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Suppose that a 1 day 97.5% VaR is estimated as $13 million from 2000, observations. The 1-day changes are approximately normal with a mean of 0 and standard deviation of $6 million. Estimate a 99% c
If r0 = 0:02, what are the market portfolio return and variance? What are the corresponding weights (i.e. how much to invest in asset 1, asset 2, and the risk-free asset to get the market portfolio)
A company issued a 9% annual coupon bonds that are now selling at a yield to maturity of 10% and current yield of 9.8375%. what is the remaining maturity of these bonds?
Forward contract payout construct a delivery date profit or loss graph for a short position in a forward contract with a delivery price of $75.00. Analyze the profit or loss for values of the underl
If the firm were to enter into forward contract, demonstrate how this would be effectively lock in the firm's cost of fuel today, thus hedging the risk of fluctuating crude oil prices on the firm's
If sales increase by 10 percent to 11,000 units, by what percentage will each firms earnings after interest increase? To answer the question, determine the earnings after taxes and compute the perce
What is the expected capital gains (or loss) for the coming year? Is this yield dependent on whether the bond is expected to be called? please show your workppp.
Use a financial calculator to solve for the interest rate involved in the following future value of an annuity due problem. The future value is $57,000, the annual payment is $7,500, and the time pe
The marginal tax rate for the firm is 40%. Compute the relevant initial outlay in this capital budgeting decision.
How much cashflow is needed before tax and interest to satisfy debt holders and equity holders if tax rate is 40%, there is $10 million in Common stock requiring a 12% return and $6 million in bonds
A used machine costs$100,000 annually to run. What is the maximum that should be paid to replace the machine with one that will last 3 years and cost only $4,000 annually to run? The opportunity cos
What would be the approximate expected price of a stock when dividends are expected to grow at a 25% rate for 3 years, then grows at a constant rate of 7.5% if stock's require return is 15% and next
Determine the internal rate of return for the project (to the nearest tenth of one percent). a.12.0% b.12.6%c.3.6%.d.12.4%
Why do you believe that venture capital funding increased as much as it did during the 90s? What would you attribute to these types of gains?
What return should be expected from investing in the market profolio that is expected to yield 20% if the investment includes all of the investors funds plus 40% of additional funds borrowed at risk
calculate the weighted average of the expected returns of the individual stocks that make up the portfolio. Which return is higher?
What is the required Asset turnover for a firm with 10% profit margin, 75% equity, and 60% dividend payout that wishes to grow 8% without increasing financial leverage?
If the cost of common equity for the firm is 17.1%, the cost of preferred stock is 10.7%, the before-tax cost of debt is 8.8%, and the firm's tax rate is 35%, what is QM's weighted average cost of c
If the firm's tax rate is 30%, what discount rate should you use to evaluate the equipment purchase?
If the cost of common equity for the firm is 20.2%, the cost of preferred stock is 11.7% and the before tax cost of debt is 10.9 %, what is Jowers cost of capital? The firm's tax rate is 34%. Round
Determine the five-year equivalent annual annuity of the following project if the appropriate discount rate is 16%.
A project costs $101,000 and is expected to generate cash flows of $31,000 per year for the next 15 years. At what rate is the NPV equal to zero?
The firms marginal tax rate is 40%. What will the cash flows for this project be during year 3?
Depreciation is computed using MACRS over a 5-year life, and the cost of capitial is 9 percent. Assume a 40 percent tax rate. What will the year 1 operating cash flow for this project be?
It had $9,000 of bonds outstanding that carry a 7.0% interest rate, and its federal-plus-state income tax rate was 40%. How much was the firm's earnings before taxes (EBT)?