Finance Questions and Answers October 26, 2021

28. A firm has total debt of 2,838 and total equity of 2,556. What is their equity multiplier 29. Your company had net sales of 50,000 over the past year. During that time, average receivables were 10,000. What was the average collection period, or DSO 30. You need 3,000 to buy a new stereo for your apartment. If you have 2,115 to invest at an

What is the true IRR of the following project Assume the firm would be able to reinvest the cash flows at a 7 rate of return. Year 0 1 2 3 A 1,000 600 400 400

Consider a 5 (annalized coupon rate) note maturing 21504, trading at y2 (semiannual periodic rate) for settlement 21503 (M100,000). The bond is used as collateral in a sixmonth repo, for settlement 21503. The market value of bonds being repoed is 10,000,000, with a 5 haircut. Assume that the party doing the reverse sells the bonds on 21503 to

(5 points) Given an opportunity cost of 10 find the value of the annuity if the payments illustrated below are made. 60 60 60 60 19 20 21 0 1 5 6 4 3 7 8 9 10 11 12 13 14 15 16 17 18

Process fluid is heated in a series of three stirred tank heaters of the same size. Steam TC Tup(s) where Steam 2const G.(s) Controller To The outlet temperature is measured and controlled to set point by manipulating the heating rate of the first heater. The heating rates of the second and third heaters are constant. Assuming very fast sensor and

Jules Bianchi is a bond analyst for Maneval Investments, Inc. Bianchi gathers data on three corporate bonds, as shown in Exhibit 1. EXHIBIT 1 Selected Bond Data Issuer Ayrault, Inc. (AI) Blum, Inc. (BI) Cresson Enterprises (CE) Coupon Rate 5.25 5.25 5.25 Price 100.200 EXHIBIT 2 Binomial Interest Rate Trees 101.300 102.100 Note Each bond has a

A few weeks ago, the board of directors of West Fraser Timber Corporation (WFT) declared a dividend of 20 cents per share. Shareholders on record will receive their dividend 26 days from today. The expected effective rate of return per year for WFT is 20%. Suppose it is 1:29:59 p.m. and the stock goes ex-dividend at 1:30 p.m. today. How much do

For a DCF valuation, you find that the present value of FCFs is $100,000, and the present value of the horizon value is $25,000. You also determine that the short-term investments is worth $10,000. What is the value of the company (i.e., the estimated total intrinsic value)?

Calculate WACC for the following information.

Company Cathleen Sinclair General Health Beauty Womens Care Company Skin Care Enterprises Average Calculate WACC Debt Equity Levered Jnlevered EV MV MV Debt Equity EV 81.6 18.4 16.5 83.5 10.0 90.0 23.6 76.4 32.9 49.1 Beta 2.22 1.95 1.14 1.35 1.67 Beta 0.61 1.74 1.07 1.14 1.14 Unlevered Levered Cost of Cost of Debt Beta Beta Equity AfterTax WACC

For uncontrolled half wave rectifier, R80ohm, L0.15H, f50Hz and Vm311V. Find the point when the current reaches to zero in radian. In your calculations, take 3 digits after the comma and take pi 3,14 Enter your answer into the system in terms of the desired unit only as a number.

t while all of the cash flow estimates are correct, your associate used the flowtoequity valuation method and discounted the cash flows using the companys equity cost of capital of 11. However, the projects incremental leverage is very different from the companys historical debtequity ratio of 0.20 For this project, the company will instead borrow

You are the Risk Director of ABC, Banco International. In 2019, the credit portfolio amounted to $45,000,000 and the official wants to estimate the losses of said portfolio based on past experience. In this analysis, the following regression equation has been established; y = 112933 + 0.0192x. Using the equation described, calculate the amount of

The Breakfast Company buys equipment for $100,000.Management estimates the equipment will have a useful life of eight years and have no scrap value. Calculate the depreciation expense at the end of the second year using the double declining balance depreciation method. (show your work in detail)

What is the annual carrying cost if the fixed cost per order is $2,000, the carrying cost per unit is $20 per year, the monthly units needed are 3,000, and the company orders 12 times per year?

