• Q : Determining duration of the portfolio....
    Finance Basics :

    ABC company invests $2,000 in an 8-year zero-coupon bond and $4,000 in a 10-year zero-coupon bond. What is the duration of the portfolio?

  • Q : Favor of using electronic money....
    Finance Basics :

    Write a 2 to 3 pages paper answering the following questions: Do you think we will see a dramatic drop in the use of paper currency in favor of electronic money in the next five years? Yes or no. Ar

  • Q : Advantages and two disadvantages of joint ventures....
    Finance Basics :

    What are two advantages and two disadvantages of joint ventures? How do joint ventures and strategic alliances differ from mergers and acquisitions?

  • Q : Segments of the natural gas industry....
    Finance Basics :

    What are some of the efficiencies to be gained by the linkage of the assets of natural gas companies, such as pipelines and electric utilities? What are some of the segments of the natural gas indus

  • Q : Ear of the lower cost source....
    Finance Basics :

    Boles buys from its suppliers on terms of 3/10, net 90, and it currently pays on Day 10 and takes discounts, but it could forgo discounts, pay on Day 90, and get the needed $500,000 in the form of c

  • Q : Computing value of european call option....
    Finance Basics :

    Calculate the value of a European call option on the index with an exercise price of $50 by using one-period binomial model. Suppose that the market price of the call option considered in question a

  • Q : Convexity and the duration of the bond....
    Finance Basics :

    A newly issued bond has a maturity of 2 years and pays semiannual coupons at annual rate of 7%. The par value of the bond is $1,000 and it sells at par. What are the convexity and the duration of th

  • Q : What is operating leverage....
    Finance Basics :

    What is operating leverage? How, if at all, is it similar to financial leverage? If a firm has high operating leverage, would you expect it to have high or low financial leverage? Explain your reaso

  • Q : Computing discounted payback period....
    Finance Basics :

    An investment project has annual cash inflows of $3,200, $4,100, $5,300, and $4,500, and a discount rate of 14 percent. What is the discounted payback period for these cash flows if the initial cost i

  • Q : Net initial investment-annual cash flow-terminal value....
    Finance Basics :

    The week long training seminar will be held in Toronto and will cost $10K. Net working capital will increase $40K. We think we can sell the new equipment for $75K in five years. What is the net init

  • Q : Firm after-tax component cost of debt....
    Finance Basics :

    A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $777.96. The company's tax rate is 40%. What is the firm's after-tax component cost

  • Q : Net initial investment-annual cash flows-terminal value....
    Finance Basics :

    After seven years it is estimated that the machine will have a salvage value of $25,000. The firm has a marginal tax rate of 40%. What are the net initial investment (CF0), annual cash flows, and th

  • Q : History of mergers and acquisitions....
    Finance Basics :

    Choose two (2) public corporations in an industry with which you are familiar - one (1) that has acquired another company and operates internationally and one (1) that does not have a history of mer

  • Q : Domestic and international financial marketplace....
    Finance Basics :

    Compare and contrast the domestic and international financial marketplace. Explain how specific characteristics of each one impact financial management. Provide an example to support your response.

  • Q : Determining stock current price per share....
    Finance Basics :

    What is the stock's current price per share (before the recapitalization)? Round your answer to the nearest cent. Assuming that the company maintains the same payout ratio, what will be its stock pric

  • Q : Estimating holding period return....
    Finance Basics :

    Assuming that the market price of Home Depot stock rises to $75 per share by the expiration date of the option, what is the call holder's profit? What is the holding period return?  

  • Q : Estiamting average collection period....
    Finance Basics :

    How many days, on average, does it take Mario's to sell its inventory? What is the average collection period? What is the operating cycle

  • Q : What is the shortfall risk....
    Finance Basics :

    A portfolio manager is concerned about not keeping up with the rate of inflation. His portfolio has a mean return of 9% with a variance of 144. If the inflation is expected to be 3.5% what is the sh

  • Q : Determining real and after tax return....
    Finance Basics :

    If the average rate of inflation during the 7 yeas is 2.5%/year during the 7 years, and you anticipate being in the 20% tax bracket for the first 3 years, and 40% for the next 4 years, what is your

  • Q : Validity of decision process for distribution policy....
    Finance Basics :

    Evaluate the validity of the decision process for distribution policy and dividend policy. Discuss all the factors that influence this decision process in question.

  • Q : Prepare income statement-cash flow statement....
    Finance Basics :

    Prepare an income statement and cash flow statement. Devise three alternative scenarios concerning the motel project. Make one variable an average occupancy rate percentage. You are free to choose m

  • Q : American style and european style option....
    Finance Basics :

    Explain the difference between an American style and a European style option. Which style option has the greater value and why?

  • Q : Reasonable value for convertible bonds....
    Finance Basics :

    Use this data to estimate an appropriate yield on straight-bonds issued by the firm. Estimate a reasonable value for these convertible bonds, based on the information that you have collected.

  • Q : Summary of the purchasing power parity....
    Finance Basics :

    Provide a summary of the purchasing power parity (PPP), interest rate parity (IRP), and the international Fisher effect (IFE). Explore the relative validity of the above theories in determination of

  • Q : Types of commercial bank charters....
    Finance Basics :

    List three types of commercial bank charters and indicate which federal agency has primary regulatory responsibility for each. List three broad categories of consumer protection laws in banking and gi

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