An investor is considering purchasing one of the following three stocks. Stock X has a market capitalization of $8 billion, pays a relatively high dividend with little increase in earnings, and has a P/E ratio of 10. Stock Y has a market capitalization of $64 billion but does not currently pay a dividend. Stock Y has a P/E ratio of 39. Stock Z, a housing industry company, has a market capitalization of $802 million and a P/E of 19. a. Classify these stocks according to their market capitalizations. b. Which of the three would you classify as a growth stock? Why? c. Which stock would be most appropriate for an aggressive investor? d. Which stock would be most appropriate for someone seeking a combination o

Problem 9-5. net present value and taxes [lo 1, 2] penguin productions is evaluating a film project. the president of penguin estimates that the film will cost $20,000,000 to produce. in its first year, the film is expected to generate $16,500,000 in net revenue, after which the film will be released to video. video is expected to generate $10,000,000 in net revenue in its first year, $2,500,000 in its second year, and $1,000,000 in its third year. for tax purposes, amortization of the cost of the film will be $12,000,000 in year 1 and $8,000,000 in year 2. the company’s tax rate is 35 percent, and the company requires a 12 percent rate of return on its films. required what is the net present value of the film project? to simplify, assume that all outlays to produce the film occur at time 0. should the company produce the film?

Betty contracted with scooby’s skate store to deliver a pair of skates to jake for his birthday. scooby’s owner was going on a trip and delegated the delivery of the skates to brian. brian failed to make delivery.can jake sue brian for breach of contract, as he was not a party to the original contract? explain your answer. brian was not a party to the original contract. why would a court hold him responsible for failing to make delivery? if you do not think a court would hold him responsible, explain your answer. can jake sue scooby’s skates for breach of contract? explain your answer.

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