Juan Diaz is contemplating investing in shares of Indigo Inc, whose shares are currently trading at $18.99 per share. The company has recently started operations and is not expected to pay dividends for the next four years. The company's EPS currently stands at $2.75 and is expected to grow at a rate of 16% per year for the next four years.

You have been asked to appraise a 4-bedroom, 2-bathroom home that will be sold tomorrow. He has found 1 comparison property that sold for $325,000 5 weeks from today that has 3 bedrooms and 3 bathrooms. You estimate that the value has been declining at a rate of $5,000 per week since the transaction for that property took place, each bedroom is

Plaid Pants, Inc. The beta of common stock is 0.90, while the beta of Acme Dynamite Company common stock is 1.80. The expected return in the market is 10 percent and the risk-free rate is 6 percent. Based on the capital-asset pricing model (CAPM) and using the above information, the required return on Plaid Pants' common stock should be _________

Effie plans to save $100 every six months for the next several years. If your account earns 14 percent, compounded semi-annually, how much will be in your account in 5 years?

A bank has a 20-year mortgage loan that pays a 3.5% coupon in its loan portfolio with a principal value of $250,486.20. Using this information you should be able to calculate the mortgage's cash flows over the next 20 years (assuming 0 prepayment) in order to determine what the price of the loan is if the current yield to maturity is 5.5%. Round

You are invested 26.70 in growth stocks with a beta of 1.97, 20.40 in value stocks with a beta of 0.69, and 52.90 in the market portfolio. What is the beta of your portfolio

Consider a 3-bond portfolio where the weight of bond 1 = .416 and its modified duration = 3.861, the weight of bond 2 = .440 and its modified duration = 8.047 and the weight of bond 3 = .144 and its modified duration = 9.168. what is the portfolio modified duration?

Your company is considering a high-risk project that could generate strong income but will involve a significant initial investment. Because of this risk, top management is naturally concerned about how long it is likely to take to pay off that investment before they can start making a profit. This project will require an investment of $200,000

Chris Silvers is 39 years old and has accumulated $128,000 in his self-directed defined contribution pension plan. Each year he contributes $2,500 to the plan, and his employer contributes an equal amount. Chris thinks he will retire at age 62 and figures he will live to age 86. The plan allows for two types of investments. One offers a 4%

Company XYZ has 40% debt 60% equity as its optimum capital structure.The company's nominal interest rate is 12% up to $5 million in debt, above which the interest rate rises to 14%.Expected net income for the year is $17.5 million, dividend payout rate is 45%, final dividend is $4.5 per share, P0 = $37, g=5%, IPO cost is 10% and corporate tax rate

ABC Ltd. is in the toy manufacturing business.The firm plans to develop a new toy.The firm may purchase or lease the necessary machinery.The machine can be purchased for Rs.60,000,000.It is expected to have a useful life of 5 years with a salvage value of Rs.4,00,000 and straight-line depreciation at the end of 5 years.Alternatively, the machine

Use the information below to answer this question. Windswept, Inc. 2017 Income Statement (in millions) net sales $ 10.000 cost of goods sold 7.700 Depreciation 345 Earnings excluding interest and taxes $ 1.955 interest payment 90 taxable income $ 1.865 taxes 560 Net income $ 1.305 Windswept, Inc. 2016 and 2017 Balance Sheets (in millions of

If you deposit $55,000 at an interest rate of 350 basis points above the 5% interest rate, what will you get at the end of the term?

A bank that started with ALL at the beginning of the year at $1.48 million collects bad loans $0.94 million during the year, $0.12 million was charged on loans previously set off, and current charges of $1.02 million for loan losses income for an allowance, calculate the balance at the end of the year.

Use the information below to answer the following questions. Company Code Beta Ford Motor Company F 2.77 International Business Machines IBM 0.73 Merck MRK 0.90 If the market risk premium is 6% and the risk-free rate is 4%,calculate the expected return on investment in Ford Motor Company.

