5.940%

Q: You are a financial adviser, and your client wants to save $6,000 in order to make a downpayment for…

A: Future value (FV) = $6,000 Quarterly interest rate (r) = 0.009 (0.036 / 4) Quarterly period (n) = 8…

Q: Given the information below for HooYah! Corporation, compute the expected share price at the end of…

A: Given: Year 2014 2015 2016 2017 2018 2019 Price $22.00 $58.50 $130.00 $207.00 $97.00 $27.50…

Q: A risky security has less risk than the overall market. What must the beta of this security be? O 0…

A: The beta of the overall market is 1.00. Since the security has lesser risk than the overall market,…

Q: Identify the firm’s three major capital structure components and give their respective component…

A: To meet the financial requirements of the business, companies raise funds from external sources.…

Q: You want to buy a $260,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

A: a) Loan Amount = Total price of house - Down payment  = 260,000 - (260,000 * 5%) = 260,000 - 13,000…

Q: Valerie refinanced her home loan. The new loan of $103,000.00 has an interest rate of 5.9%…

A: Here, Loan amount = $103,000.00 Interest rate = 5.9% compounded monthly Term of loan = 21 years To…

Q: Please explain this quote! "Sometimes it takes longer to create value, but if companies generate…

A: In finance the value of a company or the value of a stock depends on the company’s earnings which in…

Q: . If the tax rate is 25 percent, what is the value of the firm? (Do not round intermediate…

A: Firm Value: It represents the sum of all the creditor's claims & shareholders. It can be…

Q: Compute the payback period for an investment with the following net cash flows. (Round your answer…

A: Last year in which cumulative net cash flow is negative (Y)  = 4th year Minimum cash inflow required…

Q: tock W has the following returns for various states of the economy: State of the Economy…

A: Stock W return  = (Probability 1 * Return 1) + (Probability 2* Return 2) + ....+ (Probability N *…

Q: Discuss capital budgeting.

A: Financial capital is any economic resource measured in terms of money that entrepreneurs and…

Q: Series discounts are a form of trade discount. (T or F)

A: Since you have posted multiple questions, we shall be solving the first one for you. In case you…

Q: month until the end of the 4th year, she plans to increase her deposit by 5,000. How much is the…

A: Present value of an annuity with a fixed growth rate Annuity is a series of equal payments at equal…

Q: When estimating the amount and cost of debt, should you aggregate the various line items into larger…

A: The effective interest rate that a corporation pays on its debts, such as bonds and loans, is…

Q: АСTIVITY 5 An investor requires a return of 12 percent. A stock sells for P5000, it pays a dividend…

A: First we need to calculate current stock price by using constant growth model. Stock price(P0)…

Q: When compounded quarterly P12,000 becomes P 20,415.23 after 4 yrs. What is the nominal rate of…

A: Present value (P) = P12,000 Future value (FV) = P 20,415.23 Period = 4 Years Quarterly periods (n) =…

Q: Zach took $400,000 out of the bank and used it to start his new cookie business. The bank account…

A: Economic profit is calculated by subtracting explicit costs and opportunity costs from the revenue…

Q: 1. Only the sole proprietorship and partnership forms of business organization can resort to…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Calculate the WACC for Aya Ltd, using the following:

A: WACC: It is the firms average cost of capital and is estimated by the sum of individual cost of…

Q: Three advantages of forming a company  The meaning of the term “limited liability”

A: A business can be done in any form – a sole proprietorship, or a partnership or forming a company.…

Q: while the material quantity van materials purchased in June wa

A: Material price variance = -7000 SP*AQ-AP*AQ=-7000 SQ*SP-AQ*SP=4200 SP*SQ-AP*AQ=4200-7000=-2800…

Q: Rene's Fuel and Oil company is planning to expand in 9 year time. To prepare for this expansion,…

A: Future Value of Ordinary Annuity refers to the concept which determines the sum total of all the…

Q: A borrower takes out a 30-year loan for a house worth $250,000. If the annual interest rate is 6%.…

A: Here this is a case of home loan. It should be noted that there are monthly payments towards a home…

Q: The housing market is crazy right now! Sierra bought her condo for S250,000, 5 years ago. She paid a…

A: The annual rate of return is the method of calculating the payback that has been received by an…

Q: XYZ Ltd has spent £100,000 on research and development of a new product, expected to have a short…

