOX

 SOX requires companies to have a strong board ofdirectors

 none of the above

 

 

 

 

Tactics that firms use to avoid hostile takeovers include:

 greenmail

 shareholder rights provisions.

 restricted voting rights.

 poison pills.

 all of the above

 

 

 

Both Adams and Wolfe are large public corporations with subsidiaries throughout the world.   Adams  uses a centralized approach and  makes most of the decisions for its subsidiaries.  Wolfe  uses a decentralized approach and its subsidiaries make most of their own decisions.   Which of the following is correct?

 the agency problem would probably be more pronounced for Wolfe because of a higher probability that subsidiary decisions would conflict with the parent

 agency costs would be the same for both companies

 a decentralized approach is almost always better

 a centralized approach is almost always better

 none of the above

 

 

 

 

With convertible bonds, 

 the company receives additional cash money when the convertibles are converted.

 Investors are willing to accept a lower interest rate on a convertible than on otherwise similar straight debt

 Investors require a higher interest rate than on otherwise similar straight debt

 the convertibles cannot be converted for at least 10 years

 none of the above

 

 

 

A firm’s common stock currently sells for $17.50.  Its 10% convertible bonds (issued at par $1000)  now sell for $900 and the conversion price is $20.  What is the conversion ratio?

 87.5

 17.5

 50.0

 45.00

 none of theabove

 

 

 

Convertible bonds are:

 considered equity on the balance sheet

 similar in risk to the company’s common stock

 riskier than the company’s common stock

 less risky than the company’s common stock

 none of the above

 

 

 

 

 

 

 

 

 

 

KORO Corporation’s common stock currently sells for $27.50.  Its  8% convertible bonds (issued at par $1000) now sell for $950.   The bonds can be converted into 40 shares of common stock.  What is the conversion price?

 $25

 $40

 $23.50

 $38

 none of the above

 

 

 

KORO Corporation’s common stock currently sells  for $27.50.  Its  8% convertible bonds (issued at par $1000) now sell for $950.   The bonds can be converted into 40 shares of common stock.  What is the conversion value of the bond?

 $688

 $593.75

 $950

 $1,100

 none of the above

 

 

 

 

Which of the following is correct?

 

Warrants are similar to long-term put options

 

The company receives additional funds when warrants are exercised

 

The company receives additional funds when bonds are converted

 

Warrants can sometimes be detached and traded separately from the debt with which they were issued, but this is unusual.

 

none of the above

 

 

 

 

A company will issue 20-year bonds with annual interest payments.  Each bond will include 20 warrants that give the holder to purchase one share of stock per warrant.  Each warrant is expected to have a value of $5.75.  A similar straight-debt issue would require an 8% coupon.  What coupon rate should be set on the bonds with warrants so that the package will sell for $1,000?

 5.76%

 6.83%

 7.94%

 6.98%

 none of the above

 

week 3 assignment need an A GEN499

/in /by

 

Week 3 – Assignment

Introduction, Thesis Statement, and Annotated Bibliography

Prepare: To help with the preparation of your annotated bibliography, review the following tutorials and resources from the Ashford Writing Center:

Reflect: Reflect back on the Week Two Discussion in which you shared with the class the global societal issue that you would like to further address. Explore critical insights that were shared by your peers and/or your instructor on the topic chosen and begin your search for scholarly sources with those insights in mind.

Write: For this assignment, review the Annotated Bibliography Formatting GuidelinesPreview the documentView in a new window and address the following prompts:

  • Introductory Paragraph to Topic: Refer to the Final Argumentative Essay guidelines for your topic selection. Write an introductory paragraph with at least 150 words, which clearly explains the topic, the importance of further research, and ethical implications.
  • Thesis statement: Write a direct and concise thesis statement, which will become the solution to the problem that you will argue or prove in the Week Five Final Argumentative Essay. A thesis statement should be a declarative statement that makes one point in 25 words or less. The thesis statement must appear at the end of the introductory paragraph.
  • Annotated Bibliography: Develop an annotated bibliography to indicate the quality of the sources you have read. For each annotation, you need to summarize in your own words how the source contributes to the solution of the global societal issue. Your annotation should be one to two paragraphs long (150 words or more) and fully address the purpose, content, evidence, and relation to other sources you found on this topic. The annotated bibliography must include no less than five scholarly sources that will be used to support the major points of the Final Argumentative Essay. Critical thinking skills need to be demonstrated by accurately interpreting evidence used to support various positions of the topic.

