A fund has an 8% front-end load on purchases and a 1% expense ratio. Gross return...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A fund has an 8% front-end load on purchases and a 1% expense ratio. Gross return of this fund will you is 9% per year before expenses. If you invest $10,000 in this fund, how much money have in this fund after 5 years? (5 points) Assume that you have just purchased some shares in a fund reporting $45 million in assets and 5 million shares outstanding. It also owes $4 million rent to the owner of the office building and $1 million to other financial advisors. What is the net asset value (NAV) of these shares? (5 points) ETS produces dividends of 0.20 and 0.40 in the first two years, respectively. The dividend in year three is estimated to be .80 and should grow in perpetuity at 4% growth rate. Given a discount rate of 10%, what is the price of the stock? (10 points) The market capitalization rate on the stock of FINA Corporation is 10%. Its expected ROE is 15%, and its expected EPS is $5. If the firm reinvests 40% of its earnings. (a) What is the present value of growth opportunities (PVGO)? (5 points) (b) What is the P/E ratio? (5 points) A fund has an 8% front-end load on purchases and a 1% expense ratio. Gross return of this fund will you is 9% per year before expenses. If you invest $10,000 in this fund, how much money have in this fund after 5 years? (5 points) Assume that you have just purchased some shares in a fund reporting $45 million in assets and 5 million shares outstanding. It also owes $4 million rent to the owner of the office building and $1 million to other financial advisors. What is the net asset value (NAV) of these shares? (5 points) ETS produces dividends of 0.20 and 0.40 in the first two years, respectively. The dividend in year three is estimated to be .80 and should grow in perpetuity at 4% growth rate. Given a discount rate of 10%, what is the price of the stock? (10 points) The market capitalization rate on the stock of FINA Corporation is 10%. Its expected ROE is 15%, and its expected EPS is $5. If the firm reinvests 40% of its earnings. (a) What is the present value of growth opportunities (PVGO)? (5 points) (b) What is the P/E ratio? (5 points)
Expert Answer:
Answer rating: 100% (QA)
1 Calculation of Investment Value after 5 years The effective annual expense ratio of the fund is 10... View the full answer
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Posted Date:
Students also viewed these finance questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Kiki purchases a $16,000 bond from Green Corp. on January 1, 2021. The bond has a 10% annual interest rate. On December 1, 2021, Kiki gifts the bond to her son, Branson. How much income is reported...
-
Fixed Assets and Capacity Usage For the company in the previous problem, suppose fixed assets are $470,000 and Sales are projected to grow to $710,000. How much in new fixed assets are required to...
-
Illustrate a detailed model with a diagram for the corruption analysis pattern.
-
If a company with a 12/31 year-end lends money in the form of a 6-month note on 11/1, which accounts will be credited when the note is paid off on 4/30?
-
Consider an employee who does not receive employer-based health insurance and must divide her $700 per week in after-tax income between health insurance and other goods. Draw this workers opportunity...
-
Cullumber Company is considering purchasing new equipment for $452,400. It is expected that the equipment will produce net annual cash flows of $58,000 over its 10-year useful life. Annual...
-
Kenmare Architects Ltd. (KAL) was incorporated and commenced operations on January 1, 2014. Sheila Kenmare, the company's only employee, consults with various clients and uses expensive equipment to...
-
Exercise 3.6 The following integral equation for f: [-a, a] R arises in a model of the motion of gas particles on a line: f(x) = 1 + = - - 1 1 + (x y) f (y) dy for -a x a. Prove that this...
-
Imagine that a recession is forthcoming. How should the central bank of a developing nation influence the national currency? Directly or indirectly?
-
Simplify the expression. 5x8. (-8x9) 5x8 (-8x)=(Simplify your answer. Use positive exponents only.)
-
Discuss the types of situations where you would expect to see non-constant variance in the data. Provide examples to support your response. Describe a specific instance where heteroscedasticity would...
-
Superfast Bikes is thinking of developing a new composite road bike. Development will require that the company pay a cost of $208,500 at the end of each year for the next 6 years. Once development of...
-
Assume perfect capital markets. Roche Technology's stock has a beta of 1.2 and has an expected return of 12.5%. It is a zero-debt firm. Suppose it issues new risk- free debt with a cost of debt of 5%...
-
The following figure shows four Nyquist diagram for different control system, please match the Nyquist diagram with the correct Transfer Functions that are listed in the table. Imaginary Axis 2.5 2...
-
The area of square PQRS is 100 ft2, and A, B, C, and D are the midpoints of the sides. Find the area of square ABCD. B A
-
Indicate whether you think the following claims regarding takeovers are true or false. In each case, provide a brief explanation for your answer. a. By merging competitors, takeovers have created...
-
Suppose Sunburn Sunscreen and Frostbite Thermalwear in the previous problems have decided to merge. Because the two companies have seasonal sales, the combined firms return on assets will have a...
-
Aguilera Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 ..........83,000 2 ..........92,000 3 ..........104,000 4...
-
Van Morrison would like to use QuickBooks Accountant for his new company, Central Coast Cellular. You choose to use QuickBooks Accountant EasyStep Interview. The companys federal tax ID is...
-
What is the purpose of setting preferences in QuickBooks Accountant?
-
Do all businesses use account numbers?
Study smarter with the SolutionInn App