Q: Regarding the trade-off theory, capital structure is a trade-off between: O tangible and intangible ...
A: The capital structure refers to the mix of various available sources of capital which is used by a f...
Q: Maria invested part of her P800,000.00 in an investment earning 12% per annum while the remaining at...
A: Solution:- When an amount is invested somewhere, it earns some interest on it and that’s why every r...
Q: Reddie, Mcdonald & Griffiths Inc. has a risk-free rate of 5% and a market risk premium of 8%. The co...
A: Given, Two investments X and Y The risk free rate is 5% and market risk premium is 8%.
Q: Find the present value of an ordinary annuity which has payments of $1400 per year for 11 years at 6...
A: Annual payment (P) = $1400 Interest rate (r) = 6% Number of annual payment (n) = 11
Q: el, and September futures are trading at $5.66 per bushel. What approximate purchase price per bushe...
A: The goal of using futures as part of a hedging strategy is to reduce the risk of losing money owing ...
Q: minimizes the financial distress costs. equates the present values of the incremental interest tax s...
A: In finance trade off theory refers to that theory in which a company determines how much debt and eq...
Q: If i put in $500 a month which pays daily interest rate of 1% p.a., how much will I have at the end ...
A: Interest is the amount of fee paid to an investor or depositor for providing funds. It is the compen...
Q: Assets (in KD) Liabilities (in KD) Cash 20000 Accounts payable 80000 Accounts receivable 100000 Accr...
A:
Q: You have just taken out a $16,000 car loan with a 8% APR, compounded monthly. The loan is for five y...
A: Payment per period can be calculated using PMT function in excel. PMT(rate, nper, pv, [fv], [type]...
Q: Analyze and discuss the entire Philippine financial system, specifically the banking and non-banking...
A: Financial system is referred as the set of an institutions like - insurance companies, stock exchang...
Q: A student decides to make annual payments of Php 1619 into a bank that has a nominal interest of 4% ...
A: Formula Future value = P*((1+i)n-1)/i Where P = Annual payment i.e. Php 1619 i = Annual interest rat...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery ...
A: Cost of equity refers to the return that is required if an investment is made either by a company or...
Q: Garrick is purchasing equipment for his job as a builder. The equipment costs $1000 and he wants to ...
A: The loan which is discharged by making installment payments consist of two components as interest mo...
Q: Individual Assessment 1.a: Simple Ordinary Annuity Directions: Calculate the future value of #1, 2, ...
A: Future value includes the deposits made and the interest accumulated and present value includes the ...
Q: Only 5 min left, please do fast , f an Investment of $5000 will grow to $8000 in four years with qua...
A: The effective annual rate(EAR) provides the interest amount charged for one year equal to nominal in...
Q: 23. A company is considering two mutually exclusive projects. Both require an initial cash outlay of...
A: The NPV(net present value) and IRR are the values determined for comparing the available projects fo...
Q: a. What is the APR on this loan? (Do not round intermediate calculations and enter your answer as a...
A: Effective annual rate (EAR) refers to a real interest rate which an investor is expect from his inve...
Q: A music composer deposits $5,000 into an investment that earns an annual interest rate of 5.8%. If t...
A: Nominal interest rate = 5.8% Inflation rate = 1.7%
Q: Define time-series analysis
A: Time series analysis is an important technique used in statistics in finance. It has been defined in...
Q: Analyze the following accounts and satisfy the requirements given below. Accounts payable Accrued ex...
A: Fist we need to prepare balance sheet for calculation of requirements. The balance sheet equation is...
Q: 8. (6) If RL equals 5%, what is the preferred investment using Roy's safety-first criterion for the ...
A: Roy's safety first criterion: Roy's safety first criterion sets a threshold limit based on an invest...
Q: Fritz buys a car costing $24,300. He agrees to make payments at the end of each monthly period for 8...
A: A loan is an agreement between two parties where a sum is forwarded in return for periodic payments ...
