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The manager of Sensible Essentials conducted an excellent seminar explaining debt and equity financing and how firms should analyze their cost of capital.
What is the YTM of a level-coupon bond whose price is equal to the principal paid at maturity? For example, take a 5-year bond that costs $1,000, pays 5% coupon ($50 per year) for 4 years.
If the annualized 5-year rate of return is 10%, and if the first year"s rate of return is 15%, and if the returns in all other years are equal, what are they?
You are required to submit a research project that describes an organization (assigned or approved by the instructor), including the following criteria: basic legal, social, and economic environment
If the per-year interest rate is 10% for each of the next 5 years, what is the annualized total 5-year rate of return?
A leader in your firm has been studying the foreign exchange market for a number of years and believes that she can predict several of the foreign currency exchange rates relative to the U.S. dollar
Assume that the two-year holding rate of return is 40%. The average rate of return is therefore 20% per year. What is the annualized rate of return? Which is higher?
A project lost one third of its value the first year, then gained fifty percent of its value, then lost two thirds of its value, and finally doubled in value. What was the overall rate of return?
Although a promising two-year project had returned 22% in its first year, overall it lost half of its value. What was the project"s rate of return after the first year?
Calculate the payback period , Internal Rate of Return and NPV of the proposed mine. (Use of a spreadsheet program is recommended.) Based on these numbers, would you recommend that the company goes
What is this individual"s pension cost to you of hiring a 25-year old, who will stay with the company for 35 years? Assume a discount rate of 8% per year.
Define and compare the following theories: expectations theory, liquidity theory, market segmentation theory, and preferred habitat hypothesis theory.
What is the monthly payment on a 15-year mortgage for every $1,000 of mortgage at an effective interest rate of 6.168% per year (here, 0.5% per month)?
The contract terms state growth with the inflation rate, which runs at 2% per annum. The appropriate cost of capital is 14%. What is the value of this patenting contract?
In Britain, there are Consol bonds that are perpetuity bonds. What is the value of a Consol bond that promises to pay $2,000 per year if the prevailing interest rate is 4%?
We want to retire in 40 years, and we shall need $65,000 income per annum during our retirement which will last 35 years. We can save $60,000 annually during the first 9 years. We estimate that from
Under what interest rates would you prefer a perpetuity that pays $2 million a year to a one-time payment of $40 million?
What is the PV of a perpetuity paying $5 each month, beginning next month, if the monthly interest rate is a constant 0.5%/month (6.2%/year)?
Both firms sell 10,000 units of output at $2.50 per unit. The variable costs of production are $1, and fixed production costs are $12,000. (To ease the calculation, assume no income tax.) What is t
Do individual research on Walmart's strategy in China. Who has the better strategy for China, Walmart or Carrefour? Do a SWOT for each firm regarding the China market.
Would you classify the items below as equity or liabilities? State your reason(s) and any assumptions. Minority interest in consolidated financial statements.
Nova Restaurant was formed under the company JDRK. Originally there were four partners who each bought in and were given a percentage of ownership. Prior to opening, the partners brought in a fift
You hold $10,000 EIB7% 14.02.2015.Interest rates are flat at 6%. Calculate the price of the bond. Cupid Plc has a return on assets of 20% and distributes 40% of earnings as a dividend. At what rate c
Is there a relation between level of inventories and sales? Are inventories a function of sales? If there is a relation between inventories and sales, is it proportional?
What is the current ratio? What does the current ratio measure? What are reasons for using the current ratio for analysis?