The History and Impact of Planned Parenthood - Free Essay Example

Sample details Pages: 3 Words: 928 Downloads: 5 Date added: 2019/07/02 Category Society Essay Level High school Tags: Planned Parenthood Essay Did you like this example? United States Senator and Womens Rights Activist, Kamala Harris once said, No woman should be told she cant make decisions about her own body. When womens rights are under attack, we fight back. For over one hundred years, womens health has been a controversial topic. In the past, powerful men have held the authority to decide what they deem appropriate for women in regard to their health. Don’t waste time! Our writers will create an original "The History and Impact of Planned Parenthood" essay for you Create order Planned Parenthood Federation of America (PPFA), an organization founded by women for women in 1916, has a goal, that women should have the information and care they need to live strong, healthy lives and fulfill their dreams (The History and Impact of Planned Parenthood.). Today, that goal to provide such care has helped millions of men, women, and children who could not otherwise afford it. With over 600 health clinics, Planned Parenthood provides care throughout the United States and helps many people around the world (The History and Impact of Planned Parenthood.). In fact, according to the PPFA, the organization has provided more than 4.67 million sexual and reproductive health services globally and 2.84 million of these services occurred within the United States. Of the 2.84 million, 79% were received by patients at or below 150% of the poverty line (Planned Parenthood Federation of America.). However, some forms of treatment have caused backlash. In the 1970s, abortion rights expanded, and Planned Parenthood was one of the organizations advocating for to legally establish that right for women. This turned the continued funding of Planned Parenthood into a controversial topic that remains a topic of discussion today. There are people in the United States who would like to see Planned Parenthood disbanded by the federal government and eliminate the funding of this health organization. However, Planned Parenthood does many great things for our country and closing its doors would do more harm than good. Defunding the PPFA would increase taxes and decrease accessibility to health care services and health education for countless individuals and would severely impact areas where limited opportunities exist for those services. There is no question that abortion is a topic which will always be controversial. Any situation dealing with life and death is bound to stir up many mixed emotions, strong feelings, and varied beliefs. Many people who oppose Planned Parenthood jump straight to the abortion issue upon hearing the organizations name. However, this procedure is just one of hundreds of health care services offered by Planned Parenthood. According to the Planned Parenthood 2016-2017 annual report, only 3% of all medical services [they provided] were abortion services. The main services delivered were STI testing and treatment (47%) and contraception (28%) (PPFA, 2017 n.d.). Defunding an entire program, based on a disagreement with one procedure, seems extreme and uncalled for. Planned Parenthood also provides services for contraception, STD testing, fertility testing, and pelvic exams for both men and women, along with general health care. Planned Parenthood is typically considered to be a female-specific sexual/reproductive/family planning service system (Lawrence HC, Ness DL.), however, PPFA offers a myriad of male reproductive/sexual health care options, including but not limited to treating erectile dysfunction, jock itch, infertility, premature ejaculation, prostate cancer, vasectomy procedural services, as well as TCa screening and referral services (PPFA, n.d.). PPFA also provides care for existing families, giving vaccinations for children and providing family education and support through many different situations that may occur (PPFA, n.d.). Many of clinics are placed in areas where there is no other option for these health care needs. In addition, Planned Parenthood provides these services in a manner that makes their patients feel educated, safe, and supported. This organization is not meant to be a burden on the public, but a beneficial service to those who may not have access or cannot afford health care, otherwise. According to Lawrence and Ness, services provided range from annual well-woman examinations to vaccinations. In a single year, Planned Parenthood health centers conduct more than 270,000 Pap tests and more than 360,000 breast examinations. These two tests alone are crucial to womens health and can help detect cancer at an early stage, thus saving lives. Another concern of the opposition is the thought of raising taxes to pay for someone elses health care. However, according to the Congretional Budgeting Office, barring Planned Parenthood health centers from being reimbursed through Medicaid would result in a net cost of $130 million to taxpayers over 10 years, due to an increase in unintended pregnancies without the high-quality contraceptive care Planned Parenthood provides. In fact, Planned Parenthood estimates that their health centers prevent 579,000 unintended pregnancies each year. This number includes the thousands of people receiving the distribution of oral contraceptives, IUDs, condoms, etc. Planned Parenthood is a necessary organization for our country. One must think outside their own beliefs on abortion and realize, that although the organization provides the option to terminate a pregnancy, that is not close to all they do. The numerous other services that they provide and the ability to provide them to men and women at a cost that is commensurate to their income are of vital importance. Giving everyone the opportunity to receive the education and support they need for sexual, reproductive and family help is priceless. If we defund such an important organization, it will affect over 2.4 million people in our country alone (PPFA, n.d. 2017.). It is important to remember the number of lives the organization has impacted and the number of people it has helped, as we often tend to focus primarily on the negative. Planned Parenthood is if critical importance to millions and without it, many peoples health care would be lost.