The Introduction, Thesis Statement, and Annotated Bibliography Assignment

  • Must be 1,000 – 1,250 words in length (excluding the title and reference pages) and formatted according to APA style as outlined in the Ashford Writing Center (Links to an external site.)Links to an external site..
  • Must include a separate title page with the following:
    • Title of paper
    • Student’s name
    • Course name and number
    • Instructor’s name
    • Date submitted
  • Must use at least five scholarly sources.
  • Must document all sources in APA style as outlined in the Ashford Writing Center.

Supply Chain Managemenet

/in /by

 Write 400–600 Words That Respond To The Following Questions With Your Thoughts, Ideas, And Comments. Be Substantive And Clear, And Use Examples To Reinforce Your >

The Director of Operations for your company has been trying to introduce logistics and supply chain management principles to your management team without much success. She has excitedly called you into her office to discuss a seminar she attended last week. During the seminar, she participated in a distribution simulation, referred to as “The Beer Game” (see supporting materials below). She commented that the simulation gave her a complete understanding of what the supply chain is, the dynamics of a supply chain, and how it operates. She also found several articles that explain logistics and supply chain management very well. She requested that you conduct research to provide her with talking points that cover the fundamentals of logistics and the supply chain. She asked that you include the following in your talking points: 

·  Provide an overview of a supply chain, including the elements that make up a supply chain.

·  What are the “flows” within a supply chain, and why are they important?

·  What are supply chain coordination and supply chain disruption, and how are these manifested in a supply chain?

Supporting Materials for “The Beer Game”

·  Video: MASHLM usi. (2014, March 14). The beer game – MASHLM [Video file]. Retrieved from https://www.youtube.com/watch?v=qxpgM8paegQ

·  Article: Sterman, J. D. (1992). Teaching takes off: Flight simulators for management education: “The beer game.” Retrieved fromhttp://web.mit.edu/jsterman/www/SDG/beergame.html

Supply Chain

/in /by

 Write 400–600 Words That Respond To The Following Questions With Your Thoughts, Ideas, And Comments. Be Substantive And Clear, And Use Examples To Reinforce Your >

The Director of Operations for your company has been trying to introduce logistics and supply chain management principles to your management team without much success. She has excitedly called you into her office to discuss a seminar she attended last week. During the seminar, she participated in a distribution simulation, referred to as “The Beer Game” (see supporting materials below). She commented that the simulation gave her a complete understanding of what the supply chain is, the dynamics of a supply chain, and how it operates. She also found several articles that explain logistics and supply chain management very well. She requested that you conduct research to provide her with talking points that cover the fundamentals of logistics and the supply chain. She asked that you include the following in your talking points: 

·  Provide an overview of a supply chain, including the elements that make up a supply chain.

·  What are the “flows” within a supply chain, and why are they important?

·  What are supply chain coordination and supply chain disruption, and how are these manifested in a supply chain?

Supporting Materials for “The Beer Game”

·  Video: MASHLM usi. (2014, March 14). The beer game – MASHLM [Video file]. Retrieved from https://www.youtube.com/watch?v=qxpgM8paegQ

·  Article: Sterman, J. D. (1992). Teaching takes off: Flight simulators for management education: “The beer game.” Retrieved fromhttp://web.mit.edu/jsterman/www/SDG/beergame.html

The Career Decision Submission

/in /by

Assignment Details

As you have learned in this unit, most people just let their careers happen. They do not plan and pursue the activities needed to make a particular career happen. In addition to researching careers and industries and networking with professionals in those industries, it is important to create a career plan.