A: The net present value method is used to find out the profitability of a project by discounting its…

Q: True or False 1. One of the company's sources of funds is its own accumulated earnings.  2. In a…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Your company uses the NPV to evaluate capital budgeting decisions. It is considering purchasing a 3D…

A: NPV is the present value of cash Inflows and Initial Investment. A project with postive NPV should…

Q: Haystack, Inc. manufactures machinery used in the mining industry. On January 2, 2018, it leased…

A: Here, Cost of the equipment = £480,000  Selling price of the equipment = £702,000  Interest rate =…

Q: a. The value of CoolTech's entire company is S. (Round to the nearest dollar.) The value per share…

A: Growth rate = 5% Weighted average cost of capital = 11% Market value of debt = $2,950,000 Market…

Q: A company has generated over the last year, with the sales of all its product lines, an operating…

A: ROA It is the return on assets to measure the firm's ability to generate net earnings with its…

Q: Price a 3 month call using a one step binomial tree where the risk free rate is 2.48%. Where S0 is…

A: Option Pricing model: There are two prominent option pricing models that are prevalent today. They…

Q: A 15-year annual coupon bond trades for $1,200 in the market. If the market interest rate is 4%,…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: WACC and Optimal Capital Structure F. Pierce Products Inc. is considering changing its capital…

A: The optimal capital structure: The optimal capital structure is the proportion of debt and equity at…

Q: 1. In equity financing, the corporation is required to distribute dividends to its stockholders on a…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: A payment of $3,160 was due three years ago, and a payment of $1,150 is due today. What single…

A: Money received today is worth more than money due at a later date, according to the time value of…

Q: You notice in the WSJ a bond that is currently selling in the market for ​$1,053 with a coupon of9​%…

A: Market price of bond = $1,053 Coupon rate = 9% Par value = $1000 Annual coupon amount = Par…

Q: BUS 038 : Business Computations 9. You purchase goods on an invoice dated July 5 with terms of 4/15,…

A: 4/15, n/45 ROG stands for that the credit period starts from the date when goods are received by the…

Q: What would be BAT's current before-tax component cost of debt? a. What would be BAT's current…

A: Cost of Debt: It is the cost of raising debt capital for the company and the such cost of debt is…

Q: Explain the following terms Authorized Share Capital Issued Share Capital Bonus Shares

A: 1) Authorized Share Capital It refers to maximum number of shares a company is allowed to issue…

Q: What is the risk-return tradeoff that arises when . firm manages its working capital? Give tangible…

A: Financial risk is referred as the possibility or chance of losing the investment, basically an…

Q: 6 points Save 0 million and A's present value of net cash flows after tax is $245 million, Project B…

A: Projects  Initial outlay (Million $)  PV of net cash flows after tax (Million $) Net Present Value…

Q: Comment on Stock Inspection?

A: A stock (also identified as equity) is a type of security that represents ownership of a portion of…

Q: You have an opportunity to invest $50,600 now in return for $60,800 in one year. If your cost of…

A: Formula NPV = [CF1/(1+R)]-CF0 Where NPV - Net present value CF1 - Cash inflow after 1 year i.e.…

Q: A stock has an expected return of 14.3 percent, the risk-free rate is 3.2 percent, and the market…

A: Formula Expected return = Risk free rate+(Beta*Market risk premium) Where Expected return = 14.3%…

Q: Investor Dan has $607,000 to invest in bonds.  Bond A yields an average of 8.5% and the bond B…

A: Given, In this question, we have to find the amount which is to be invested in A bond.

Q: Use a bankers year: 360 T-bills (Treasury bills) are one of the instruments the U.S. Treasury…

A: Maturity Value is $17,750 Purchase price is $17,564.46 Time to maturity is 200 days Number of days…

Q: What is the implied volatility of a European call option with the following parameters? c = $3 s0 =…

A: European option: It's a contract option that allows the buyer or seller to exercise the contract…

Q: Price a 3 month call using a one step binomial tree where the risk free rate is 1.00%. Where S0 is…

A: Call Option: It is a contract that provides the buyer the right to purchase the security at the…

Q: Both call and put options are affected by the following five factors: the exercise price, the…

A: Put Option:- It is an financial instrument that gives right to sell but not the obligation to sell…

Q: Directions: Solve the following problems completely. Find the period of deferral in each of the…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.