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What value for travel and setup costs would make the costs of the two alternatives the same?
Compare and contrast their policies on how much and how frequently they pay. Have they changed their policies in the recent past? Can you tell from their financial statements how their dividends hav
Company A has a beta of 0.70, while Company B's beta is 1.30. The required return on the stock market is 11.00%, and the risk-free rate is 4.25%. What is the difference between A's and B's required
Suggest how a financial analyst would determine if the reward of a given investment outweighs the risk. Support your argument with examples.
What is the yaer 0 project cash flow?c. What are the project's annual cash flows during years 1, 2, ,and 3? Should the maching be purchased? Explain your answer.
a. Calculate the past growth rate in earnings (5 years) b. The last dividend was D0=0.4($6.5)=$2.6. Calculare the next expected dividend D1 assuming that the past growth rate continues. b. What is B
Assume that the risks free rate increases but the mnarket risk premium remains constant. What impact would this have on the cost of debt? on the cost of Equity?
What would be the approximate expected price of a stock when dividends are expected to grow at a 25% rate for 3 years, then grow at a constant rate of 5%, if the stock's required return is 13% and n
How does compounding increase debt? Does it involve the compounding interest causing the debt to continue to rise or never seeming to go down if you only pay the minimum payments on the debt?
A Treasury bond that matures in 10 years has a yield of 4.5%. A 10-year corporate bond has a yield of 7.5%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk
A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)?
Currently, the firm has no debt but is considering borrowing $1.25 million at 8.5 percent interest. The tax rate is 36 percent. What is the value of the levered firm?
A Stock has produced returns of 11 percent, 18 percent, -6 percent,-13 percent, and 21 percent for the past 5 years, respectively. What is the standard deviation of these returns?
If the interest rate is 8%, what is the equivalent value of your 12-year annuity if paid in one lump sum five years from today?
A Treasury bond that matures in 10 years has a yield of 4.5%. A 10-year corporate bond has a yield of 7.5%. Assume that the liquidity premium on the corporate bond is 0.25%. What is the default risk
Your parents will retire in 28 years. They currently have $280,000, and they think they will need $1,250,000 at retirement. What annual interest rate must they earn to reach their goal, assuming the
You hope to buy your dream car four years from now. Today, that car costs $82,500. You expect the price to increase by an average of 4.8 percent per year over the next four years. How much will your
Ambrose Industries stock has an average expected rate of return of 13.6% and a standard deviation of 11.8%. What is the probability the stock will lose money more than 10% in any one year?
A bond currently sells for $1,050, which gives it an YTM of 6%. Suppose that if the yield increases by 25 bps, the price of the bond falls to $1,025. What is the duration of this bond?
How much less could you have deposited last year if you could have earned a fixed rate of 6.5 percent and still have the same amount as you currently will when you retire 38 years from today?
What will be the profit/loss on this position if IBM is selling at $87 on the option maturity date? What if IBM is selling at $95? The call sells at $5.50 and the put sells at $1.55.
The risk-free rate of return is 10%, the required rate of return on the market is 15%, and High-Flyer stock has a beta coefficient of 1.5. If the dividend per share expected during the coming year,
The initial investment will require $96,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 6-year life of the project. The company has a margin
Adelson's Electric had beginning long-term debt of $42,511 and ending long-term debt of $48,919. The beginning and ending total debt balances were $84,652 and $78,613, respectively. The interest pai