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First National Bank pays 6.2% interest compounded semiannually. Second National Bank pays 6% interest, compounded monthly. Which bank offers the higher effective annual rate?
You take out a 30 year $100,000 mortgage loan with an APR of 6% and monthly payments. In 12 years, you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?
Last year Handorf-Zhu Inc. had $850 million of sales, and it had $425 million of fixed assets that were used at only 60% of capacity. What is the maximum sales growth rate the company could achieve
The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future.
The second is a preferred stock ($100 par value) that sells for $80 and pays an annual dividend of $12, and your required rate of return on it is 14%.
Rick Thomas Corp. just issued a dividend of $2.40 per share on its common stock. The company is expected to maintain a constant 5.5% growth rate in its dividends indefinitely. If the stock sells for
Preferred stock XYZ Corporation issued at par for $50 per share. If stockholders are promised an 8% annual dividend, what was this talks dividend yielded at the time of issue if the stock market pri
If the machine has no salvage value at the end of six years and the discount rate used by James is 8%, then the machine"s internal rate of return is closest to.
This delivery service is expected to generate net cash inflows of $6,000 per year in each of the 8 years. Apnea"s discount rate is 14%. What is the net present value of this investment oppo
What amount of cost savings will this equipment have to generate per year in each of the 10 years in order for it to be an acceptable project?
By how much would the annual cash inflows from this project have to increase in order to have a positive net present value?
Par value of a bond is $1000, maturity of 12 years and a coupon rate of 8%. The yield to maturity is 10%. Calculate the value of the bond if interest is paid on an annual rate versus an semi-annual
It will cost $6,000 to acquire an ice cream cart. Cart sales are expected to be $3,600 a year for three years. After the three years, the cart is expected to be worthless as the expected life of the
The following data pertain to an investment project: The internal rate of return is?
GD has a beta of 0.8. The yield on a 3-month T-bill is 4% and the yield on a 10 year T bond is 6%. The market risk premium is 5.5% and the return on an average stock in the market last year was 15%.
Explain the law of one price and the theory of purchasing power parity. Why doesn"t purchasing power parity explain all exchange rate movements? What factors determine long-run exchange rates?
GD has a target capital structure of 40% debt and the 60% equity. The yield to maturity on the companys outstanding bonds is 9% and the companys tax rate is 40%. GD's CFO has calculated the companys
Holdup Bank has an issue of preferred stock with a $6 stated dividend that just sold for $96 per share. What is the bank's cost of preferred stock?
As the relative expected return on dollar assets increases, foreigners will want to hold more ________ assets and less ________ assets, everything else held constant.
McDowell Industries sells 3/10 net 30. Total sales for the year are $912,500. Forty percent of the customers pay on the tenth and take discounts; the other 60% pay on average 40 days after their pur
In the domestic interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to depreciate, everything else held constant.
Suppose a 10 year bonds issued with annual coupon rate of 8% when the market rate of interest is also 8%. If the market rate raises 9%, what happens to the price of this bond?
Evidence from the United States during the period 1973-2002 indicates that the value of the dollar and the measure of the ________ interest rate rose and fell together.
Suppose a company had $8 million net income for year 2010, and paid out dividends of $0.5 per share. The company has 10 million shares outstanding. If the company had $32 million retained earning at
The condition that states that the domestic interest rate equals the foreign interest rate minus the expected appreciation of the domestic currency is called.