Sexual Assault And Consent Within The State Of South Carolina

In the state of South Carolina there are a number of laws regarding sexual assault and consent. Now sexual battery in the state of South Carolina includes vaginal, anal, and oral sexual intercourse as well as any intrusion such as touching. Furthermore, the legal age of consent in the state is 16. Unfortunately, if someone is 14 years of age, they can consent to have sex with someone who is 18 years of age or younger. Yet, submitting to coercion someone, especially if it’s of an aggravated nature is not considered consent. Therefore, a person could receive up to 30 years in prison for making someone have sex with them without them given consent. In the state of South Carolina the laws for rape of a minor in the first degree is when a person has sexual intercourse with a person under the age of 11 and it carries a sentence of up to 30 years in prison according to South Carolina  § 16-3-655(cga.ct.gov. n.d.). Now second- degree criminal sexual conduct with a minor between the age of 11 and 14 carries up to 20 years in prison. Furthermore, if a person commits an adult rape in the state they can receive up to 20 years if it was determined that they used aggravated coercion and 30 years if they forced a victim to submit to sexual battery in the context of kidnapping, forcible confinement or extortion. Therefore, in both situations the individual involved could receive anywhere between 20 to 30 years for rape. According to my state laws the age of consent is 16 years of age, butShow MoreRelatedThe Sexual Rape Of The United States Through Legislation Regarding Marital Rape1484 Words   |  6 PagesSexism in the United States Through Legislation Regarding Marital Rape Recently, the general topic of rape has been widely discussed through various media platforms. Rape is the act of sexual assault of another person without their consent. With this in mind a prevailing notion is that marital rape does not occur, however, numerous cases have proven otherwise. Initially, husbands were not commonly put on trial for spousal rape. Each state now identifies rape within a marriage as an illegal act,Read MoreRape: A Crime1196 Words   |  5 PagesThe definition of rape is: The unlawful compelling of a person through physical force or duress to have sexual intercourse. Basically, rape is a forceful act in trying any way possible to make someone have sex with them. This crime is still being committed to this day and is not viewed as big of an issue as it truly is. 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Until recently, little was written about the need for TJ within the military justice system or within the Uniform Code of Military Justice (UCMJ). Indeed, literature is sparse beyond the call for TJ in cases involving PTSD. For example, of the few law articles written suggesting reform within the UCMJ is one article calling for TJ involving a soldier who suffered from PTSD. The soldierRead MoreTherapeutic Jurisprudence And The Uniform Code Of Military Justice7095 Words   |  29 Pagesand tort law. But, nowhere has there been a comprehensive plea for therapeutic jurisprudence within the military. Until recently, little was written about the need for TJ within the military justice system or within the Uniform Code of Military Justice (UCMJ). Indeed, literature is sparse beyond the call for TJ in cases involving PTSD. For example, of the few law articles written suggesting reform within the UCMJ is one article calling for TJ involving a soldier who suffered from PTSD. The soldier

Analysis of Martin Luther King Jr.´s Letter From...

