27. Consider the following financial statement information for the Rivers Corporation: Calculate the operating and cash cycles.( Use 365 days a year. Do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.)
28. The nominal rate of return on a bond is 7.28 percent while the real rate is 3.09 percent. What is the rate of inflation? 29. Unique Stores common stock pays a constant annual dividend of $ 1.75 a share. What is the value of this stock at a discount rate of 13.25 percent? 30. How much are you willing to pay for one share of stock if the company just paid an annual dividend of $ 1.03, the dividends increase by 3 percent annually, and you require a rate of return of 15 percent? 31. The relationship between nominal rates, real rates, and inflation is known as the: term structure of interest rates. 32. Titan Mining Corporation has 9.5 million shares of common stock outstanding and 390,000 5 percent semiannual bonds outstanding, par value $ 1,000 each. The common stock currently sells for $ 43 per share and has a beta of 1.25, and the bonds have 15 years to maturity and sell for 114 percent of par. The market risk premium is 8.3 percent, T-bills are yielding 4 percent, and the 33. Filer Manufacturing has 8.9 million shares of common stock outstanding. The current share price is $ 59, and the book value per share is $ 4. The company also has two bond issues outstanding. The first bond issue has a face value of $ 71.2 million and a coupon rate of 7.6 percent 34. When estimating the cost of equity using the DDM, which one of these is most apt to add error to this estimate? 35. When computing WACC, you should use the: 36. The cost of preferred stock: 37. The difference between the present value of an investment’ s future cash flows and its initial cost is the: 38. Foamsoft sells customized boat shoes. Currently, it sells 16,850 pairs of shoes annually at an average price of $ 79 a pair. It is considering adding a lower-priced line of shoes which sell for $ 49 39. The net present value method of capital budgeting analysis does all of the following except: 40. Graham and Harvey( 2001) found that _____ were the two most popular capital budgeting methods.