The financial data for Kraft Heinz Company (KHC) is provided below. This information is to be used to answer the minicase questions. Equity Information Kraft Heinz Company (Source Yahoo Finance) 38.90 0.13 (0.03) At close Nov 24 400 PM EDT Previous Close Open Bid Ask Days Range 52 Week Range 38.90 39.08 38.59 x 1000 38.91 x 1400 38.87 39.17 Nov

You wish to contribute a $24,000 deposit towards a margin loan from the Notional Investment Bank Ltd. This margin loan has a Loan to Value (LVR) ratio of 70%. A) What is the maximum amount you could borrow using this margin loan? B) Estimate the portfolio value assuming you borrow the maximum amount allowed under this margin loan? C) There is a

Explain the Fisher Effect theory focusing on Point C and Point D 5 4 Parity line 3 2 1 H 1 3 1 2 3 1 5 Interest differential in favor of home country () Inflation differential home country relative to foreign country () 4 5

We have the opportunity to buy a 10-year (original term) bond with 8 years of semi-annual coupon payments remaining. The annual coupon rate is set at 6% ($30 semi-annual payment). If the current Yield to Maturity (prevailing market rate on comparable bonds) is approximately 6.5%, estimate the appropriate purchase price of the bond. 2. A zero

In September 2019, Temple Inc shares sell for 24.89 per share. The company is needs to raise funds for a new project. The board of directors has agreed to raise the necessary funds through a rights issue. The firm announced the terms of this process which require shareholders to pay 15 and hold 7 rights for the chance to buy one new share. What is

The relative dielectric constant of the medium between the conductors of the parallel plate transmission line is 2.5 and the distance between its plates is 4 mm. What is the width of the plates in mm so that the characteristic impedance of the line is 50 ohms

Identify and analyze the factors that can affect the reliability of a firm's beta. Do you think the recent global financial crisis has had an impact on a firm's beta, its cost of equity and its cost of capital? What are the likely implications, for both the firm and its providers of capital?

Raleigh Medical Clinic is considering acquiring 2 new ultrasound machines for 300,000. The clinic estimates that the machines will have an economic life of 4 years after which they will have zero salvage value. The machines expects the two machines to generate net revenue of 1,000,000 per year and to require 900,000 per year in fixed costs. The

motion of the simple pendulum sin 0 Te ml Consider the nonlinear equations of Derive the equilibrium points for the system and determine the corresponding smallsignal linear models. To do that, we should (a) derive the equilibrium points, (b) define the state variables, x, and (c) write the equation of motion in statevariable form x Ax Bu where

Let S(0) 100, R 0.05, U 0.2, D 0.2, and N 3, and consider the payoff of following European butterfly spread 30 20 10 50 60 70 80 90 100 110 120 130 140 (a) You can construct this spread by buying andor selling European call options. List the call options needed to replicate the butterfly spread. (b) Price the butterfly spread by taking the

Craig and Aileen have always wanted to live close to their work. Craig is an engineer and his net income is $63,440 per annum. Aileen is an accountant and her net income is $66,895 per annum. Craig's tax rate is 20.7% and Aileen's tax rate is 21.3%. The cost of purchasing a home in the city that they work is quite expensive. Craig and Aileen have

Let parameters be S(0) 100, U 0.1, D 0.1, R 0.05 (a) Find E. S(2)P (b) Find (1) and confirm it is the same random variable in (a) (c) Find E. (3)P (d) Find (2) and confirm it is the same random variable in (c)

Mike and his family currently have a high deductible plan with a deductible of $12,500 and a monthly premium of $500. What recommendations do you have for reducing the deductible and improving coverage? Assume there was a $500 per month premium increase, bringing the total premium to $1000 per month. The plan is a typical PPO. (refers to the

Dickinson Company has 12,120,000 million in assets. Currently half of these assets are financed with longterm debt at 10.6 percent and half with common stock having a par value of 8. Ms. Smith, Vice President of Finance, wishes to analyze two refinancing plans, one with more debt (D) and one with more equity (E). The company earns a return on

Lloyd Inc. has sales of $700,000, a net income of $84,000, and the following balance sheet: Cash $ 119,000 Accounts payable $ 189,000 Receivables 343,000 Notes payable to bank 105,000 Inventories 805,000 Total current liabilities $ 294,000 Total current assets $ 1,267,000 Long-term debt 259,000 Net fixed assets 483,000 Common equity 1,197,000

Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts that Goodwin is likely to pay its first dividend three years from now. She expects Goodwin to pay a 5.00000 dividend at that time (D, 5.00000) and believes that the dividend will grow by 26.00000 for the following two