Click here to download a template used to create a career plan for your final 2 years at the University (even if you have more than 2 years or fewer than 2 years left):

You will be filling out the following sections:

  • Long-Term Goals: What is your ultimate career goal (e.g., I would like to run my own manufacturing company)?
  • Short-Term Goals: What is your immediate career goal (e.g., I would like to obtain a position as a production assistant in a medium-to-large manufacturing company)?
  • Experience to Date: What current experience do you have that could help you obtain this position/career goal (e.g., college education, past employment, volunteer, special skills)?
  • Experience Needed: What additional skills do you need to pursue this position/career goal (e.g., additional education, experience in the industry, training)?
  • Activities to Perform to Obtain Needed Experience: What can you do to obtain the experience needed for this position/career goal (e.g., go back to school, volunteer, network)?
  • Courses to Take: What courses can you take in your final quarters that could help you obtain this position/career goal (e.g., Supply Chain Management, Entrepreneurship, Accounting)?
  • Tracking Sheet: Record the activities that you have performed and the contacts that you have made in each of the remaining quarters at the University. Note: Because this task is meant to be a recording if things that you have already done, you will need to make up these events (e.g., joined student chapter of APICS, met John Doe, VP of Operations at ABC Company).

BUSM 255 Forex

/in /by

This is a required assignment for everyone in the class. Failure to complete it and post it will lower your grade one letter grade.  

It is outlined on the course syllabus which is under Course Information on the left.  

You will be able to complete the first three parts of this assignment after completing chapter 3.  I want this part in draft early in the term. See the syllabus for parts 1-2-3. 

The fourth part is not possible until chapter 18 has been completed. 

You can, however, choose a product now that is available in another country, like a Big Mac or any product that is sold in both the United States and the country you choose!  You will have to find the price of that product in that country, and here as well.  Then, in November depending on when you will turn it in, you will find the nominal exchange rate for the two currencies. I have created a link to aide you under External Links.  You will choose your country and the currency converter will do it for you.  Once you have that conversion, there is a formula in chapter 18 on the presentation option of the power points. This formula is used to calculate the REAL exchange rate.  It is also explained below.   Once you have the price of the product here in the United States and the price of the same product in the country you chose for the required assignment, and the nominal exchange rate for the two currencies using the currency converter under External Links, you will be able to use the formula to find the real exchange rate. 

Once chapter 18 is completed, you can do part 4. 

After completing the calculation to find the real exchange rate using the formula below, you will write an analysis statement defining your results. 

HERE IS THE “analysis statement” YOU MUST use after the calculation to safeguard against misinterpretation of the real exchange rate.  YOU must use the statement BELOW. 

Correct interpretation

 example: 

This example is from chapter 18, slides 25, 26,and 27 of the

 presentation view format. The slides preceding and following

 explain this concept.

 Substitute YOUR country, YOUR product, and YOUR

real exchange rate where it says: Big Mac, Japanese, and .75

 Big Mac’s in Japan in the example.

“To buy a Big Mac in the U.S., a Japanese citizen must give up an

amount that could

 purchase .75 Big Mac’s in Japan. “

This should be the INTERPRETATION OR ANALYSIS statement that follows your calculation!

This is the formula: 

real exchange rate= e x P / P*

 where e is the nominal exchange rate from the Currency Converter under External Links,

where P is the price in the U. S. in dollars,

and P* is the price of the product in the country you chose in that currency.

The x means times or multiply and / means divided by. 

YOU MUST MULTIPLY THE NOMINAL RATE YOU FIND ON THE CURRENCY CONVERTER TIMES THE PRICE IN THE U.S., WHEN YOU HAVE THAT ANSWER, THEN DIVIDE BY THE PRICE IN THAT CURRENCY. 

