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Finance Questions and Answers April 25, 2016

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please answer these questions. Which one of the following bonds is the most sensitive to interest rate risk? 1-year; 10 percent coupon O 1-year; zero coupon O 30-year; 10 percent coupon O 30-year; zero coupon Investment grade bonds have a bond rating above or equal to BBB (Baa) BB(Ba) OB O AA (Aa) O None of the above
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QUESTION 3 Lulumango received an invoice dated November 18 for a shipment of goods received on November 15. The invoice was for $7740 with terms 4/10. 3/20, 2/45, n/90. Lulumango made a 54200 payment on November 26 and an $1500 payment on December 2. How much must Lulumango pay by January 2 to clear the remaining balance? Round all calculations to
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Bonnie has decided to begin a retirement savings program where she will contribute to an account that will accumulate tax free throughout her working life. She expects to retire in exactly 5 years from today, and her goal is to have accumulated the amount of $ 900000 when she reaches her future retirement age. In order to meet her goal, she will

Financial Planning Exercise 3 Rent versus buy home Use Worksheet 5.2 and Exhibit 5.6. Emma Sanchez is currently renting an apartment for $800 per month and paying $225 annually for renter's Insurance. She just found a small townhouse she can buy for $175,000. She has enough cash for a $10,000 down payment and $4,200 in closing costs. Emma
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bears the interest rate risk, in a fixed-rate mortgage, the In an adjustable-rate mortgage, the bears the interest rate risk. Select one: O a. lender; lender O b. borrower; lender C lender; borrower d. borrower; borrower e federal government consumers
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Problem 13-11 Calculating Portfolio Betas [LO4] You own a stock portfolio invested 40 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 10 percent in Stock T. The betas for these four stocks are .78 1.16, 1.17, and 1.34, respectively. What is the portfolio beta? (Do not round intermediate calculations and round your answer to 2
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You have an outstanding student loan with required payments of $550 per month for the next four years. The interest rate on the loan is 10% APR compounded monthly). Now that you realize your best investment is to prepay your student loan, you decide to prepay as much as you can each month. Looking at your budget, you can afford to pay an extra
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Which of the following is appropriate for risk-tolerant investors preferring maximum capital appreciation over current income? Growth funds Value funds O Equity-income funds O Aggressive growth funds
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With the net present value approach, all net cash flows are discounted at the O all of the above O required rate of return O cost of capital O discount rate
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4 Moving to another question will save the estion 9 FMCG Inc an all equity firm with 9200 shares outstanding with before interest and taxes equal to $85,000. If the interest rate change in the capital structure? Show the steps of computatio 1. Na of shares owned by you initially (before the charge 2 Net Income and EPS after change in capital
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D Question 13 4 pts Using the following Exam Financial Statements.doc if FCFF in 2019 was $56,42 million, what was FCFE? Thicome statementumue year ending December (Millions of dollars except for per share data) 2018 2019 Net Sales 800.00 848.00 Cost of Goods Sold 576.00 610.56 Depreciation 60.00 63.68 Earnings before interest and taxes 164.00
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(Quantitative Question) You have found three timestment choices for a one year deposit compute the EAR cars a percent) for each inwestment choice. (Assume that there are 365 days in the year) a. 10% APR compounded quarterly . 104 APR compounded daily 6.9% APR compounded annually Write your answers in and rounded to two decimal places) both in the
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edwin was requied to grNt an easement on his property so local public utility can install and maintain water and sewer lines . which is correct. 1. any compensation received will decrease Edwards bases in the property 2. any confrontations he will increase Edwards bases in the property 3. and when will report any compensation as recognize gain 4.

Assume Bond A pays an 8% coupon rate, matures in 9 years, and has a face value of $1,000. What is the value of bond A assuming that bonds with similar risk are discounted at 10% and interest is paid quarterly Assume Bond A pays an 8% coupon rate, matures in 9 years, and has a face value of $1,000. What is the value of bond A assuming that bonds
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Question 2. Stock valuation (10 marks) Lory Company had net earnings of $127,000 past year, of which $46,200 was paid out in dividends. The company's equity was $1,587,500. Lory has 200,000 shares outstanding with a current market price of $11.63 per share. Both the number of shares and the dividend payout ratio are constant. Requirements: a) What
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An investor's portfolio has a duration that is shorter than the investment horizon. Which of the following statements is true supposing that interest rates subsequently increase? the realized holding period yield will be greater than the initial YTM the realized holding period yield will equal the initial YTM the realized holding period yield will
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Pina Colada Inc. recently invested in a project with a 3-year life span. The net present value was $8600 and annual cash inflows were $27000 for year 1; $29000 for year 2; and $31000 for year 3. The initial investment for the project, assuming a 15% required rate of return, was Present Value of 1 at 15% PV of an Annuity of 1 at 15% Year 1 0.870