Pillows Incorporated was considering an investment in the following project: Required initial investment $ 1,030,000 Net annual after-tax cash inflow $ 160,000 Annual depreciation expense (($1,030,000 $174,000)/20 years) $ 42,800 Estimated salvage value $ 174,000 Life of the project in years 20 Assume that cash inflows occur evenly throughout the

You are trying to estimate the stock price per share of a private firm. You find the following comparable firms, along with their P/E ratios and their enterprise multiples (EM): Comp firm 1: P/E=17, EM=9 Comp firm 2: P/E=26, EM=10 If the private firm has earnings per share (EPS) of $4, EBITDA of $11 million, debt of $5 million, no excess cash, no

Calculate the following

Objective To compare the direct and step methods of allocating overhead costs Monroe Company presents the following data Square Feet Overhead Costs 90,000 27,000 Department Factory Services Tools and Supplies Fabricating Assembling Finishing Directions Calculate the amounts to be allocated to the three producing departments using (a) the direct

An income statement and balance sheet for one companies are as fellows Required liquidity ratios current and quick .. number with analysis if good or no asset managment debt managment profitability ratios / return managment market analvsis please this is project so i need deatils for every part and full ratios with analysis for all corporation in

current assets cash cash equivalent Debtors Debit balances Fixed Assets other Assets Total Assets current Liabilities Long Term Liabilities General Fund Capital Retained Earnings Result Total Liabilities Note BALANCE SHEETS As of December31 2021 19,565 19,565 14,141 (9,229) 14,653 19,565 19,565 2020 58,000 58,000 9,310 67,310 2,681 73,858

A 12year bond with a face value of 2000 is redeemable at par and earns interest at j2 7. If the yield rate is j2 9.5, find the full (or dirty) price of the bond 4 months after the payment of coupon number 18. Use compound interest for points in time between coupon payments. Answer Note Round any intermediate dollar values off and use them in

Logan Company produces two products, Standard and Premier. Logan can sell all of the Standard and Premier products it can produce, but it has limited production capacity. Machine hours per unit for Standard is 1 hour and for Premier is 1.5 hours. The company has 216,000 machine hours available. Contribution margin per unit is $24 for Standard and

You want to buy an investment instrument that will pay you 3,000 exactly one year from today, after which the annual payments will increase at the rate of 4 per year, forever. If the required annual rate of return is 6, how much would you pay for such investment today

Mixing Company manufactured 1,900 units of its only product during 2022. The inputs for this production are as follows: 490 pounds of Material A at a cost of $1.90 per pound 340 pounds of Material H at a cost of $3.15 per pound 460 direct labor hours at $36 per hour The firm manufactured 2,259 units of the same product in 2021 with the following

Burn Incorporated purchased a $520,000 machine to manufacture a specialty tap for electrical equipment. The tap is in high demand and Burn can sell all that it could manufacture for the next 10 years. To encourage capital investments, the government exempts taxes on profits from new investments in this type of machinery. This legislation most

A project has current assets of $5M and fixed assets needs of $25M. The project will be funded with 40% equity and 60% debt capital. The debt capital must be repaid over 10 years in equal annual installments. The interest rate is 9%. Calculate the annual debt service assuming that the loan is to be calculated using the CRF approach. Answer =

Assume a taxpayer had a 2022 selfemployment tax liability of 29,322, which was compromised of the following 15,922 Social Security tax, 11,600 Medicare tax, and 1,800 additional Medicare tax. How much selfemployment tax deduction will this taxpayer claim in 2022

Suppose you take a loan of 20,000 to start a business. The APR of the loan is 12 percent (interests are compounded monthly). There are no minimum monthly payments for the loan. You are planning to make no payments for the loan until 3 years later when you will repay the loan in full. How much will you need to pay to the bank 3 years from today

solve the following

Some balance sheet information is shown here (all values in millions of dollars). a. What change in the book value of the companys equity took place at the end of 2018 b. Is the companys markettobook ratio meaningful Is its book debtequity ratio meaningful Explain. .... a. What change in the book value of the companys equity took place at the end