Q: Consider a loan of $7700 at 6.8% compounded semiannually, with 18 semiannual payments. Find the foll...
A: Given here , p= $ 7700 r= 6.8% t= 18 months n= 2 (compounded annually)
Q: You borrow $5000 now and agree to pay this whole amount back in three payments: Payment 1. SX in 3 m...
A: The value of a certain amount of money at current time will not be the same as value of same amount ...
Q: Choose from the two machines which is more economical: Machine B 14000 P2,000 2,400 Machine A First ...
A: You have asked to specifically calculate part c. Concept . Present worth cost method. In this me...
Q: If Rochelle obtained a business loan of $205,000.00 at 4.67% compounded semi-annually, how much shou...
A: Business loan = $205,000.00 Interest Rate = 4.67% compounded semi-annually Time Period = 30 Years
Q: What are the four different markets in a foreign exchange market
A: There are different types of foreign exchange markets. This depends on the underlying characteristic...
Q: Balance sheet Assets (in KD) Liabilities (in KD) Cash 263854 Accounts payable 80000 Accounts receiva...
A: Solution:- Quick ratio measures the ability of the company that how efficiently the company can pay ...
Q: Save The Simpson Company invested $20000 in a fund that was earning interest at a rate of 5% compoun...
A: Given data, Investment p = $20000 Rate of interest r = 5%= 0.05 compounded semi annually, so, n=2 T...
Q: Royal Dutch Shell PLC (ticker: RDS) is a large, multinational oil company. The firm is preparing to ...
A: Solution:- When an asset is put into use, its value gets decreased due to wear and tear. This wear a...
Q: Wade Ellis buys a car for $16,278.13. He puts 10% down and obtains a simple interest amortized loan ...
A: Given, The loan amount is $16,278.13 Down payment is 10%Rate of interest is 11.5%.
Q: Name two risk management models and how any of them can resolve an operational risk problem.
A: Risk management is that the process of recognising, analysing, and accepting or mitigating uncertain...
Q: Gentrix Inc. has two major sources of financing—common stock and long-term debt. They currently have...
A: Here,
Q: Mr. Daniel also ask you to evaluate the potential of developing several hundred stores into new stor...
A: Since question involves multiple sub parts , We will answer 1st sub 3 parts for you as per prescribe...
Q: A stock has a beta of 1.1, the expected return on the market is 10.4 percent, and the risk-free rate...
A: Expected return = Risk free rate+Beta*(Market return-Risk free rate) Where Risk free rate = 4.75% Be...
Q: A sum of P1,000 is invested now and left for eight years, at which time the principal is withdrawn. ...
A: The fee paid to a lender or depositor for depositing funds is called interest. This interest is paid...
Q: What is the yield to maturity? Round your answer to two decimal places. % What is the yield to ca...
A: Yield To Maturity: It refers to the expected rate of return for the bondholder if the bond is held ...
Q: A couple who borrow $60,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of ...
A: Loan is a value which is borrowed from external sources like banks and this amount is repaid later i...
Q: Trade off Theory states that:
A: The capital structure of a company can be defined as the proportion of debt and equity used by a com...
Q: Bronze, Inc has sales of $58,200, costs of $25,300, depreciation expense of $3,100, and interest exp...
A: Operating Cash Flows = Earning before interest & tax + Depreciation - Taxes
Q: "Ten years ago, when Nigel was still a college student, he deposited 10,000 in a bank. The bank's ra...
A: Deposit amount (P) = 10,000 Period = 10 Years Quarterly period (n) = 10*4 = 40 Interest rate = 2% Qu...
Q: 1- The Present value (Now). 2- The Future value (at year-5)|
A: Time value of money (TVM) is used to measure the value of money at different point of time in the fu...
Q: Other things equal, which of the following will decrease the WACC of a firm that has both debt and e...
