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A bond currently sells for $1,125, which gives it a yield to maturity of 8%. Suppose that if the yield increases by 23 basis points, the price of the bond falls to $1,102. What is the duration of th
A bond with a coupon rate of 22% makes semiannual coupon payments on January 15 and July 15 of each year. The Wall Street Journal reports the ask price for the bond on January 30 at 192:17. What is
What will be the approximate capital gain yield of this bond over the next year if its yield to maturity remains unchanged?
Assume that the annual interest rate on a six-month U.S. Treasury bill is 5 percent. Calculate the annual interest rate on six-month bills in
Suppose a company has a profit margin of 2.5% and an equity multiplier of 2.0. Its sales are $50,000. The common equity is $25,000. Compute its return on common equity (ROE).
Compute the price earnings (P/E) ratio given the following.
Describe whether you agree or disagree with the above statement. Make reference to the potential uses of both balanced scorecards and shareholder value analysis.
Suppose you pay $9,700 for a Treasury bill maturing in three months. What is the holding period return for this investment?
Determine the optimal debt level that maximizes the value of the firm and explain why the optimal debt level is not at a higher or lower debt level.
Assuming debt is risk-free, use the information given above to estimate the unlevered equity betas of each of the comparable companies.
An important advantage of having a central bank focus on a monetary target is that
The corporate tax rate is 30%. If the economy is strong, each firm will sell 2,000,000 gadgets. If the economy enters a recession, each firm will sell 1,000,000 gadgets. If the economy enters a rece
What will the effect be of each of these alternative offering prices on the existing price per share?
A bond issued by the State of Pennsylvania provides a 9 percent yield. What yield on a Synthetic Chemical Company bond would cause the two bonds to provide the same after-tax rate of return to an in
What is the incremental benefit (Cost) to the company of sugar coating the peels rather than selling them in their condition at the slit off point? What is the incremental benefits (costs) to the co
Compare other governments monetary policies to those of the Fed. Analyze and discuss the philosophical differences in controlling the supply of money using the M1 versus the M2 money supply measures
Find the Yield-to-Call on a Semiannual Coupon Bond with a Price of $1055, a Face Value of $1000, a Call Price of $1047.5, a Coupon Rate of 6.40%, 18 years remaining until Maturity, and 11 years rema
If a firm can shift its capital structure so as to change its weighted average cost of capital (WACC), which of the following results would be preferred?
State which currency appreciated and which depreciated over the last month, and then calculate both the percentage appreciation of the currency that rose in value and the percentage depreciation of
The common stock of Air United, Inc., had annual returns of 15.6 percent, 2.4 percent, -11.8 percent, and 32.9 percent over the last four years, respectively. What is the standard deviation of these
In addition, Project S can be repeated at the end of Year 2 with no changes in its cash flows. Project L has an expected life of 4 years with after-tax cash inflows of $5,200 at the end of each of t
Bell Curve, Inc., estimates the expected value and standard deviation of its total liability losses for the forthcoming year as $10 million and $3 million respectively.
Scholarships, for which no services were required, amounted to $2,500,000. Graduate assistantships, for which services were required, amounted to $2,300,000. The amount to be reported by the college
Assume a government is a special-purpose government engaged in only one governmental activity. Which financial statements would be required?
Beta Corp has an ROE of 15%; has just paid a divident of $1.50 and pays 10% of its earnings out in dividends, and the appropriate discount rate is 20%; what is the current stock price?