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You are offered two alternatives: a share of preferred stock which pays you 40 dollar per year [but the actual payments are made quarterly] for ten years; How many bonds have to offer to you for
Apple Computers announced the brand new iPod Touch after market close on September 12, which the market had no knowledge of prior to the announcement. Determine the Apple’s price at 9:30 on
Walt Disney issued a 1,000 dollar 5 year corporate bond at par. It will pay 35 dollar in interest every 6 month. What price should the existing bond is traded at when the new 5 year bond issued?
GROWTH, Inc.’s next year earning is expected to be 4 dollar per share. The company pays out half of its earning as dividend. Both dividends & earnings are expected to grow by 10 percent a ye
Calculate the duration of a bond that makes 6 percent annual coupon payment with,
Assume that you have only 3,500 dollars available at period 0. Neither additional budgets nor borrowing are allowed in any future budget period. Determine the future worth (the total amoun
You are a risk-averse investor who is considering investing in one of the two economies. Which economy would you choose to invest in?
Consider an economy with two types of firms, S and I.S firms all move together. Determine the volatility [standard deviation] of a portfolio that consists of an equal investment in 20?
Miner Industries develops an open pit uranium mine and is required to restore the mine area to a natural state at the end of the mine’s useful life of eighteen years. Determine the present
What should Peterson Music pay for the copyright if they want to earn eleven percent per year on their investment?
John Smith has received 291,366 dollar as compensation for a work accident and deposits this in an account earning a guaranteed return of six percent. What is the maximum John can withdrew each year.
Assume you buy a five-year zero-coupon Treasury bond for $800 per $1000 face value. Suppose annual compounding throughout the problem. Determine the yield to maturity on the bond?
For each of the bonds and reinvestment rates listed below compute the amount of money accumulated at the end of 1,000 dollars initial investment: Compute the value of the bond
Tiger Travel agrees to buy a new aircraft. They can either pay 12,500,000 dollars today, given an annual rate of interest of 9 percent which option should Tiger Travel take.
Zombie Industries issues 400,000 face value dollars, 8.5 percent coupon, fifteen year bonds on January 1, 2008. Interest is paid yearly on December 31. Calculate the book value of these bond
Calculate the return on investment for the investment center?
Calculate the corporation's residual income.
South Side Corporation is expected to pay the following dividends over the next 4 years: $8, $6, $3, and $2. Estimate the present share price?
Hollin Corporation stock currently sells for 50 dollars per share. Estimate the most recent dividend per share paid on the stock.
The Brennan CO. just paid dividend of 1.40 dollars per share on its stock. The dividends are expected to grow at a constant rate of 6% per year indefinitely. Determine the current price and what
The next dividend payment by MUG, Inc., will be 3.10 dollars per share. If MUG stock currently sells for 48 dollars per share, determine the required return?
Gruber Corp. pays a constant 12 dollars dividend on its stock. If the required rate on this stock is 10 percent, determine the current share price.
Assume the yield to maturity on a one year zero coupon bond is eight percent. According to the Expectations Hypothesis, determine the expected one-year rate in the market place for year 2?
Assume the price of a two year Treasury strip is 950 dollars & the price of a Ford zero-coupon note of a similar maturity is 900 dollar. Par is 1,000 dollars for both securities. Compute the yield
Compute GM's Z-score based on the given data: X1 = —0.049, X2 = 0.0289, X3 = 0.02, X4 = 0.036, X5 = 0.409.