A: The Weighted Average Cost of Capital and Capital Structure both are important factors in an organiza...
Q: The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000...
A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first ...
Q: 2. A financial manager must choose between three alternative investments. Each asset is expected to ...
A: Wealth maximization is the concept of maximizing the value of the shares held by the shareholder, to...
Q: If a student's time value of money rate is 24%, then the student would be indifferent between $77 to...
A: Interest rate (r) = 24% Present value (PV) = $77 Period (n) = 1 year
Q: OA. three O B. five OC. four O D. six
A: Investment appraisal methods are used to determine the feasibility of investment whether they are fi...
Q: Is bond financing risky or safe for a company? Explain in details. Why bond investing safer for inve...
A: Bond financing is a sort of long-term borrowing that is Particulary used by various state and centr...
Q: If a bank has quarterly deposit interest expense of $1MM, an average deposit portfolio of $3.2Bn and...
A: Solution:- Interest bearing deposit cost for bank means the bank’s interest expense for its interest...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: Given: Cost of machine = $80 Million Working capital = $20 Million Tax rate = 30%
OPTIONAL: D1 Numerator
OPTIONAL: D1 Denominator
OPTIONAL: D1
OPTIONAL: N of D1 (four decimals)
Step by step
Solved in 2 steps with 3 images
- Question 3 The table below provides the end-of-year share prices (in GB pence) for Centrica plc and National Express Group plc the end-of-year values for the FTSE 100 Index, which is a proxy for the market portfolio, M. YEAR Centrica plc National Express Group plc Market Portfolio, M 2002 224.7 151.5 199.5 205.8 292.6 187.4 3940.4 2003 4476.9 4814.3 5618.8 6220.8 6456.9 4434.2 5412.9 2004 337.7 2005 2006 2007 2008 235.5 327.6 293.0 256.1 465.2 451.7 545.4 607.1 168.8 207.1 243.6 2009 2010 2011 2012 2013 268.1 317.8 291.6 348.3 309.6 5899.9 5572.3 5897.8 6749.1 216.1 206.5 290.9 2014 6566.1 6242.3 7142.8 2015 292.5 254.9 2016 204.0 301.9 223.5 133.1 136.1 2017 337.8 7687.8 2018 366.2 393.9 6728.1 7542.4 2019 Source: Yahoo Finance. Required: (a) Calculate the systematic risk (82 x o, the non-systematic risk (o2) – (8? x o?) and the total risk (of) of the equity shares of Centrica and National Express Group. (b) Which company's returns are better explained by the market's returns? (c)…Question 3 The table below provides the end-of-year share prices (in GB pence) for Centrica plc and National Express Group plc the end-of-year values for the FTSE 100 Index, which is a proxy for the market portfolio, M. | YEAR Centrica plc National Express Group plc Market Portfolio, M 2002 224.7 292.6 187.4 337.7 465.2 451.7 3940.4 151.5 199.5 2003 4476.9 2004 4814.3 2005 2006 205.8 5618.8 6220.8 6456.9 4434.2 235.5 2007 2008 327.6 293.0 256.1 268.1 545.4 607.1 2009 168.8 5412.9 207.1 243.6 216.1 5899.9 5572.3 5897.8 6749.1 2010 2011 2012 2013 317.8 291.6 348.3 309.6 292.5 204.0 223.5 133.1 206.5 2014 290.9 6566.1 6242.3 7142.8 7687.8 6728.1 7542.4 2015 2016 2017 254.9 301.9 337.8 2018 366.2 2019 136.1 393.9 Source: Yahoo Finance. Required: (a) Calculate the systematic risk (B2 x a, the non-systematic risk (o) – (B? x o2) and the total risk (of) of the equity shares of Centrica and National Express Group. (b) Which company's returns are better explained by the market's returns? (c)…Current Attempt in Progress Determine the market price of a $50 par value preferred share that pays annual dividends based on a 4.0% dividend rate market rate is 5%? O $60 $50 O $35 O $40