In the past there were many protest operated to fight for something injust or needed awareness for others to know the wrong doings that are present in our country. People fought for their rights and against the prejudice that they have to face, accomplish justice that every single one of them are fighting for. Dr. Martin Luther King, a leader of the protest against prejudice was able to pursue the rights for African American people. However eight of his fellow clergymen criticized his procedure to protest, but they still supported him. In the Letter from Birmingham Jail, King wanted to encourage others to rebel against the wrong, even if it is not wise it is right, he was optimistic and yet disappointed. In order for him to convey his tone and purpose he reaches out to people by using allusion, analogy, and ethos. King employs allusion, to appeal to his audience and convince them that what he is doing is right and necessary. In particular he refers to the Bible, Was not Paul an extremist for the Christian gospel: I bear in my body the marks of the Lord Jesus. It is coherent that King is compelled to take a stand against the prejudice and racism like the way Paul carried the gospel of Lord Jesus. King relate back to Paul to convey his purpose that Paul suffer for what he believe in and so that his fellow clergymen must take sacrifices for a great cost. Furthermore King speaks about, Socrates felt that it was necessary to create a tension in the mind so thatShow MoreRelatedAnalysis of Martin Luther King Jr.s Letter from Birmingham Jail962 Words   |  4 Pagesintangible, it is still necessary. Some forms of inspiration come as passionate love while others appeal as injustice. Martin Luther King Jr.s Letter from Birmingham Jail was a response to A Call for Unity by eight white clergymen. 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Martin Luther King Jr. s, Letter from Birmingham Jail illustrates how a seemingly innocent attempt at gaining one s rights can be seen as controversial and wrong by others. King was put into jail because of the peaceful protests he led. To those who shared King s method of thought, nonviolence would have been the way to maximize the gains in society by allowingRead MoreAnalysis Of Martin Luther King Jr.s Letter From A Birmingham Jail1493 Words   |  6 Pageswould have disagreed with this assertion, and died in part to keep this idea from spreading. Socrates was sentenced to death by an Athenian court, though the punishment did not fit the crimes he was accused of. We assume that any knowingly innocent per son would have escaped this sentence if given the opportunity and support to do so, yet Socrates refused to and died soon after. 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In this pa per I will analyze and make connections between the concepts of audience, genre and rhetorical situation in connection to the fore-mentioned readings. In doingRead MoreRhetorical Analysis Of Martin Luther King Jr s Letter From Birmingham Jail1831 Words   |  8 Pageseffective when all three rhetorical appeals, Logos, Pathos, and Ethos, come together to form an indisputable argument. Dr. Martin Luther King Jr and Malcolm X are two of the most influential figures of the past few decades; similarly, their work is summarized as some of the most persuasive and controversial of all time. The audience of both of their pieces, â€Å"Letter from Birmingham Jail† and â€Å"The Ballot or the Bullet† include oppressed African Americans and the white oppressors themselves. Each man takesRead MoreRhetorical Analysis Of Martin Luther King Jr. s Letter From A Birmingham Jail873 Words   |  4 PagesAfter criticism from eight Alabama clergymen for his nonviolent demonstrations, Mar tin Luther King Jr. was compelled to enlighten them on the current issues plaguing the African American community. During his confinement in a Birmingham jail, King wrote Letter from a Birmingham Jail to address most of the clergymen s concerns about his protest. In his letter, King emphasized why his actions were not unwise or untimely and explained that now was the perfect moment to act. His studies and sermons

Oppression on Women in Margaret Atwoods the Handmaids...

