Preferred Stock Valuation

Ezzell Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 9%, and its par value is $100.

What is the stock's value? Round your answer to two decimal places.

Suppose interest rates rise and pull the preferred stock's yield up to 11%. What would be its new market value? Round your answer to two decimal places.

Case 1 Houston Dialysis Center (Cost Allocation Concepts) Houston Dialysis Center is a department… 1 answer below »

Case 1
Houston Dialysis Center
(Cost Allocation Concepts)
Houston Dialysis Center is a department of Houston General Hospital, a full-service not-for-profit acute care hospital with 325 beds. The bulk of the hospital’s facilities are devoted to inpatient care and emergency services. However, a 100,000 square-foot section of the hospital complex is devoted to outpatient services. Currently, this space has two primary uses. About 80 percent of the space is used by the Outpatient Clinic, which handles all routine outpatient services offered by the hospital. The remaining 20 percent is used by the Dialysis Center.

The Dialysis Center performs hemodialysis and peritoneal dialysis, which are alternative processes for removing wastes and excess water from the blood for patients with end-stage renal (kidney) disease. In hemodialysis, blood is pumped from the patient’s arm through a shunt into a dialysis machine, which uses a cleansing solution and an artificial membrane to perform the functions of a healthy kidney. Then, the cleansed blood is pumped back into the patient through a second shunt.

In peritoneal dialysis, the cleansing solution is inserted directly into the abdominal cavity through a catheter. The body naturally cleanses the blood through the peritoneum—a thin membrane that lines the abdominal cavity. In general, hemodialysis patients require three dialyses a week, with each treatment lasting about four hours. Patients who use peritoneal dialysis change their own cleansing solutions at home, typically about six times per day. This procedure can be done manually when active or automatically by machine when sleeping. However, the patient’s overall condition, as well as the positioning of the catheter, must be monitored regularly at the Dialysis Center.

The hospital allocates facilities costs (which primarily consist of building depreciation and interest on long-term debt) on the basis of square footage. Currently, the facilities cost allocation rate is $15 per square foot, so the facilities cost allocation is 20,000 × $15 = $300,000 for the Dialysis Center and 80,000 × $15 = $1,200,000 for the Outpatient Clinic.
All other overhead costs, such as administration, finance, maintenance, and housekeeping, are lumped together and called “general overhead.” These costs are allocated on the basis of 10 percent of the revenues of each patient service department. The current allocation of general overhead is $270,000 for the Dialysis Center and $1,600,000 for the Outpatient Clinic, which results in total overhead allocations of $570,000 for the Dialysis Center and $2,800,000 for the Outpatient Clinic.

Recent growth in volume of the Outpatient Clinic has created a need for 25 percent more space than currently assigned. Because the Outpatient Clinic is much larger than the Dialysis Center, and because its patients need frequent access to other departments within the hospital, the decision was made to keep the Outpatient Clinic in its current location and to move the Dialysis Center to another location to free up space. Such a move would now give the Outpatient Clinic 100,000 square feet, a 25 percent increase.
After attempting to find new space for the Dialysis Center within the hospital complex, it was soon determined that a new 20,000 square foot building must be built. This building will be situated two blocks away from the hospital complex, in a location that is much more convenient for dialysis patients (and Center employees) because of ease of parking. The new space, which can be more efficiently utilized than the old space, allows for a substantial increase in patient volume, although it is unclear whether or not the move will result in additional dialysis patients.

The new dialysis facility is expected to cost $3,000,000. Additionally, furniture and other fixtures, along with relocation expenses of current equipment, would cost $1,000,000, for a total cost of $4,000,000. The funds needed for the new facility will be obtained from a 20-year loan at local bank. The loan (including interest) will be paid off over 20 years at a rate of $400,000 per year. Because the specific financing details are known, it is possible to estimate the actual annual facilities costs for the new Dialysis Center, something that is not possible for units located within the hospital complex.