 

Texas Woman’s University BUS4133 Ch 8 Quiz – PROMOTIONAL STRATEGY

/in /by

 

                                Review Test Submission: Ch. 8 Quiz

 

                                                Course  14FABUS413301 PROMOTION STRAT

 

                                                                                Test Ch. 8 Quiz

 

Question 1                                                                                                                                          0 out of 0.5 points

 

Using an existing brand name on new products is referred to as brand:                                 

 

Question 2                                                                                                                                          0 out of 0.5 points

 

Jello decides to introduce a new flavor of pudding:  mocha. This pudding will be sold alongside its other flavors. This new product is an example of a:                                        

 

Question 3                                                                                                                                          0 out of 0.5 points          

 

The four types of objectives discussed in the chapter are marketing, advertising, creative, and __________:                                    

 

Question 4                                                                                                                          0.5 out of 0.5 points

 

Acme Inc. does a survey and finds out that by and large people don’t like the taste of their candy bars. In which section of the SWOT analysis should this fact go?                                  

 

Question 5                                                                                                                                          0 out of 0.5 points

 

Which type of branding has the goal of enhancing the overall image of the firm?              

 

 

 

 

 

Corporate Finance (Berk/DeMarzo)- Chapter 2 – Introduction to Financial Statement Analysis

/in /by

 

Corporate Finance (Berk/DeMarzo)- Chapter 2 – Introduction to Financial Statement Analysis

 

 

2.1 The Disclosure of Financial Information

1)


U.S. public companies are required to file their annual financial statements with the U.S. Securities and Exchange Commission on which form?


A)


10–A


B)


10–K


C)


10–Q


D)


10–SEC


 


 


2)


Which of the following is not a financial statement that every public company is required to produce?


A)


Income Statement


B)


Statement of Sources and Uses of Cash


C)


Balance Sheet


D)


Statement of Stockholders’ Equity


 


 


3)


The third party who checks  annual financial statements to ensure that they are prepared according to GAAP and verifies that the information reported is reliable is the


A)


NYSE Enforcement Board.


B)


Accounting Standards Board.


C)


Securities and Exchange Commission (SEC).


D)


auditor.


 

 


 

2.2 The Balance Sheet


1)


Which of the following balance sheet equations is incorrect?


A)


Assets – Liabilities = Shareholders’  Equity


B)


Assets = Liabilities + Shareholders’ Equity


C)


Assets – Current Liabilities = Long Term Liabilities


D)


Assets – Current Liabilities = Long Term Liabilities + Shareholders’ Equity


 


3)


Accounts payable is a


A)


Long–term liability.


B)


Current Asset.


C)


Long–term asset.


D)


Current Liability.


 


4)


A 30 year mortgage loan is a


A)


Long–term liability.


B)


Current Liability.


C)


Current Asset.


D)


Long–term asset.


 


 


5)


Which of the following statements regarding the balance sheet is incorrect?


A)


The balance sheet provides a snapshots of the firm’s financial position at a given point in time.


B)


The balance sheet lists the firm’s assets and liabilities.


C)


The balance sheet reports stockholders’ equity on the right hand side.


D)


The balance sheet reports liabilities on the left hand side.


 


 


Use the table for the question(s) below.

 

Consider the following balance sheet:

 

Luther Corporation

Consolidated Balance Sheet

December 31, 2006 and 2005 (in $ millions)

 

Assets

2006

2005

 

Liabilities and Stockholders’ Equity

2006

2005

Current Assets

 

 

 

Current Liabilities

 

 

Cash

63.6

58.5

 

Accounts payable

87.6

73.5

Accounts receivable

55.5

39.6

 

Notes payable /

short–term debt

10.5

9.6

Inventories

45.9

42.9

 

Current maturities of long–term debt

39.9

36.9

Other current assets

6.0

3.0

 

Other current liabilities

6.0

12.0

     Total current assets

171.0

144.0

 

     Total current liabilities

144.0

132.0

 

 

 

 

 

 

 

Long–Term Assets

 

 

 

Long–Term Liabilities

 

 

  Land

66.6

62.1

 

  Long–term debt

239.7

168.9

  Buildings

109.5

91.5

 

  Capital lease obligationss

—

—

  Equipment

119.1

99.6

 

Total Debt

239.7

168.9

  Less accumulated

  depreciation

(56.1)

(52.5)

 

Deferred taxes

22.8

22.2

Net property, plant, and equipment

239.1

200.7

 

Other long–term liabilities

—

—

Goodwill

60.0

—

 

Total long–term liabilities

262.5

191.1

Other long–term assets

63.0

42.0

 

Total liabilities

406.5

323.1

     Total long–term assets

362.1

242.7

 

Stockholders’ Equity

126.6

63.6

 

 

 

 

 

 

 

Total Assets

533.1

386.7

 

Total liabilities and Stockholders’ Equity

533.1

386.7

 


6)


What is Luther’s net working capital in 2005?