Oppression on Women in Margaret Atwoods The Handmaids Tale and Marjane Satrapi’s Persepolis Persepolis, by Marjane Satrapi, is memoir of a little girl growing in Iran. She refers to a secular pre revolutionary time through contrast, the oppressive characteristics of the fundamentalist government upon women in particular. Her work is a lot similar to Margaret Atwoods, A Handmaid’s Tale, in which the protagonist Offred reflects upon her former life’s freedom, cherishing her former name and in doing so emphasizes the cloistered and enslaved life that she must now endure. Although both Margaret Atwood and Satrapi show how a totalitarian state oppresses women in different ways by taking away the freedom to think and decide for oneself, both†¦show more content†¦In Haindmaid’s Tale, women are divided into a small range of social categories, each one signified by a specific-color dress in a similar style: â€Å"[†¦] her usual Marthas dress, which is dull green, like a surgeons gown of the time before. The dress is much like mine in shape, long a nd concealing, but with a bib apron over it and without the white wings and the veil. She puts on the veil to go outside, but nobody much cares who sees the face of a Martha.†(9) Martha’s are made less by their clothes. When a woman is wearing the green â€Å"Martha’s dress† no one is interested in looking at her as a person. She is just a servant. Martha’s dress makes the woman serviceable not desirable, useful but undesirable. Pride and dignity is taken away from women in Gilead. They are isolated from their families and are tortured by their memories. They are handed a dress code depending on the role they play and are forced to abide by that. After Satrapi designs a new uniform for her school, she says, â€Å"this is how I recovered my self-esteem and my dignity. For the first time in a long time, I was happy with myself† (298). Undeniably this dress code in both the books make women no longer an individual but an object for specific use, stripping them of their identities and giving them no choice. Work Cited Atwood, Margaret. The Handmaid’s Tale. New York: Anchor books, 1998. Print. Satrapi, Marjane. Persepolis. New York: Pantheon, 2003.Show MoreRelatedEssay about Handmaids Tale vs Persepolis971 Words   |  4 PagesDavid Miller Oppression on Women in Margaret Atwoods The Handmaids Tale and Marjane Satrapi’s Persepolis Marjane Satrapi, in Persepolis writes about a memoir of a little girl growing in Iran. She refers to a secular pre-revolutionary time through contrast, the oppressive characteristics of the fundamentalist government upon women in specifics. In comparison, her work is very similar to Margaret Atwood’s, A Handmaid’s Tale, in which the central character, Offred, reflects upon her former life’s

The Big Bang Theory Short Essay Example For Students

The Big Bang Theory Short Essay The Big Bang Why is the Universe expanding? What is Cosmic Back Ground Radiation (CBR)? There are many questions asked about our Universe, which we know so little about. Scientists, in their attempt to answer these and other confrontations, have found one idea that seems to explain much of what we dont understand: The Big Bang Theory. An explosion of incomprehensible speed was the beginning of our known Universe and existence. At that time matter as small as the head of a pin inflated to become larger than the visible Universe of today in less then one millisecond. The newly born Universe cooled very quickly and continued to grow. Still, the heat was too great for normal elementary particles like protons and neutrons to be bound together. Instead, the particles were in their free form and were called quarks. These quarks and the massive amount of radiation released form the explosion made up most of the Universe in the first microsecond. Within the quarks, matter and antimatter (elem entary particles such as protons and electrons, yet with an opposite charge) was distributed in a 2:1 ratio. The matter and antimatter soon began to cancel each other out, for antimatter and matter cannot coexist in close range for more than a few seconds without annihilating each other. Because the matter had more particles then the antimatter, there was a little residue left over. It was this leftover debris that created the galaxies, the stars, the planets, and even you and me. At this point the Universe was one second old, and it began fusing lighter elements like helium. This nuclear activity only lasted a few minutes, but it is one of the reasons the Universe has an abundance of light elements. The Universe continued to grow and cool, later fusing the heavier elements and then what we see around us today. All of it began at the Big Bang. The Big Bang is a well known and believed theory of how the universe was created. It is described as a tremendous explosion that has a certain place and time. In fact, the Big Bang is considered to be the beginning of time as well as the beginning of the universe. Scientists today, dont know what happened before the Big Bang. However, they have concluded that if something had happened, it would not have effected the explosion in any way. Most have agreed that what ever there was, or wasnt before the Big Bang, has no importance and it should be left out of the scientific model of the universe. The Big Bang is therefore considered the beginning of time. There were many people who worked together to come up with the present theory of creation. Edwin Hubble, Arno Penzias, Robert Wilson