Table 1 contains the projected profit and loss (P&L) statement for the Dialysis Center before adjusting for the move. The hospital’s department heads receive annual bonuses on the basis of each department’s contribution to the bottom line (profit). In the past, only direct costs were considered, but the hospital’s chief executive officer (CEO) has decided that bonuses would now be based on full (total) costs. Obviously, the new approach to awarding bonuses, coupled with the potential for increases in indirect cost allocation, is of great concern to Linda Rider, the director of the Dialysis Center. Under the current allocation of indirect costs, Linda would have a reasonable chance at an end-of-year bonus, as the forecast puts the Dialysis Center in the black. However, any increase in the indirect cost allocation would likely put her “out of the money.”

At the next department heads’ meeting, Linda expressed her concern about the impact of any allocation changes on the Dialysis Center’s profitability, so the hospital’s CEO asked the chief financial officer (CFO), Roger Hedgecock, to look into the matter. In essence, the CEO said that the final allocation is up to Roger but that any allocation changes must be made within outpatient services. In other words, any change in cost allocation to the Dialysis Center must be offset by an equal, but opposite, change in the allocation to the Outpatient Clinic.
To get started, Roger created Table 2. In creating the table, Roger assumed that the new Dialysis Center would have the same number of stations as the old one, would serve the same number of patients, and would have the same reimbursement rates. Also, operating expenses would differ only slightly from the current situation because the same personnel and equipment would be used. Thus, for all practical purposes, the revenues and direct costs of the Dialysis Center would be unaffected by the move.

The data in Table 2 for the expanded Outpatient Clinic are based on the assumption that the expansion would allow volume to increase by 25 percent and that both revenues and direct costs would increase by a like amount. Furthermore, to keep the analysis manageable, the assumption was made that the overall hospital allocation rates for both facilities costs and general overhead would not materially change because of the expansion.

Roger knew that his “trial balloon” allocation, which is shown in Table 2 in the columns labeled “Initial Allocation,” would create some controversy. In the past, facilities costs were aggregated, so all departments were charged a cost based on the average embedded (historical) cost regardless of the actual age (or value) of the space occupied. Thus, a basement room with no windows was allocated the same facilities costs (per square foot) as was the fifth floor executive suite. Because many department heads thought this approach to be unfair, Roger wanted to begin allocating facilities overhead on a true cost basis. Thus, in his initial allocation, Roger used actual facilities costs ($400,000 per year) as the basis for the allocation to the Dialysis Center.

Needless to say, Linda’s response to the initial allocation was less than enthusiastic, but before Roger was able to address Linda’s concerns, he suddenly left the hospital to take a new position in another city. The task of completing the allocation study was given to you, Houston General’s current administrative resident. You believe that any cost allocation system should be perceived as being “fair,” but you also realize that in practice cost allocation is very complex and somewhat arbitrary. Some department heads argue that the best approach to overhead allocations is the “Marxist approach,” by which allocations are based on each patient service department’s ability to cover overhead costs, but this approach has its own disadvantages.

Considering all the relevant issues, you must develop and justify a new facilities cost allocation scheme for outpatient services. Be prepared to justify your recommendations at the next department heads’ meeting.

1. Is it “fair” for the Dialysis Center to suffer in profitability, and hence
for Linda to possibly lose her bonus, just because the Outpatient Clinic
needs additional space?

2. In the past, the medical center has aggregated all facilities costs, and
then allocated the total amount on the basis of square footage. The proposed
allocation for the Dialysis Center, on the other hand, requires it to bear
the true facilities costs of its new space. What are the advantages and
disadvantages of the new methodology? Do you support the new allocation

4. Do you think the new Dialysis Center will be able to attract more patients?
What impact would additional volume have on the facilities allocation