- QUESTION 18 Suppose that the 1-year, 2-year, 3-year, and 4-year spot rates are observed as follows: r1=9.7%, r2=10.2%, r3=10.9%, r4-12.3%, What must be the expected return in year 4 under the liquidity preference theory if the liquidity premium is 0.49%? Oa. 18.63% Ob. 16.61% c. 16.12% Od. 18.14%Q17 The expected dividend of Sony Company for next year has the following probability distributions: 30% OMR 2.000 and 70% OMR 2.890. If the market price of a share is OMR 65.625, what is the required rate of return? a. 25% b. 2% c. 4% d. 8%10 6 points Use the Black-Scholes formula for the following stock: Time to expiration 6 months Standard deviation 53% per year Exercise price $43 Stock price $43 Annual interest rate 3% Dividend 0 eBook Recalculate the value of the call with the following changes: a. Time to expiration b. Standard deviation Print c. Exercise price References d. Stock price e. Interest rate 3 months 25% per year $49 $49 5% Select each scenario independently. Note: Round your answers to 2 decimal places. Value of the Call Option a. C falls to b. C falls to c. C falls to d. C rises to e. C rises to Check my work
- Problem 6-16 Expectations hypothesis and interest rates (LO6-4] Using the expectations hypothesis theory for the term structure of interest rates, determine the expected return for securities with maturities of two, three, and four years based on the following data. (Input your answers as a percent rounded to 2 decimal places.) Interest Rate 1-year T-bill at beginning of year 1 1-year T-bill at beginning of year 2 1-year T-bill at beginning of year 3 1-year T-bill at beginning of year 4 5% 78 9% 11% Expected Return 2-year security 3-year security 4-year security % %Net profit: 85000€ Retained earnings (profit) 31.12.2020: 24.000€Regular Reserve 31.12.2020: 30.000€ Share Capital 31.12.2020: 125.000€ the approved interim dividend for the year 2021 is €20,000, which is due on 31.12.2021 Prepare the Statement of Changes in Equity.QUESTION 3 Current Price Beta Market Risk Premium $50 1.5 5.52% Expected Price in 1 year Expected Dividend T-year T Bond yield What is the stock's alpha? Convert to a percent and then use 2 decimal places. $56.04 $1.94 0.679% QUESTION 4 A mature company will pay a dividend of $3.82 next year and those dividends are expected to grow at 1.78% forever. If the required return is 11.18%, what is the fair value of the stock today?
- QUESTION 9 Use the data in the table shown below. What is the geometric average return over the span of three years? Date 12/31/2018 12/31/2019 12/31/2020 12/31/2021 O a. 28.7% O b.7.5% c.9.5% O d. 8.9% Price $43.00 $45.60 $42.60 $52.50 Dividend $0.80 $0.80 $0.90QUESTION TWO Yield to maturities, par values and market prices for government securities (with annual interests) are given in the following table: Maturity (Years) Yield to maturity Par Value (K) Market Price (K) 1 3% 100 101.25 2 4% 100 103.50 3 5% 100 104.25 Assuming that the yields to maturities are equal to the coupon rates, calculate the one year, two year and three year spot rates.Question 4 The following information is taken from Tanaka Bhd for the year ended 31 December 2020. Preference dividend declared and fully paid in 2020: RM100,000 Ordinary dividend declared and fully paid in 2020: RM3,960,000 Preference shares marketable price per unit at 31 December 2020: RM4.60 Ordinary share marketable price per unit at 31 December 2020: RM9.00 Required: Calculate the following ratio for 2020: Industry average ratio Current ratio 2.3:1 Quick ratio 1.1:1 Asset turnover 2.0 Profit margin 4.0% Earnings per share RM0.46 Rate of return on total assets 11.0% Assumption: all sales in credit; finance expense means interest; ordinary share outstanding throughout both years = 10,000,000 shares.