and Alan Guth all contributed greatly to the formation of t he Big Bang theory. Edwin Hubble used his large telescope to see far away stars and galaxies. He knew that the elements in the stars reflected back specific colors, and you could tell what a star was made of by its color DNA. Hubble noticed that this pattern had been slightly shifted to the red side of the spectrum, otherwise called a red shift. He knew, based on the Doppler effect, that a red shift was caused by the stretched wavelengths of an object moving away from a point. If the galaxies he had observed had shifted to the red side then it meant that they were moving away from Earth. He also discovered that the galaxies were moving away from each other, as well. With these observations in mind, Hubble announced that the universe was expanding. He then came to this syllogism: If the universe is expanding, then at one point it was smaller. The result of his postulations was the Big Bang theory. Another mystery of the universe was the Cosmic Background Radiation (CBR). CBR is made up of photons throughout the universe that are floating for no apparent reason in space. Arno Penzias and Robert Wilson spent their lives trying to explain the origin of this radiation and why it is still existent today. Their discoveries led them to an idea similar to the Big Bang theory. They

Finance Final Exam Winter 2007 Solutions free essay sample

In our example there was a capital loss of $10 given that the selling price of the bond ($1,040) was less than the purchase price of the bond ($1,050). Rate of return = ($70 $10)/$1,050 = 5. 71%. 6. (Q. 2 in B) A bond with 10 years until maturity, an 8 percent coupon rate, and an 8 percent original yield to maturity increased in price to $1,107. 83 yesterday. What appears to have happened to interest rates? Coupons are paid annually. A)Rates increased by 2. 00 percent. B)Rates decreased by 2. 00 percent. C)Rates increased by 0. 72 percent. D)Rates decreased by 1. 50 percent. Answer D $1,107. 83 = $80[pic] i = 6. %, yield to maturity was 8. 0% prior to the price change. Therefore the rates have decreased by 1. 5%. 7. (Q. 3 in B) Which of the following statements is correct about a stock currently selling for $50 per share that has a 16 percent expected return and a 10 percent expected capital appreciation? A)Its expected dividend exceeds the actual dividend. B)Its expected return wil l exceed the actual return. C)It is expected to pay $3 in dividends for next year. D)It is expected to pay $8 in dividends for next year. Answer C Expected return = expected dividend yield + expected capital appreciation 16% = expected dividend yield + 10% % = expected dividend yield $50 share price ? 6% = $3 expected dividend payment 8. (Q. 4 in B) An investor receives a 15 percent total return by purchasing a stock for $40 and selling it after one year with a 10 percent capital gain. How much was received in dividend income during the year? A)$2. 00 B)$2. 20 C)$4. 00 D)$6. 00 Answer A [pic] 15% = [pic] Dividend = $2. 9. (Q. 13 in B) Because of its age, your car costs $4,000 annually in maintenance expense. You could replace it with a newer vehicle costing $8,000. Both vehicles would be expected to last four more years. If your opportunity cost is 8 percent, what would be the maximum annual maintenance expense on the newer vehicle to still justify its purchase? A)$1,250 B)$1,585 C)$2,000 D)$2,415 Answer B $8,000 = Annuity [pic] = Annuity [3. 3121] = $2,415. 39 When combined with the annuitized cost of the vehicle, any annual expense over $1,584. 61 would place the total annual expense of the new vehicle over $4,000. 10. (Q. 14 in B) The profitability index for a project costing $40,000 and returning $15,000 annually for four years at an opportunity cost of capital of 12 percent is: A)0. 139 B)0. 320 C)0. 500 D)0. 61 Answer A PV = $15,000 [pic] = $15,000 [3. 0373] = $45,560 and NPV = $45,560 $40,000 = $5,560. Profitability index = $5,560 / $40,000 = 0. 139. 11. (Q. 15 in B) What is the minimum number of years that an investment costing $500,000 must return $65,000 per year at a discount rate of 13 percent in order to be an acceptable investment? A)8. 69 years. B)14. 00 years. C)27. 51 years. D)An in finite number of years. Answer D NPV = ($65,000 / 0. 13) $500,000 = 0. 12. (Q. 16 in B) You can continue to use your less efficient machine at a cost of $8,000 annually for the next five years. Alternatively, you can purchase a more efficient machine for $12,000 plus $5,000 annual maintenance for the next five years. At a cost of capital of 15 percent, you should: A)Buy the new machine and save $388 in equivalent annual costs. B)Buy the new machine and save $600 in equivalent annual costs. C)Keep the old machine and save $388 in equivalent annual costs. D)Keep the old machine and save $580 in equivalent annual costs. Answer D The PV of total cost of the more efficient machine is $28,760. 