6. When all issues related to the decision are considered, what is your
recommendation regarding the handling of the pharmacy revenues and the final
allocation amounts? Table 1 Houston General Hospital Dialysis Center Forecasted P&L Statement Assuming Status Quo Revenues $2,100,000 Hemodialysis program 600,000 Peritoneal dialysis program Total revenues $2,700,000 Direct Expenses $1,100,000 Salaries and benefits 150,000 Supplies Utilities 80,000 Equipment lease expense 320,000 other expenses 450,000 $2 Total expenses 00,000 Net profit before indirect costs 600,000 Indirect Expenses 300,000 Facilities costs 270,000 General overhead Total overhead costs 570,000 Net profit 30,000

Case Study #3: Technology & Product Review for Application Lifecycle Management Tools

Instructions: Case Study #3: Technology & Product Review for Application Lifecycle Management Tools

Case Scenario:

As a Nofsinger consultant, you have been tasked with researching and recommending an Application Lifecycle Management (ALM) tool. Your deliverable for this task will be used to help obtain buy-in from the company’s program managers for increased security investments. 

An Application Lifecycle Management tool (product) is used to help manage and protect digital assets which are part of or contribute to the management of software applications (especially source code and design documents) throughout the Software & Systems Development Life Cycle (SDLC). The digital assets for each software application must be protected from initiation of a development or acquisition project through to disposal of equipment at the end of its useful lifespan. 

Multiple Sifers-Grayson managers have responsibility for making sure that Sifers-Grayson products are developed and delivered on-time and in compliance with the contractual requirements for functionality (“quality”). For the current set of customers this means that Sifers-Grayson must implement security focused configuration management (see NIST SP 800-128). Configuration management is a first-line defense against attacks intended to compromise the security and integrity of software applications. This business process is part of a larger, more complex process known as application lifecycle management. 

Note: Note: Application Development Lifecycle Management (ADLM) is related to ALM but does not encompass the entire SDLC. If you choose to review an ADLM tool, make sure that you address the limitations, i.e. does not cover all phases of the ALM. State what impact these limitations may have upon application security for the entire SDLC.

During initial interviews, the engineering managers and program managers provided the following information to your team.

1.      Software and Systems Development are the lifeblood of the client company, Sifers-Grayson. From robots to drones to industrial control systems for advanced manufacturing, every product or system sold by the company depends upon software. Some system functions depend upon tiny control programs that capture data from a sensor or command an actuator to move. Other system functions depend upon sophisticated software algorithms to receive and analyze data to make sense out of the surrounding environment.

2.      Sifers-Grayson’s engineers are responsible for writing and testing this software. But, they’ve never had to worry about cybersecurity … especially not internal security over software development activities in their own facilities.  

3.      The engineers feel ownership over their files and folders of source code. 

4.      There are occasional pranks between engineers working in the labs but software is “sacred” and “off limits.” 

5.      The engineers believe that “No one would dare mess with a file containing source code for an operational system or a system that has moved into the integration and test phase of the software lifecycle.”

The Nofsinger Engagement Leader (your boss), has provided the following advance notice information as part of your background briefing for this task.

1.      Within the next 60 days, a Nofsinger Red Team will conduct penetration tests for the enterprise.

2.      The Red Team test plan includes attacks designed to demonstrate to the engineers and managers (through penetration testing) that there is a need to protect digital assets, especially software designs, source code, and related artifacts from both insider and external threats.


1.      Review the weekly readings. 

2.      Using Google or another search engine, identify an Application Life Cycle Management product which could meet the needs of Sifers-Grayson. Then, research your chosen product using the vendor’s website and product information brochures. 

3.      Find three or more additional sources which provide reviews for (a) your chosen product or (b) information about Application Life Cycle Management.


Write a 3 page summary of your research. At a minimum, your summary must include the following:

1.      An introduction or overview for the security technology category (Application Lifecycle Management)

2.      A review of the features, capabilities, and deficiencies for your selected vendor and product  

3.      Discussion of how the selected product could be used by Sifers-Grayson to support its cybersecurity objectives by reducing risk, increasing resistance to threats/attacks, decreasing vulnerabilities, etc.

