module 3 discussion DQ1 If employee-investors are unsophisticated and unlikely to be materially…

module 3 discussion
DQ1 If employee-investors are unsophisticated and unlikely
to be materially influenced by educational efforts, the best way to improve the
welfare of employee-investors is pension design. Discuss.
DQ2 Please watch the following video and discuss.
Link:http://www.ted.com/talks/shlomo_benartzi_saving_more_tomorrow
DQ3 In housing markets, there is a positive correlation
between prices and trading volume. When there is a housing boom, many houses
sell at, or even above, the prices asked by sellers. In times of bust, homes
sit on the market for a long time with asking prices that exceed the prices
that can reasonably be expected. How can this be explained?

It is much more stable than market value, which depends on temporary fashions.

How would you respond to the following comments?

a. “Efficient market, my eye! I know lots of investors who do crazy things.”

b. “Efficient market? Balderdash! I know at least a dozen people who have made a bundle in the stock market.”

c. “The trouble with the efficient-market theory is that it ignores investors’ psychology.”

d. “Despite all the limitations, the best guide to a company’s value is its written-down book value. It is much more stable than market value, which depends on temporary fashions.”

Discuss the main methods used to measure financial literacy in the academic literature and describe…

Discuss the main methods used to measure financial literacy in the academic literature and describe which method is most appropriate.

Some scientists in the physical sciences (such as physics and chemistry) argue that ….

Some scientists in the physical sciences (such as physics and chemistry) argue that . hypothetical constructs are not scientific because they cannot be observed directly. Do you agree or disagree with this position? Why?

 

Give your assessment of how the terrorist attacks of 9/11affected the marketing environment in gener

Give your assessment of how the terrorist attacks of 9/11affected the marketing environment in general and consumer behaviorspecifically. How do you think this event will affect the marketingenvironment and consumer behavior over the next 12 to 24months? Attached

how will the validity of the test be affected if clumping occurs on both smears of the known…

how will the validity of the test be affected if clumping occurs on both smears of the known coagula… Show more how will the validity of the test be affected if clumping occurs on both smears of the known coagulase-postitive organism • Show less

A particular industry was initially segmented evenly among 20 firms (Phase 1). Five years later, the

A particular industry was initially segmented evenly among 20 firms (Phase 1). Five years later, the industry was still evenly segmented among competing firms, but there were now only 10 firms (Phase 2). Eventually 6 firms emerged with equal market share of the industry, but a move toward deregulation has prompted two of the firms to merge. What is the Herfindahl-Hirschman Index (HHI) for each of the three phases? Will the merger cause the industry to be considered Ac€A?highly concentratedAc€???

1. Explain the difference between rejecting and failing to reject the null hypothesis. In which…

1. Explain the difference between rejecting and failing to reject the null hypothesis. In which case does a researcher conclude that the independent variable has an effect on the dependent variable?

2. Distinguish between a Type I and a Type II error.

 

The villa costs $500,000 today, and housing prices in Italy are expected to increase by 6% per year

The villa costs $500,000 today, and housing prices in Italy are expected to increase by 6% per year

Financial HW need Help!!! 1 answer below »

Volunteer Fabricators, Inc. (VF) currently has zero debt. It is a zero growth

company, and it has the data shown below. Now the company is considering using

some debt, moving to the market value capital structure indicated below. The

money raised would be used to repurchase stock. It is estimated that the increase

in risk resulting from the additional leverage would cause the required rate of

return on equity to rise somewhat, as indicated below.

EBIT = $80,000 New Debt/Value = 20%

Growth = 0% New Equity/Value = 80%

Orig cost of equity, rs = 10.0% No. of shares = 10,000

New cost of equity = rs = 11.0% Price per share = $48.00

Tax rate = 40% Interest rate = rd = 7.0%

Part I:

If this plan were carried out, what would be VF's new WACC and its new value of

operations?

Part II:

Now assume that VF is considering changing from its original zero debt capital

structure to a new capital structure with even more debt. This results in changes in

the cost of debt and equity, and thus to a new WACC and a new value of

operations. Assume VF raises the amount of new debt indicated below and uses

the funds to purchase and hold T-bills until it makes the stock repurchase. What is

the stock price per share immediately after issuing the debt but prior to the

repurchase?

Debt/Value = 40% Value of new debt = $213,333

Equity/Value= 60% New WACC = 9.0%

Part III:

Based on the data in the previous two parts, what would the stock price be if VF

issued the new debt and immediately used the proceeds to repurchase stock?