78, which translates into an EAC of $8,579. 79, which is $579. 9 higher than the annual cost associated with the less efficient machine. 13. (Q. 17 in B) What is the approximate IRR for a project that costs $100,000 and provides annual cash inflows of $30,000 for six years? A)19. 9 percent B)30. 0 percent C)32. 3 percent D)80. 0 percent Answer A Use the following information to answer Questions 14 – 17 (Questions 9 – 12 in Type B). Jensen Industries is considering purchasing a new Numerically Controlled Drilling Press. The press costs $100,000, and belongs to a 15% CCA rate asset class (declining balance method) and the half-year rule applies. The press is estimated to have cash flow savings of $34,000 per year for 6 years and will require an immediate increase in Net Working Capital of $5,000, which will be recovered when the machine is sold at the end of year 6. Initially assume there is zero salvage value. The discount rate is 10% and the tax rate is 40%. 14. (Q. 9 in B) What is Jensen’s CCA in Year 1 and Year 2? A) $7,500; $12,750 B) $7,500; $13,875 C) $15,000; $12,750 D) $15,000; $13,875 Answer B CCA in year 1 = $100,000 x ? x 0. 15 = $7,500. CCA in Year 2 = $(100,000-7,500) x 0. 15 = $13,875. 5. (Q. 10 in B) What is the present value of Jensen’s CCA tax shield? A) $5,367 B) $11,667 C) $19,419 D) $22,909 Answer D [pic] 16. (Q. 11 in B) Should Jensen accept the project? A) Yes, because the NPV is positive, and it exceeds $10,000. B) Yes, because the NPV is positive, although it is less than $10,000. C) No, because the NPV is negative, and it is between 0 and -$10,000. D) No, because the NPV is negative, a nd it is between -$10,000 and -$100,000. Answer B NPV=-$105,000 + $34,000(1-0. 40)(PVIFA6yr,10%) + $5,000 (PVIF 6yr,10%) + $22,909 = $9,578. 69. Year |0 |1 |2 |3 |4 |5 |6 | |Savings | |34,000 |34,000 |34,000 |34,000 |34,000 |34,000 | |Tax @ 40% |   |13,600 |13,600 |13,600 |13,600 |13,600 |13,600 | |After-tax savings | |20,400 |20,400 |20,400 |20,400 |20,400 |20,400 | |Capital Investment |-100,000 | | | | | | | |Change in NWC |-5,000 |   |   |   |   |   |5,000 | |CFs Excluding CCATS |-105,000 |20,400 |20,400 |20,400 |20,400 |20,400 |25,400 | |Discounted CFs |-105,000 |18,545 |16,860 |15,327 |13,933 |12,667 |14,338 | |PV of CCATS |22,909 |   |   |   |   | | | NPV |$ 9,578. 69 |gt;0 | | | | | | 17. (Q. 12 in B) By how much will the NPV increase if Jensen is able to obtain a $10,000 salvage value at the end of Year 6? A) $1,824 B) $4,290 C) $5,645 D) $6,000 Answer B NPV increase = PV of salvage value – PV of lost CCATS due to salvage value [pic] 18. (Q. 23 in B) What happens to the NPV of a one-year project if fixed costs are increased from $400 to $600, the firm is profitable, has a 15 percent tax rate and employs a 12 percent cost of capital? A)NPV decreases by $200. 00. B)NPV decreases by $170. 00. C)NPV decreases by $151. 79. D)NPV decreases by $116. 07. Answer C |Fixed costs |+$200 | |Profit before tax |-$200 | |Taxes | -$30 | |change in cash flow= -$200 + $30 = -$170, which discounts to -$151. 79. 19. (Q. 24 in B) Fixed costs including depreciation have increased at Leverage, Inc. from $4 million to $6 million in an effort to reduce variable costs. What must the new variable-cost percentage be to leave accounting break-even at $20 million? A)60 percent B)65 percent C)70 percent D)75 percent Answer   Ã‚  C Old: [pic] = $20 million variable costs = 80%. New: [pic] = $20 million x = 30%. Therefore, variable-cost percentage must reduce from 80 percent to 70 percent to leave the accounting break-even revenues unaffected. 20. (Q. 25 in B) Approximately how much was paid to invest in a project that has an NPV break-even level of sales of $5 million, annual cash flows determined by: 0. 1 ? sales – $300,000, a six-year life, and an 8 percent discount rate? A)$416,667 B)$924,576 C)$1,016,678 D)$2,311,450 Answer B PV (cash flows) = investment [pic] (0. 1 x $5 million – $300,000) 4. 6229 ($200,000) = $924,576 21. (Q. 26 in B) What percentage change in sales occurs if profits increase by 3 percent when the firms degree of operating leverage is 4. 5? A)0. 33 percent B)0. 67 percent C)1. 50 percent D)3. 33 percent Answer B DOL = [pic] = [pic] % change in sales = 0. 67%. 22. (Q. 18 in B) If an assets expected return is 10 percent, which represents a 20 percent return in a good economy and a 5 percent loss in a bad economy, what is the probability of a good economy? A)60. 00 percent B)40. 00 percent C)33. 33 percent D)18. 33 percent Answer A p: probability of a good economy; 1-p: probability of a bad economy. It follows that: 10% = 20% ? p + (-5%) ? (1- p) ( p = 60%. 23. (Q. 19 in B) What is the approximate standard deviation of returns for a one- year project that is equally likely to return 100 percent as it is to provide a 100 percent loss? A)0 percent B)50 percent C)71 percent D)100 percent Answer D Mean = (0. 