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What is the AA curve? Why does it have a negative slope? What factors cause it to shift?
Carefully explain how to determine the appropriate rate to discount the Net Cash Outflows in the typical Lease-Buy analysis. Next, explain the reason WHY this is the appropriate rate.
Would you expect the standard deviation of Fund q be less than 15%, equal to 15% or greater than 15%?
Find an article in the current financial press discussing working capital. Also, discuss how your company determines working capital.
Would it be irrational for it to have low-dividend, high -growth stocks in its portfolio? Would it be irrational for it to have municipal bonds in it portfolio? Explain.
The firm's CEO is deciding whether to issue debt or equity in order to raise the funds needed to finance an upcoming project. Which method of financing would you recommend? Why?
Find the comparable interest rate compounded monthly if it is 15% per year compounded quarterly.
A firm has two $1,000, mutually exclusive investment alternatives with the following cash inflows. The cost of capital is 6 percent.
Complete all parts of the problem and explain how you attained your outcome.
Currently, bonds of this particular risk class are yielding investors 9%. A cash shortage has forced you to instruct you to instruct your treasurer to liquidate the bond.
There is a 60 percent probability that long-term interest rates one year from today will be 13 percent, and a 40 percent probability that they will be 9 percent. Assume that if interest rates fall t
Assume you are considering investing in AAA corporate bonds. How does this information affect your analysis of that decision? Why?
They expect to see their dividend grow at a twenty percent rate for the next two years and then level out at a continuous six percent growth rate. City Food's required rate of return is twelve perce
The firm yesterday paid a dividend of $7.80. You have projected that dividends will grow at a rate of 9.0% per year indefinitely. If you want an annual return of 24.0%, what is the most you should p
Newport Printing paid a $2.50 dividend over the past year. During the coming year, the dividend is expected to rise by five percent, while the required return on stocks in this risk class is eleven
What is the firm's disbursement float, collections float, and net float?
Calculate the average number in the queue, average number in the system, average time in the queue, average time in the system, the system utilization rate, and the probability that the system is em
Demonstrate how you can use a TED (Treasury/Eurodollar) spread, which is a simultaneous long (short) position in a Eurodollar contract and short (long) position in the T-Bill contract, to create a p
Determine the effective price at which you purchased your sugar. How do you account for the difference in amounts for the spot and hedge positions?
Compare the returns on equity for the companies. Which company is best in a strong economy? In an average economy? In a weak economy?
Do you agree that long-term bonds are not riskier than short-term bonds (assume bonds by the same issuer)? If there is a difference in risk, what is the nature/type of that risk?
What are the fundamental factors that affect the general level of interest rates in the economy? How do each of these affect the cost of money? To what extent do these factors interact with each oth
The remaining $1,500 will be paid in three annual payments of $500 each, starting one year after the drawing. How much is this prize really worth at a 7 percent rate of return?
Your firm needs to raise $10 million. Assuming that flotation costs are expected to be $15 per share, and that the market price of the stock is $120, how many shares would have to be issued? What is
Assume that an investor sells short 200 shares of stock at $75 per share. At what price must the investor cover the short sale in order to realize a gross profit of $5,000? $1,000?