A)


$12 million


B)


$27 million


C)


$39 million


D)


$63.6 million


 


7)


If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then Luther’s Market–to–book ratio would be closest to:


A)


0.39


B)


0.76


C)


1.29


D)


2.57


 


 


8)


When using the book value of equity, the debt to equity ratio for Luther in 2006 is closest to:


A)


2.21


B)


2.29


C)


2.98


D)


3.03


 


 


9)


If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then using the market value of equity, the debt to equity ratio for Luther in 2006 is closest to:


A)


1.71


B)


1.78


C)


2.31


D)


2.35


10)


If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then what is Luther’s Enterprise Value?


A)


–$63.3 million


B)


$353.1 million


C)


$389.7 million


D)


$516.9 million


 


 


11)


Luther’s current ratio for 2006 is closest to:


A)


0.84


B)


0.87


C)


1.15


D)


1.19


 


 


 


15)


If on December 31, 2005  Luther has 8 million shares outstanding trading at $15 per share., then what is Luther’s enterprise value?


 

2.3 The Income Statement


1)


Which of the following statements regarding the income statement is incorrect?


A)


The income statement shows the earnings and expenses at a given point in time.


B)


The income statement shows the flow of earnings and expenses generated by the firm between two dates.


C)


The last or “bottom” line of the income statement shows the firm’s net income.


D)


The first line of an income statement lists the revenues from the sales of products or services.


 


2)


Gross profit is calculated as


A)


Total sales – cost of sales – selling, general and administrative expenses – depreciation and amortization


B)


Total sales – cost of sales – selling, general and administrative expenses


C)


Total sales – cost of sales


D)


None of the above


 


3)


Which of the following is not an operating expense?


A)


Interest expense


B)


Depreciation and amortization


C)


Selling, general and administrative expenses


D)


Research and development


 


 


Use the table for the question(s) below.

 

Consider the following income statement and other information:

 

Luther Corporation

Consolidated Income Statement

Year ended December 31 (in $ millions)

 

2006

2005

Total sales

610.1

578.3

Cost of sales

(500.2)

(481.9)

Gross profit

109.9

96.4

Selling, general, and

administrative expenses

(40.5)

(39.0)

Research and development

(24.6)

(22.8)

Depreciation and amortization

(3.6)

(3.3)

Operating income

41.2

31.3

Other income

—

—

Earnings before interest and taxes (EBIT)

41.2

31.3

Interest income (expense)

(25.1)

(15.8)

Pretax income

16.1

15.5

Taxes

(5.5)

(5.3)

Net income

10.6

10.2

 

 

 

Price per share

$16

$15

Shares outstanding (millions)

10.2

8.0

Stock options outstanding (millions)

0.3

0.2

 

 

 

Stockholders’ Equity

126.6

63.6

Total Liabilities and Stockholders’ Equity

533.1

386.7

 


4)


For the year ending December 31, 2006 Luther’s earnings per share are closest to:


A)


$1.01


B)


$1.04


C)


$1.58


D)


$4.04  


 


 


6)


Luther’s Operating Margin for the year ending December 31, 2005 is closest to:


A)


1.8%


B)


2.7%


C)


5.4%


D)


16.7%


 


7)


Luther’s Net Profit Margin for the year ending December 31, 2005 is closest to:


A)


1.8%


B)


2.7%


C)


5.4%


D)


16.7%


 


8)


Luther’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for the year ending December 31, 2006 is closest to:


A)


19.7 million


B)


37.6 million


C)


41.2 million


D)


44.8 million


 


 


9)


Luther’s return on equity (ROE) for the year ending December 31, 2006 is closest to:


A)


2.0%


B)


6.5%


C)


8.4%


D)


12.7%


 


 


10)


Luther’s return on assets (ROA) for the year ending December 31, 2006 is closest to:


A)


2.0%


B)


6.5%


C)


8.4%


D)


12.7%


11)


Luther’s price – earnings ration (P/E) for the year ending December 31, 2006 is closest to:


A)


7.9


B)


10.1


C)


15.4


D)


16.0


 


 


2.4 The Statement of Cash Flows


1)


Which of the following is not a section on the cash flow statement?