Stock K G B U Grace Corporation is considering the following investments. The current rate on Treasury bills is 2.5 percent and the expected return for the market is 10.5 percent. Beta 1.14 1.29 0.87 0.99 (Click on the icon in order to copy its contents into a spreadsheet.) a. Using the CAPM, what rates of return should Grace require for each

12 41 A random sample of 18 airline carryon luggage bags gave the following weights (rounded to the nearest pound). 25 7 10 22 38 10 12 19 19 12 12 8 16 5 17 14 Find the mean, median, and mode of these weights. 2. Find the mean and the 5 trimmed mean for the following annual salaries (in thousands) of employees in a small company. Which is most

You wish to find the appropriate WACC to use for a capital project with a projected ten-year life. The project has the same risk as the overall firm. The beta of the firm's equity is 1.1 and you estimate the market risk premium to be 8%. The firm recently issued a ten-year bond with a yield to maturity of 8.1%. The three-month treasury bill yields

Procter & Gamble just received payment for a large export of Tide in the amount of 275,000 Denmark kroner (DKK). If the exchange rate is $0.1992 CAD per DKK, how many Canadian dollars will Procter & Gamble receive? Use the proportion method to solve this.

Quad Enterprises is considering a new threeyear expansion project that requires an initial fixed asset investment of 2.9 million. The fixed asset will be depreciated straightline to zero over its threeyear tax life, after which time it will be worthless. The project is estimated to generate 2,190,000 in annual sales, with costs of 815,000. The tax

The expansion into New Orleans will cost $12.38 in millions. The cost of capital is 5.8%. The next four years has the following cash flows (in millions) Year 1 2 3 4 2.95 4.17 3.99 3.11 What is the profitability Index for this expansion?

Yield to maturity. What is the yield of each of the following bond a. What is the yield of the following bond if interest (coupon) is paid annually Years to Yield to Maturity Maturity 30 Par Value 5,000.00 if interest (coupon) is paid annually Coupon Rate 9 Price 3,790.00

Find (a) the domain of f, (b) the critical number(s), and (c) interval(s) where the function is increasing and decreasing. If there is more than one number or interval, separate answers with a semicolon. Type INF for and INF for. Responses must contain a simplified fraction, ab, when necessary. Do not enter any spaces in your answers. You may use

MTC Company's sales last year was 1,830,000 with a net profit margin of 5%.. Changes in the company's balance sheet accounts for the year appear below: Cash (13,000) Accounts receivable 16,000 Inventory 21,000 Prepaid expenses (8,000) Long-term investments 30,000 Property, plant and equipment 60,000 Accumulated depreciation 36,000 Accounts payable

MNL Industries is considering an investment in derivatives, stocks, and bonds securities. You were assigned as a financial manager to assess the investments and make an investment decision. After an investigation of the possible outcomes, you made the estimates as shown in the table below: Scenario Probability Derivatives Stocks Bonds Normal 35%

On Monday morning you buy one June Treasury-bond futures contract for $97,800. The contracts face value is $100,000. The initial margin and maintenance margin requirements are $2,700 and $2,000, respectively, per contract. Use the following price data to answer the following questions. Day Settle (Closing) Price Monday $97,400 Tuesday $98,000

The year 2022 was a difficult year, as inflation grew and the Canadian economy was affected. What do you think the impact of inflation will be in the next couple of years in Canada? Share your ideas and opinions on how you feel inflation has and will continue to impact our economy. Make specific reference to the economic impact and provide facts

A farmer sells futures contracts at $2.95 per bushel of corn. The spot price of corn is $2.65 at contract expiration. The farmer harvested 10,000 bushels of corn and sold futures contracts on 10,000 bushels of corn. A. What are the farmer's proceeds from the sale of corn in the spot market? B. what are the farmer's proceeds from the sale of corn

Viking Bank in Minnesota has the following Earnings and Profitability Analysis section on its Uniform Bank Performance Report for 2020 and 2019. OROA Analysis Profitability Analysis of Average Earning Assets 12312020 Bank PG1 4.54 3.47 1.17 0.92 3.36 2.54 2.04 3.87 1.83 IR IE NIM NIR NIE Burden 1.56 2.47 0.91 0.52 0.21 1.00 1.47 Tier1 Capital

