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Treasury bonds with 5-year maturities offered a return about 8.65%; face value of $1,200; and 7.25% coupon rate. What would be the present value of this bond?
What is your personal discount rate or rate of preferences? I.e. how much would you pay for a promise of $1000 to be received one year from now?
Required: What coupon rate should the bonds have in order to sell at par value?
Explain the benefits of cash-flow analysis and any problems that could arise if it is not conducted.
Question: A firm has the following investment alternatives: Which investment should be considered? Use a 10.5% discount rate.
What does it take to determine the present value of an investment? How would you project the future cash flows?
How do I calculate the value of a share if the required return on the company's shares is 12%?
Evaluate and rank each alternative based on: a. payback period b net present value (use a 10% discount rate) c. internal rate of return
Identify appropriate industry comparisons for the company and develop a fundamental analysis of the company using the analytical tools
What is the trend of Net Income over the last three years? What is the trend of Cash Flow from Operating Activities over the last three years?
There are many different valuation models. What are some of them and how are they used to value an asset or business entity?
Determine the balance in the retained earnings account after the stock dividend.
Preston Corporation is evaluating its potential investment in a $225,660 piece of equipment with a 3 year life and no salvage value.
Determine the present value of the mixed stream of cash flows using a 5% discount rate.
You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are:
What is the NPV of the project if the required rate of return is 12%?
a. What is the cost of common equity? b. What is the WACC?
What were total expenses for 2007. What were total expenses for 2007, assuming all expenses except depreciation were cash expenses
Contrast the Capital Asset Pricing Model (CAPM) with the Discounted Cash Flows Method (DCF).
What will be the company's ending cash balance after financing at the end of June?
You are considering two investments from the bonds listed in the question above. Show that the cash flows from the following two investments
Question: Discuss capital budgeting and bond refunding.
The yield to maturity on the bonds is 12 percent annual interest. There are 15 years to maturity. Compute the price of the bonds.
Evaluate the projects using risk-adjusted discount rates. What is the NPV for each project?
You are considering two mutually exclusive projects with the following cash flows. Which project(s) should you accept if the discount rate is 8.5 percent?