A)


Income generating activities


B)


Investing activities


C)


Operating activities


D)


Financing activities


3)


Which of the following is not a reason why cash flow may not equal net income?


A)


Amortization is added in when calculating net income.


B)


Changes in inventory will change cash flows but not income.


C)


Capital expenditures are not recorded on the income statement.


D)


Depreciation is deducted when calculating net income.  


 


 


 


 

Use the tables for the question(s) below.

 

Consider the following financial information:

 

Luther Corporation

Consolidated Balance Sheet

December 31, 2006 and 2005 (in $ millions)

Assets

2006

2005

 

Liabilities and Stockholders’ Equity

2006

2005

Current Assets

 

 

 

Current Liabilities

 

 

Cash

63.6

58.5

 

Accounts payable

87.6

73.5

Accounts receivable

55.5

39.6

 

Notes payable /

short–term debt

10.5

9.6

Inventories

45.9

42.9

 

Current maturities of long–term debt

39.9

36.9

Other current assets

6.0

3.0

 

Other current liabilities

6.0

12.0

     Total current assets

171.0

144.0

 

     Total current liabilities

144.0

132.0

 

 

 

 

 

 

 

Long–Term Assets

 

 

 

Long–Term Liabilities

 

 

  Land

66.6

62.1

 

  Long–term debt

239.7

168.9

  Buildings

109.5

91.5

 

  Capital lease obligationss

—

—

  Equipment

119.1

99.6

 

Total Debt

239.7

168.9

  Less accumulated

  depreciation

(56.1)

(52.5)

 

Deferred taxes

22.8

22.2

Net property, plant, and equipment

239.1

200.7

 

Other long–term liabilities

—

—

Goodwill

60.0

—

 

Total long–term liabilities

262.5

 

Other long–term assets

63.0

42.0

 

Total liabilities

406.5

323.1

     Total long–term assets

362.1

242.7

 

Stockholders’ Equity

126.6

63.6

 

 

 

 

 

 

 

Total Assets

533.1

386.7

 

Total liabilities and Stockholders’ Equity

533.1

386.7

 


 

Luther Corporation

Consolidated Income Statement

Year ended December 31 (in $ millions)

 

2006

2005

Total sales

610.1

578.3

Cost of sales

(500.2)

(481.9)

Gross profit

109.9

96.4

Selling, general, and

administrative expenses

(40.5)

(39.0)

Research and development

(24.6)

(22.8)

Depreciation and amortization

(3.6)

(3.3)

Operating income

41.2

31.3

Other income

—

—

Earnings before interest and taxes (EBIT)

41.2

31.3

Interest income (expense)

(25.1)

(15.8)

Pretax income

16.1

15.5

Taxes

(5.5)

(5.3)

Net income

10.6

10.2

Dividends Paid

                 5.1

5.0

Price per Share

$16

$15

Shares outstanding (millions)

10.2

8.0

Stock options outstanding (millions)

0.3

0.2

 

 

 

Stockholders’ Equity

126.6

63.6

Total Liabilities and Stockholders’ Equity

533.1

386.7

 


6)


For the year ending December 31, 2006 Luther’s cash flow from operating activities is ? 


 

2.6 Accounting Manipulation


1)


In response to corporate scandals such as Enron and WorldCom, in 2002 congress passed a law that requires, among other things, that CEOs and CFOs certify the accuracy and appropriateness of their firm’s financial statements and increases he penalties against them if the financial statements later prove to be fraudulent.  The name of this act is?


A)


The Glass–Steagall Act


B)


The Sarbanes–Oxley Act


C)


The Accuracy in Accounting Act


D)


The McCain–Feingold Act