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This assignment needs to consist of a portfolio analysis in a Microsoft Word document that is not to exceed three pages. You must also include your portfolio analysis in either Word or Excel. You mu
Price Industries has outstanding a $1,000 par-vaule bond with a 9% coupon intrest rate. The bond has 5 years remaining to its maturity date. If interest is paid annually, Find the value of the bond.
The firm has the option to renew the loan at market rates. Alternatively, ABC can sell 9.5 percent coupon bonds with a 2-year maturity and $1,000 par value at a price of $950.00. How many percentage
A firm has a current capital structure consisting of $400,000 of 12 per cent annual interest debt and 50,000 ordinary shares outstanding. The firm's tax rate is 40 per cent on ordinary income. If t
Calculating the Amount for an Emergency Fund. Beth and Bob Martin have a total take-home pay of $3,200 a month. Their monthly expenses total $2,800. Calculate the amount the couple needs to establi
Prudential, Inc. has unfunded pension liability of $650 million that must be paid in 20 years. To assess the value of the firm's stock, financial analyst want to discount this liability back to the
The preferred stock has a part value of 100. The yield-to-maturity on the debt is 9 percent. The source of company capital is 25% debt, 15% preferred stock and the rest from common equity. What is t
The ABC Corporation is considering a project which has an up-front cost paid today at t=0. The project will generate positive cash flows of $70,000 a year at the end of each of the next five years.
For both companies, calculate the effect on stock values for each period (ie March 31st and June 30th) and calculate the predicted return (normal) return for each period.
If the market interest rates, in gross bond-equivalent form, over the actual maturies of one and two years are respectively 4.54% and 8.00%, what is the market value of that share of stock today?
Several years ago the Haverford Company sold a $1,000 par value bond that now has 25 years to maturity and an 8.00% annual coupon that is paid quarterly. The bond currently sells for $900.90, and th
Describe some of the ethical considerations of a financial manager selling collateralized debt obligations, such as sub-prime loans, to elderly clients.
Ratzell's Place has a market-to-book ratio of 2.7, net income of $68,400, a book value per share of $37, and 45,000 shares of stock outstanding. What is the price-earnings ratio?
Lever Age pays an 8 percent coupon on outstanding debt with face value $10 million. The firm's EBIT was $1 million. What is times interest earned? If depreciation is $200,000, what is cash coverage?
Assume that Apple is selling for $180 per share. Apple implements one of the following stock dividends or stock splits, and no other change in the value of the firm occurs. What is the value of one
A firm's production function is , where stands for output, for labour, and for capital. The firm is a monopolist in the output market but it hires the inputs in perfectly competitive markets at cons
Suppose a firm is considering two mutually exclusive projects. One has a life of 10 years. Would the failure to employ some type of replacement chain analysis bias an NPV analysis against one of the
A company's perpetual preferred stock currently trades at $80 per share and pays a $6.00 annual dividend per share. If the company were to sell a new preferred issue, it would incur a flotation cost
Akyol Corporation is undergoing a restructuring, and its free cash flows are expected to be unstable during the next few years. However, FCF is expected to be $50 million in Year 5,
The Morrissey Company's bonds mature in 7 years, have a par value of $1,000, and make an annual coupon payment of $70. The market interest rate for the bonds is 8.5%. What is the bond's price?
Midwest Bank also offers to lend you the $25,000, but it will charge an annual rate of 8.3%, with no interest due until the end of the year. What is the difference in the effective annual rates char
What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $2,950 at the end of Year 4 if the interest rate is 5%?
Explain DuPont Analysis and then work through the following: What is the percent return on total market value? Does this appear to be an adequate return on the actual market value of the firm?
What are the net savings to the corporation if a bank agrees to provide a 270-day SLC for an up-front fee of 20 basis points to back the commercial paper issue?
Fancy Food, Inc. has issued a bond with par value of $1,000, coupon rate of 9 percent paid semi annually, and matures in 10 years. What is the value of the bond if the required rate of return is 12