Calculate the following

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Current assets Cash Accounts receivable Inventory Assets Total Fixed assets Net plant and equipment Total assets 2020 104 455 553 1,112 US Corporation 2020 and 2021 Balance Sheets (in millions) 2021 221 2) What is the change in NWC 688

You have won a 30 million lottery paid monthly over thirty years. How much are the payments currently worth at 8 interest

Suppose you are analyzing the shares of a company. Analysts expect the company to pay dividends of $10 per share at the end of the first year, $12 per share at the end of the second year and $15 per share at the end of the third year. Thereafter, the dividend will decrease at a regular rate of 3%. If the required rate of return is 12%, what is the

CFC does not currently pay any dividends. Analysts expect the company to pay its first dividend of $5 per share at the end of Year 4. After that, the company will continue to pay this dividend at the end of each year for the foreseeable future. What is the value of the stock today if the required rate of return is 10%

The bonds of Amalgamated Industries make annual interest payments of $120 per year and have a par value of $1,000. These bonds mature in 28 years. Assuming the bonds have a yield to maturity of 16.3%, what is the current bond price.

Consider the following two stocks. Probabilities (pi) Stock"A" Stock "B" Recession p1=24% -9% 1% Normal p2=40% 4% -15% Boom p3=36% 14% 20% What is the expected return of each stock? Enter your answers as a percentage rounded to 2 decimal places. Do not enter the percentage sign in your answer. What are the standard deviations of stocks "A" and

Suppose the risk-free rate is 3%, and the expected return on the market portfolio is 9%. What is the systematic risk on a portfolio invested equally in T-bills and stocks?

You are assigned to check whether the relative version of the purchasing power parity holds. Using data provided to you for the period 1971-2021 (see Excel file), prepare a brief report on the following question: Does the purchasing power parity hold for the British poundUS dollar exchange rate? Among other things you need to do the following:

year 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 InflationGBR 9.4448374 7.0710984 ghu,mu, (61uuse022 9.1960332 Sheet1 16.044011 24.207288 16.559523 15.840267 8.263141 13.42128 17.965924 11.876627 8.5988638 4.6093033 4.960711 6.0713943 3.4276094 4.1489223 4.1553517

Evaluate (3x, cosy) dr where C is the rectangle with vertices (0, 0), (, 0), (, 2), (0, 2). Y Evaluate fe dx dy where C is the curve given by r(t) (t, t 1), 0 t 3. Evaluate Sff(x yjd where E is the region inside the cylinder of radius 2 with center along the xaxis and inside the sphere of radius 4 centered at the origin.

Einstein Brothers Kazoos is currently an all-equifirm that has an annual projected BIT of $112,075. The current cost of equity is 14.5% and the tax rate is 23%. The firm is considering adding $114,000 of dest with a coupon rate of 7% to its capital structure. The debt will be sold at par value. what is the value of the levered firm (with the debt?

4. Imagine you are finally able to buy a Tesla. To do so, you have arranged to borrow 45,000 from your local credit union. The interest rate on the loan is 6.50 (annually compounding). To simplify the calculations, assume that you will repay your loan over the next 3 years by making annual payments at the end of each year. How much is the annual

You are about to purchase a new house for $400,000 You plan on making a down payment of 20 percent of the value of the house and taking out a mortgage for the remaining balance. A bank has offered you a 30-year mortgage at 8.00 percent APR compounded semiannually. a) How much is your monthly payment? b) How much will you still owe on your mortgage

A twoyear bond provides a coupon of 6 paid semiannually and has a cash price of 102. What is the bonds yield (Hint Goal Seek) Report your answer in decimal format rounded to four decimal places. (Note this problem has only one numerical version, so each wrong attempt leads to a 25 grading penalty.) Answer Check Suppose that the 6month, 12month,

Recall from class (X, X... X,) is said to be jointly distributed as a Multinomial (n p. p....pr) if for any set of integers n.....n, with 0

This Company has just paid a dividend of $5 per share, which is expected to grow at 10% per year for the next three years, and then at 4% per year forever. Investors require a return of 12% for the next three years, and then 9% per year forever. What is the current share price for Brock stock? b) Vancouver Inc. has never paid a dividend, but the

The cash price of a 1.5year Treasury bill is 102.9 at present. The bond pays an annual coupon of 5 which is paid on a semi annual basis. The 5 year and 1 year zero rates have already been calculated as 0.012606 and 0.014361. Calculate the oneandahalfyear zero rate (Hint The bonds face values would be 100.) Report your answer in decimal format

Mike and Bethan plan to buy their dream house in sis years' time. They expect to need 3 0 , 0 0 0 to do so at that time. They are saving in an account that pays 1 0 percent per annum. How much do they have to deposit every year to have the roquired amount when the final deposit is made?