5 ? 100%) + (0. 5 ? (–100%)) = 50% – 50% = 0%. Variance = [pic]= [pic] = 10,000 Standard deviation = [pic]= 100%. 24. (Q. 20 in B) What is the approximate variance of returns (in percentages squared) if over the past three years an investment returned 8. 0 percent, -12. 0 percent, and 15. 0 percent? A)31 B)131 C)182 D)961 Answer B Mean = [pic]= 3. 67%. Variance = [pic] = [pic] = 130. 89 percentages squared. 25. (Q. 21 in B) What is the standard deviation of a five-stock portfolio that produced portfolio returns of -4%, 2% and 5% with equal probability? A) 2. 90% B) 3. 24% C) 3. 74% D) 4. 58% Answer C The equal probability is 1/3. The portfolio expected return = (1/3)(-4% + 2% + 5%) = 1%. The portfolio variance = (1/3)[(-4%-1%)2 + (2%-1%)2 + (5%-1%)2] = 14 percentages squared = 0. 0014. Taking the square root of the portfolio variance, we find that the portfolio standard deviation is 3. 74%. 26. (Q. 22 in B) What is the expected rate of return on a portfolio that will decline in value by 13 percent in a recession, will increase by 16 percent in normal times, and will increase by 23 percent during boom times if each scenario has equal likelihood? A)8. 67 percent B)13. 00 percent C)13. 43 percent D)17. 33 percent Answer A Expected return = [pic]= [pic]= 8. 7%. 27. (Q. 31 in B) If a stock consistently goes up (down) by 1. 6 percent when the market portfolio goes down (up) by 1. 2 percent then the stock’s beta: A)equals 0. 75. B)equals 1. 33. C)equals -0. 75. D)equals -1. 33. Answer D It is obvious that the stock’s beta should be negative. Also the stock is an aggressive stock. The beta of the stock is – 1. 6% / 1. 2% = -1. 33. 28. (Q. 32 in B) Which of the following statements is correct when Treasury bills yield 7. 5 percent and the market risk premium is 9. 5 percent? A)The SP 500 would be expected to yield about 8. 50 percent. B)The SP 500 would be expected to yield about 9. 50 percent. C)The SP 500 would be expected to yield about 12. 68 percent. D)The SP 500 would be expected to yield about 17. 00 percent. Answer D The market portfolio (SP 500) would yield 7. 5% + 9. 5% = 17%. 29. (Q. 27 in B) When Treasury bills yield 7 percent and the expected return on the market is 16 percent, then the risk premium on a stock is equal to: A)9 percent. B)16 percent. C)9 percent times the stocks beta. D)8 percent plus the risk-free rate. Answer C According to the CAPM, the risk premium on a stock = the market risk premium ? ( = (16% 7%) ? ( = 9% ? (. 30. (Q. 28 in B) An investor was expecting an 18 percent return on her portfolio with beta of 1. 5 before the market risk premium increased from 8 percent to 10 percent. Based on this change, what return will now be expected on the portfolio? A)20. 0 percent B)20. 5 percent C)22. 5 percent D)26. 0 percent Answer B Old: 18% = rf + 1. 25(8%) = rf + 10. 0% 8. 0% = rf. New: Expected return = 8. 0% + 1. 25(10%) = 8. 0% + 12. 5% = 20. 5% . 31. (Q. 29 in B) What happens to the expected return on an asset if the asset beta decreases from 1. 5 to 1. 2, the risk-free rate increases from 4 percent to 5 percent, and the market expected return decreases from 9 percent to 7 percent? A)It increases from 7. 4 percent to 11. 5 percent. B)It increases from 13. 4 percent to 17. percent. C)It decreases from 11. 5 percent to 7. 4 percent. D)It decreases from 17. 5 percent to 13. 4 percent. Answer C Before the change: rj = 4% + 1. 5 (9% 4%) = 11. 5%. After the change: rj = 5% +1. 2 (7% 5%) = 7. 4%. 32. (Q. 30 in B) A project will generate $750,000 of cash flows annually for four years. The initial outlay is $2 million. The expected return on Treasury bills is 6 percent and the market risk premium is 8 percent. What is the highest project beta that will justify acceptance of the project? A)0. 00 B)1. 00 C)1. 56 D)2. 31 Answer C $2 million = $750,000 ? (PVIFA4 yr, IRR) IRR = 18. 45%. This suggests a risk premium of 12. 5 percent on the project, which corresponds to a beta of 1. 56. 33. (Q. 37 in B) If a firm is 42% debt-financed and the value of equity equals $47 million, which of the following is correct about firm value and the value of debt? There are only debt and equity in the firm’s capital structure. Firm value Value of debt A) $81 million $34 million B) $47 million $81 million C) $42 million$20 million D) $81 million$42 million Answer A Firm Value = $47M / (1-0. 42) = $81M. Debt = $(81M – 47M) = $34M. Use the following information to answer Questions 34 – 37 (Questions 33-36 in Type B). Eastman Chemical has 38 million shares of common stock outstanding. The book value per share is $42 but the stock sells for $58. It also has 700,000, 9 percent semiannual coupon bonds outstanding, par value $1,000 each. The bonds have 10 years to maturity and sell for 86 percent of par. Eastman’s common stock is twice as risky as the market portfolio. The firm has 14 million shares of 5 percent preferred stock outstanding which currently sell for $63 per share. The face value per preferred share is $100. The T-bills yield 5. 