4.      A closing section in which you restate your recommendation for a product (include the three most important benefits).

As you write your review, make sure that you address security issues using standard cybersecurity terminology (e.g. protection, detection, prevention, “governance,” confidentiality, integrity, availability, nonrepudiation, assurance, etc.).  See the ISACA glossary  if you need a refresher on acceptable terms and definitions. 

Formatting Instructions

Use standard APA formatting for the MS Word document that you submit to your assignment folder. Formatting requirements and examples are found under Course Resources > APA Resources.

Submit For Grading 

Submit your case study in MS Word format (.docx or .doc file) using the Case Study #3 Assignment in your assignment folder. (Attach the file.)

Additional Information

1.      There is no penalty for writing more than 3 pages but, clarity and conciseness are valued. If your essay is shorter than 3 pages, you may not have sufficient content to meet the assignment requirements (see the rubric).

2.      You are expected to write grammatically correct English in every assignment that you submit for grading. Do not turn in any work without (a) using spell check, (b) using grammar check, (c) verifying that your punctuation is correct and (d) reviewing your work for correct word usage and correctly structured sentences and paragraphs.  

3.      You are expected to credit your sources using in-text citations and reference list entries. Both your citations and your reference list entries must comply with APA 6th edition Style requirements. Failure to credit your sources will result in penalties as provided for under the university’s Academic Integrity policy.

Number of Pages: 3 Pages

Academic Level: College

Paper Format: APA

1. What are the three primary ways in which scientists share their work with the scientific…

1. What are the three primary ways in which scientists share their work with the scientific community? 2. Why is peer review so important to science?


Which of the following is not true? I. Time-phased planning is typically carried out with material..

Which of the following is not true? I. Time-phased planning is typically carried out with material requirements planning (MRP) II. Rate-based planning is likely to utilize large batch sizes III. Rate-based planning is common in just-in-time (JIT) systems a. I only b. II only c. III only d. I and II only

Bannister Legal Services generated $2.0 million in sales during 2007, and its year-end total assets…

Sales Increase

Bannister Legal Services generated $2.0 million in sales during 2007, and its year-end total assets were $1.5 million. Also, at year-end 2007, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accruals.

Looking ahead to 2008, the company estimates that its assets must increase by 75 cents for every $1 increase in sales. Bannister’s profit margin is 5%, and its payout ratio is 60%. How large a sales increase can the company achieve without having to raise funds externally? That is, what is its self-supporting growth rate?

What are RVU weighted visits? Why is it necessary to weigh visits by their intensity rates?

What are RVU weighted visits? Why is it necessary to weigh visits by their intensity rates?

200 words minimum apa in text citation with reference

question d

which sketch below shows the sampling distribution for the rejection region z>1.645?

Suppose Japanese yen money market annual rate is .60% and U.S. money market has an annual rate of… 1 answer below »

Suppose Japanese yen money market annual rate is .60% and U.S. money market has an annual rate of 4.50%.

1). The predictions on the spot rate in 6 months made by financial analysts X and Y are A??Y116/$ and A??Y114/$ respectively. If the spot rate today is A??Y115/$, which prediction do you think is more reasonable, why?

2). What should be the spot rate in 6 months based on parity condition?

3). If the forward rate in 6 months is A??Y113/$, will there be arbitrage opportunity, why? If yes then which investment strategy will offer you profit (hint: borrow or lend, dollar or yen, buy or sell forward)?

4). Suppose you adapt the correct arbitrage strategy with the starting investment value of $43,478.2609 or A??Y5,000,000, what will be the net proceeds? Please show each step clearly.

5). If financial analyst X believes his prediction is right, then what he would do to explore the market profit opportunity?

6) What is the key difference between the strategy adopted by analyst X in part 5 and the strategy in part 4?

Differentiate case studies and single-participant experiments.

Differentiate case studies and single-participant experiments.