1. Anthony and Ian are in the process of setting up their own company. They are considering making it either as a partnership or as a corporation. Eventually they decide to set up the company as a separate legal entity, meaning that they have no personal liability for the firms debt. They will share ownership of that firm on a 50-50 basis. Which

Consider the one-period binomial example studied in Class 17 to find the price of the up and down securities. At time t = 0 the stock price is equal to S0. At time 1 is eithergoesupordown. Ifitgoesup,itspriceisS1+ =uS0,andifitgoesdownits price is S = d S0, where d < u. Let r denote the interest rate. (a) Useanoarbitrageargumenttoshowthatu>1+r>d.

Fido, Inc. (from Problem 2) has decided to pursue the Doggie Umbrella project. Their initial investment in capital equipment is $5.8 million and they expect revenue of $2.4 million per year over the 10-year life of the project. They estimates the salvage value of the equipment to be $0.8 million at the end of that 10-year period. Determine the

Please help me solve the problem on 11 and 12! 11) You are a risk-averse investor whose coefficient of risk aversion (A) 2.0. Your risk preferences are described by the following quadratic Expected Utility Function: Expected Utility of Portfolio = E [Return on Portfolio-0.5A times variance (Portfolio) Use the following data to answer questions a,

What does this graph show, how would i explain it to someone. nivirlond Ctatietire

JPMorgan Chase co. (JPM) Dividend Statistics 146.43 9502Sjj) 54 31.4 Next Rpt Date 12 Jan 24 SYear price Key Statistics 20 Pending Mgt Change Indicated Ann Dividend DiveI d I Yr Div Growth 3 Yr Div Growth S Yr Div Growth Oiv Increases in S Yrs P ayout Ratio Coverage Cumulative Split Factor 12.5 63.3 242 4.1x 0.143 spso ( Indexed To JPM ) 100 22

e) the strong form While looking at the historical stock returns of companies that have undergone mergers, you notice that the prices of the acquired companies have already started climbing up in the days prior to the announcement of the merger. This finding violates of the efficient markets hypothesis. Multiple Choice the semi-strong form all

An investment of $ 1 1 9 , 0 0 0 was made by a business club. The investment was split into three parts and lasted for one year. The first part of the investment earned 8 % interest, the second 6 % , and the third 9 % . Total interest from the investments was $ 9 0 3 0 . The interest from the first investment was 3 times the interest from the

1. The Majestic Mulch and Compost Company (MMCC) is investigating the feasibility of a new line of power mulching tools aimed at the growing number of home composters. Based on exploratory conversations with buyers for large garden shops, MMCC projects unit sales as follows: The new power mulcher will sell for $120 per unit to start. When the

Calculate the following: The cost of equity if the risk-free rate is 2%, the market risk premium is 8%, and the beta for the company is 1.3. The cost of equity if the company paid a dividend of $2 last year and is expected to grow at a constant rate of 7%. The stock price is currently $40. The weighted average cost of capital (WACC) if the company

6 North Pole Cruise Lines issued preferred stock many years ago. It carries a fixed dividend of $7 per share. With the passage of time, yields have changed from the original 11 percent to 9 percent (yield is the same as required rate of return). a. What was the original issue price? (Do not round intermediate calculations. Round your answer to 2

Current Attempt in Progress Management of Sandhill Home Furnishings is considering acquiring a new machine that can create customized window treatments. The equipment will cost $ 3 0 8 , 5 5 0 and will generate cash flows of $ 1 0 1 , 7 5 0 over each of the next six years. If the cost of capital is 1 2 percent, what is the MIRR on this project? (