Given the Index Model, using the monthly excess returns of the last five years, we have the following regression results for four compa Du Pont Exxon GE IBM Beta (B) 0.69 1.12 1.20 0.66 0.56 Alpha (0) 0.68 0.80 1.27 R-SQR (R2) 0.24 0.71 0.70 0.44 Residual STD (%) 6.53 3.84 4.14 4.01 Please answer the following questions with brief explanations (a)
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Can someone please show me how to solve this using excel? Thank you Changing stock price year by year. The price of a stock can vary from year to year. Using the dividend model, calculate the dividend and stock price each year and then graph the changing price of the stock if the current dividend is $2.80, the dividend growth rate is 4.0%, and the
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Answer questions 4 and 5 based upon the following information: Price of call option on a share of Company A's stock = $5 Strike price of call option = $39 Time to expiry of call option = 1 year Price of put option on a share of Company A's stock = Strike price of put option = $35 Time to expiry of put option = 1 year If you want to hedge the
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Question 1 1 pts ABC, Inc. pays a dividend of $2.85 per year infinitely. If the required rate of return on ABC's stock is 8.52% per year, what is today's price of the stock? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box
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8. Cash flow patterns and the modified rate of return calculation Tasty Tuna Corporation is analyzing a project with the following cash flows: Year Cash Flow -$1,720,000 $300,000 W NA $500,000 $600,000 $400,000 This project has cash flows. a) normal b) non normal Tasty Tuna Corporation's WACC is 5.00%. Calculate this project's modified internal
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SHOW CLEAR WORK ON EXCEL A lender is considering what terms to allow on a loan. Current market terms are 9 percent interest for 25 years for a fully amortizing loan. The borrower, Rich, has requested a loan of $100,000. The lender believes that extra credit analysis and careful loan control will have to be exercised because Rich has never borrowed

Nielson Motors (NM) has no debt. Its assets will be worth $600 million in one year if the economy is strong, but only $300 million if the economy is weak. Both events are equally likely. The market value today of Nielson's assets is $400 million. Suppose the risk-free interest rate is 3%. If Nielson borrows $154 million today at this rate and uses
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A bond with a coupon rate of 5.32 percent and semiannual coupon payments matures in 16 years. The YTM is 6.49 percent. What is the effective annual yleld? 0 6.49% 5.32% 5.39% o 686% 6.60%
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Final The common stock of the CALL. Corporation has been trading in a narrow range around $120 per share for months, and you believe it is going to stay in that range for the next 6 months. The price of a 6-month put option with an exercise price of $120 is $8.89. 8 a. If the risk-free interest rate is 8% per year, what must be the price of a
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PLEASE ANSWER AND SHOW EXCEL FUNCTIONS USED 1. A.) What is the present value of the following cash flows at a discount rate of 9 percent? Year 1 Year 2 Year 3 $100,000 $150,000 $200, 1. B.) What is the net present value of the following cash flow sequence at a discount rate of 11 percent? t = 0 t = 1 t = 2 -120,000 300,000 -100,000

Need explanation answer for both problems pitalization rate. 2. List the five steps in appraising income capitalization appraising the indicated value of a on approach, the indicated value of a selected property using the direct explain howt represent n where PV present value of a uniform annuity, I is the uniform explain how to obtain the
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11. Foreigners in a country need to follow of its culture. 12. (INDIVIDUALS/GROUPS) are considered to be the basic building block of social organization in many of the Western societies. 13. Higher class mobility (REDUCES/INCREASES) class consciousness and (REDUCES/INCREASES) the costs of production 14. Individualistic cultures are (LESS/MORE)
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Maese Industries Inc. has warrants outstanding that permit the holders to purchase 1 share of stock per warrant at a price of $24. perform the required analysis to answer the question below. a. Calculate the exercise value of the firm's warrants if the common sells at each of the following prices: (1) $20, (2) $25, (3) $30, (4) $100. (Hint: A

QUESTION 30 The shoe example given in class lecture stated that China reduces the taxes on export-oriented shoe companies in China (Subsidy) This lack of Tax is so dramatic and has such a large impact that the U.S. charges China. This is a form of protectionisms and is called.. Dumping Regulation barriers Importing Exporting 2 points QUESTION 31

Use the information in the table below to answer the following questions. Windswept Woodworks, Incorporated Input Data (millions of dollars) Year 2 Year 1 Accounts payable 612 544 Accounts receivable 1,456 990 Accumulated depreciation 6,922 6,792 Cash & equivalents 400 288 Common stock 1,360 1,280 Cost of goods sold 1,580 n.a. Depreciation expense

QUESTION 6 10 points Save Answer A 12-month European call option on a non dividend-paying stock is currently selling for $14 and a 12-month European put option on the same stock is currently selling for $3. The strike price of both options is $60. If the stock price is $63, and the risk-free rate is 7%, is there any arbitrage opportunity? If so,
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ssignment Chapter 09 Capital Budgeting Techniques 4. Net present value method Krause Engineering is evaluating a proposed capital budgeting project that will require an initial investment of s160,000. The project is arpoctod to generate the following nat cash flows: Assumie the dissres rate of retuen on a project of this type is 1045 . The net
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Project C Cash Flows (dollars) CO -15,000 10,500 10,500 -25,000 16,500 16,500 Given the above information, calculate NPV and IRR for project A and project B if the discount rate is 10% and then determine which project is more desirable. Select the multiple choice answer that corresponds with your answers A. NPV is +3,723.14 for A and +3,636,36 for
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Question 4 A Company is planning to buy Cars for their 2 Directors Cost of the Car is * 12,00,000 and maintenance expenses for a year will be around 3,00,000 Life of the bus is expected at 6 years The car can be purchased at a loan of 6% interest repayable in 5 years Depreciation for tax purpose will be 20% on written down value method &
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