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Consider a bond with a face value of $1,000, a coupon rate of 6%, a yield to maturity of 8%, and ten years to maturity. Please calculate this bond's duration and volatility.
The continuously compounded risk-free interest rate is 6% per annum, and the volatility of the stock price is 30% per annum. Use the Black-Scholes-Merton model to determine the price of a 3-month Eu
Calculate the growth rate in dividends. Calculate the expected dividend yield. Assuming that the calculated growth rate eqs is expected to continue, you can add the dividend yield to the expected gro
In defense of the education budget, which the budget director has said must be reduced by half or more, Develop an argument for keeping the education budget as possible.
The original form of the Modigliani and Miller Capital Structure Theorem
A stock has an expected return of 12.4 percent, its beta is 1.17, and the risk-free rate is 4.2 percent. What must the expected return on the market be?
The basic purpose of financial reporting is to:
Evaluate the sensitivty of your bas-case NPV to changes in fixed costs. What is the cash break-even level of output for this project (ignoring taxes)? What is the accounting break-even level of output
In the United States, GAAP for investments in debt instruments require companies to recognise unrealized gains and losses on investments in trading securities in the income statement.
Discuss Walmart capital structure and their cost of capital. Has their capital structure or cost of capital changed much over the past 2 years? Explain the reasons for the change.
"Analyze the relationship between risk and rate of return, and suggest how you would formulate a portfolio that will minimize risk and maximize rate of return.
Create a business scenario that exemplifies the time value of money that includes a level of risk. Discuss the pros and cons of annuities when compared with other financial instruments and whether t
Assume there are liabilites atached to each item of property distributed, but the amount of such liability is less than the fair market value and the tax basis of the property.
The annual risk-free rate is 6.0%, based on daily compounding. A 1-year call option on the stock, with an exercise price of $22, is available. Based on the binominal model, what is the option's valu
The preparation of pro forma financial statements accomplishes which of the following objectives?
Peter's Motor Works has total assets of $689,400, long-term debt of $299,500, total equity of $275,000, net fixed assets of $497,800, and sales of $721,500. The profit margin is 4.6 percent. What is
Currently, the spot price of gold is $922, and the risk-free rate and the rate of storage cost are 8% and 3% per annum, respectively. Both rates are continuously compounded. What is the value of the
His financial advisor thinks he can earn 7% annually before his retirement and 10% after his retirement. How much does he need to invest at the end of each quarter to prepare for his financial needs
Rick and Stacy learn that if they borrow from the boat dealership, the interest will not be tax deductible. However, the interest on the second mortgage will qualify as being tax deductible on thei
Duggins Veterinary Supplies and issue perpetual preferred stock at a price of $50.00 a share with an annual dividend of $4.50 a share. Ignoring flotation cost, what is the company's cost of preferr
Under which of the following conditions would the percent-of-sales method of financial forecasting be most accurate?
You expect KT industries (KTI) will have earnings per share of $3 this year and expect that they will pay out $1.50 of these earnings to shareholders in the form of a dividend. KTI's return on new i
What assumption about the future composite rate of interest on an adjustable rate mortgage is made when determining the APR for federal truth-in-lending disclosures? Is this a fair and accurate assu
You bought one of Dxzilla Enterprise's 8 percent coupon bonds one year ago for $1,045.30. These bonds make annual payments and mature nine years from now.
Burnwood Tech plans to issue some $60.00 par preferred stock with a 6%. The similar stock is selling the market for $70.00. Burnwood must pay flotation costs of 5% of the issue price. What is the co