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Suppose the spot and forward rates on the Norwegian Krone are Kr. 6.18and Kr. 6.30 respectively. The annual risk-free rate in the United States is 5 percent and the annual risk-free rate in Norway i
Joe purchase shares of Robotice Stock at $3 per share on 1/1/2009. Bill sold at $3.45 per share on 12/21/2009. Robotice stock has beta of 1.9 and the risk free of return is 4% and market risk premiu
Which of the following is not an advantage of international acquisitions over the establishment of a new subsidiary?
STC has issued 9%coupon bonds that are now selling at a yield to maturity of 10% and current yield of 9.8375%. What is the remaining maturity of these bonds?
An initial cash requirement of $187,400. The project will yield cash flows of $2832 monthly for 84 months. What is the rate of return on this project?
Calculate the fv of a 401-k into which you invest $5,000 per year for the next 30 years. Assume a 7% average annual rate of return on your investments.
You expect a share of stock to pay dividends of $1.00, 1.25, and 1.50 in each of the next 3 years. You believe the stock will sell for $20 at the end of the third years. What is the stock price if t
Lee Ann Inc., had declared a $5.60 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15%. New IRS regulations require that taxes be withheld when the dividend is pa
A seven year bond with an 8% coupon rate has a yield to maturity of 9.15 percent. What is the current bond price?
Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels o
A firm issued a 15-year, non-callable, 7.5% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bo
Purple Feet Wine, Inc., receives an average of $19,000 in checks per day. The delay is typically three days. The current interest rate is .019 percent per day. What is the company's float?
Discuss the merits of the valuation technique mentioned in this excerpt, with reference to the contents of the material we studied so far in the course. Base your discussion on the following questio
Given this statement, does overconfidence promote innovation? Discuss this statement and give examples of when overconfidence led to innovation and when it led to failure.
Explain in needed details. If you discuss specific strategies and or methods, cite the specific page(s) of your books as reference. In your discussion, make sure to cover both market efficiency issu
Security A has an expected return of 7%, a standard deviation of expected returns of 35%, a correlation coefficient with the market of -0.3, and a beta coefficient of -0.5. Security B has an expecte
A high proportion of current assets could be a sign that the company has a healthy working capital base. What are some of the reasons that a high proportion of funds should not be invested in curren
What is a ratio? How do ratios help alleviate the problem of size differences among firms? What does liquidity, long-term borrowing capacity, and profitability ratios measure?
Mergers are often justified by synergies, making the new, combined business more valuable than the individual parts. What are synergies? Briefly describe a potential revenue-enhancing synergy and tw
If the target company has 20 million shares outstanding and you want to purchase 100% of the shares, what is the maximum price per share you would be willing to pay? Why? Would you try to negotiate
The required rate of return on the stock is 12%, and the company recently paid a dividend of $2.50. a)calculate the present value of each dividend for years 1-5. b) calculate the stock price as of t
The market value balance sheet for Outbox Manufacturing is shown here. Outbox has a 25% stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that fo
What is the relationship between price (aka market value) and par value when the required return is lower than the coupon interest rate? What is the relationship between price and par value when the
Which of the following statements is TRUE regarding investment opportunities? Countries with strong investment opportunities should invest little at home and channel their savings into more producti