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You are interested in buying the preferred stock of a bank that pays a dividend of $1.80 every quarter. If you discount such cash flows at 8 percent, what is the value of this stock?
Estimate the dividends for the next five years. Compute the present value of these dividends if the required rate of return is 14 percent.
The firm last paid a dividend of $3.56. If you require a rate of return of 13 percent, what is the current value of this stock to you?
You normally require a return of 14 percent on stocks of similar risk. Is the stock overpriced, underpriced, or correctly priced?
The process requires new machinery that would cost $1,968,450, have a life of five years, and would produce the cash flows shown in the following table. What is the NPV if the discount rate is 15
The company is not expected to increase its dividends for the next several years. If your required rate of return for such firms is 13 percent, what is the current value of this company"s stock?
If your required rate of return is 14 percent, what is the maximum price that you would be willing to pay for this company"s stock?
If you deposit $10,000 in a bank account that pays %10 interest annually, how much would be in your account after 5 years?
If the opportunity cost for an investor is 8.25 percent, what is the maximum price that she should be willing to pay for this bond?
Jackson corporations bonds have 12 yrs remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%.
Assume a required rate of return of 10 percent. Compute the expected dividends for the next three years and also the present value of these dividends.
Assume you are given the following relationships for the Brauer Corp.: Sales/total assets 1.5x; Return on assets (ROA) 3%; Return on equity (ROE) 5%. Calculate Brauer's profit margin and debt ratio
If the current market rate is 8.5 percent and the bonds make annual coupon payments, what is the current market value of one of these bonds?
The entire amount is invested at a rate of 10% and he ecpects to recieve 150 equal monthly payments. The first payment is expected in 2 years. Find the size of the payments.
Kim Sundaram recently bought a 20-year zero coupon bond that compounds interest semiannually. If the current market rate is 7.75 percent.
Fama's Llamas has a weighted average cost of capital of 9.8 percent. The company's cost of equity is 15 percent, and its cost of debt is 7.5 percent. The tax rate is 35 percent. What is Fama's debt
What is the difference between the risk-free and risky interest rate is called?
The five-year Treasury rate is currently 5.65 percent. The firm also faces a marketability risk premium of 0.80 percent. What is the total borrowing cost to the firm?
Calculate the following performance measures for portfolio P and the market: Sharpe, Jensen (alpha), Treynor, information ratio.
A firm is evaluating a proposal which has an initial investment of $45,000 and has cash flows of $5,000 in year 1, $20,000 in year 2, and $15,000 in year 3 and $10,000 in year 4. How long is the pay
What are the arithmetic and geometric average time-weighted rates of return for the investor? What is the dollar-weighted rate of return?
Calculate the time-weighted geometric average return on this "portfolio." Calculate the time-weighted arithmetic average return on this portfolio.
You reckon that it will produce an inflow after operating costs of $170,000 a year for 10 years. If the opportunity cost of capital is 14%, what is the net present value of the factory?
You will receive a $100,000 inheritance in 15 years. Your investments earn six percent per year, compounded annually. To the nearest hundred dollars, what is the present value of your inheritance?
Corporations that issue bonds are able to deduct the coupon interest payments on their income statement. Where on the income statement is the deduction, and is this deduction good for economic grow