25%, and the market risk premium is assumed to be 4. 15%. Eastman is in the 35% corporate income tax bracket. 34. (Q. 33 in B) Eastman’s after-tax cost of debt is: A) 4. 53% B) 6. 45% C) 6. 96% D) 7. 40% Answer D On your financial calculator: FV=1000, PV=-860, N=20, PMT=45; I=? 5. 69% ( YTM=5. 69 ? 2 =11. 38%. After-tax cost of debt = 11. 38% ? (1-35%) = 7. 40%. 35. (Q. 34 in B) Eastman’s cost of equity is: A) 9. 40% B) 13. 55% C) 14. 65% D) 24. 05% Answer B By the CAPM: requity = 5. 25% + 2 ? 4. 15% = 13. 55%. 36. (Q. 35 in B) Eastman’s cost of preferred stock is: A) 4. 85% B) 5. 00% C) 6. 22% D) 7. 94% Answer D The annual dividend paid on per preferred share is $100 ? 5% = $5. So rpreferred = $5 / $63 = 7. 94%. 37. (Q. 36 in B) What is the discount rate that Eastman should use to evaluate a project which is very similar to the firm’s existing business? A) 8. 56% B) 9. 25% C) 11. 22% D) 13. 55% Answer C    |Equity |Preferred |Debt |Value | |Price |58 |63 |860 | | |Shares (million) |38 |14 |0. 7 | | |Market Value ($ million) |2,204 |882 |602 |3,688 | |Weights |0. 60 |0. 24 |0. 16 | | |Costs |13. 55% |7. 94% |7. 40% | | |WACC |11. 22% | | | | Conceptual questions (2 points each) 38. (Q. 3 in B) When a manager does not accept a positive-NPV project, shareholders face an opportunity cost in the amount of the: A)projects initial cost. B)projects NPV. C)projects discounted cash flows. D)soft capital rationing budget. Answer B 39. (Q. 44 in B) When mutually exclusive projects have different lives, the project which should be selected will have the: A)highest IRR. B)longest life. C)highest NPV, discounted at the opportunity cost of capital. D)lowest equivalent annual cost. Answer D 40. (Q. 45 in B) When should the net working capital investments be included in the estimation of cash flows? A) Never. B) At the beginning of the project. C) At the end of a project. D) Any time during the life of a project. Answer D 41. (Q. 46 in B) Capital budgeting investments are evaluated with the assumption that projects are: A) 100 percent -debt financed. B) 100 percent -equity financed. C) 50 percent -equity and 50 percent -debt financed. D) 25 percent -equity and 75 percent -debt financed. Answer B 42. (Q. 38 in B) If sensitivity analysis indicates none of the individual variables will cause a negative NPV under pessimistic conditions, then the: A)project is assured to be successful. B)projects discount rate should be reduced. C)economic forecasts are possibly overly optimistic. D)interaction of the variables should be considered. Answer D 43. (Q. 9 in B) The opportunity to alter production technology gives managers: A)the flexibility to adapt to changing situations. B)increased cash flow from operations. C)the opportunity to expand production. D)the ability to expand product lines. Answer A 44. (Q. 40 in B) Which of the following concerns is likely to b e most important to portfolio investors seeking diversification? A)Total volatility of each individual securities. B)Standard deviation of individual securities. C)Correlation of returns between securities. D)Achieving the risk-free rate of return. Answer C 45. (Q. 41 in B) The risk premium that is offered on common stock is equal to the: A)expected return on the stock. B)real rate of return on the stock. C)excess of expected return over a risk-free return. D)expected return on the SP 500 index. Answer C 46. (Q. 42 in B) The standard deviations of individual stocks are generally higher than the standard deviation of the market portfolio because individual stocks: A)offer higher returns. B)have more systematic risk. C)do not have unique risk. D)have no diversification of risk. Answer D 47. (Q. 49 in B) Stock returns can be explained by the stocks _________ and the stocks __________. A)beta; unique risk. B)beta; market risk. C)unique risk; firm-specific risk. D)aggressive risk; defensive risk. Answer A 48. (Q. 0 in B) What will happen to a stock that offers a lower risk premium than predicted by the CAPM? A)Its beta will increase. B)Its beta will decrease. C)Its price will decrease until yield is increased. D)Its price will increase until yield is reduced. Answer C 49. (Q. 47 in B) Generally speaking, the optimal capital mix that minimizes the weighte d average cost of capital also: A) maximizes EPS. B) maximizes share price. C) minimizes the required rate of return on equity. D) minimizes bankruptcy costs. Answer B 50. (Q. 48 in B) Firms have various sources of financing. Which one of the following does not incur flotation costs? A) Long-term debt. B) Preferred stock. C) Common stock. D) Retained earnings. Answer D