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Warr Corporation just paid a dividend of $1.25 a share (that is, D0 = $1.25). The dividend is expected to grow 10% a year for the next 3 years and then at 3% a year thereafter.
Find or make a graph of interest rates over the last 30-40 years. What do you see? Do you think interest rate risk or reinvestment risk is a bigger problem for today's bond investors?
Peleh writes a put option on Japanese yen with a strike price of $0.008/Yen at a premium of 0.0080cents per yen and with an expiration date six months from now.
On the same graph, plot the approximate yield curve would of a much riskier lower-rated company with a much higher risk of defaulting on its bonds.
It is now December 31, 2011 (t = 0), and a jury just found in favor of a woman who sued the city for injuries sustained in a January 2010 accident. She requested recovery of lost wages plus $850,000
Yahoo is $33 a share. you decide to buy 10 april 38 call options (premium of $2.00). if yahoo goes up to $42 a share by april, what will your total net gain or loss on the transaction?
You want to have $1 million in real dollars in an account when you retire in 30 years. The nominal return on your investment is 9 percent and the inflation rate is 4 percent.
Your uncle plans to leave you an inheritance of $200,000. if his life expectancy is twenty years,and the annual rate of interest is 9 percent ,what is the inheritance currentky worth?
Assume a for-profit skilled facility chain has a target capital structure that is 40% debt and 60% equity. Assume the chain plans to finance a new project with 50% debt and 50% equity.
Investors expect the market rate of return this year to be 12.50%. The expected rate of return on a stock with a beta of 0.9 is currently 11.25%.
You believe you will need to have saved $600,000 by the time you retire in 40 years in order to live comfortably. If the interest rate is 7% per year, how much must you save each year to meet your r
Patience, Inc., just paid a dividend of $2.35 per share on its stock. The dividends are expected to grow at a constant rate of 4.5 percent per year, indefinitely. Assume investors require an 11 perc
Use the empirical rule to determine the following: A About 68% of the observations lie between what two values? B About 95% of the observations lie between what two values? C About 99% of the obser
A two-year zero-coupon Treasury bond with a maturity value of $1,000 has a price of $873.4387. A one-year zero-coupon Treasury bond with a maturity value of $1,000 has a price of $938.9671.
You plan to invest an amount of money in five-year certificate of deposit (CD) at your bank. The stated interest rate applied to the CD is 12 percent, compounded monthly. How much must you invest if
JoJo's portfolio's return is 12%. She is invested in Cisco and IBM which had returns of 15% and 9% respectively. What percentage of JoJo's assets are invested in each firm?
Assume there are two securities. Security one is Gold and security two is Ford. Their return and risk is as follows: r1 = 0.031 s1= 0.158 r2 = 0.095 s2= 0.237
Richmond Clinic has obtained the following estimates for its costs of debts and equity at various capital structures: Percent Debt After-Tax Cost of Debt Cost of Equity 0% -- 16.0% 20% 6.6% 17.0% 40
On Friday, December 10, Gatter Electric Co.'s board of directors declared a dividend of 75 cents per share payable on Wednesday, January 18, to shareholders of record as of Wednesday, January 4.
If Trans World stock currently sells for $42 per share and a 1 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
Tanner Inc. needs to raise $73 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds.
A real estate agent has 10 properties that she shows. She feels that there is a 10% chance of selling any one property during a week. The chance of selling any one property is indepedent of selling
A $1000 bond with a coupon rate of 5.4% paid semiannually has five years to maturity and a yield to maturity of 7.5%. If interest rates rise and the yield to maturity increases to 7.8% what will hap
Consider a 30-year mortgage at an interest rate of 12% compounded monthly with a $900 monthly payment. What is the total amount paid in interest?
Blasco's has a market value equal to its book value. Currently, the firm has excess cash of $1,332, other assets of $11,674, and equity of $7,200. The firm has 600 shares of stock outstanding and ne