A company is considering the following two dividend policies for the next five years. Year Policy #1 Policy #2 1 4.00 6.90 4.00 2.40 3 4.00 5.00 4 4.00 1.70 5 4.00 4.00 Required: 2.

Q: A student needs P4000 per year for 4 years to attend college. Her father invested P5000 in a 7%…

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Return on HC's Stock 0.5 1.0 1.5 20 RISK (Beta)

A: Capital assets price is used extensively predict required rate of stock considering the risk of the…

Q: Management is considering buying a pump that costs $20,000 and could save them $7,500 per year over…

A: NPV is the difference between the Present Value of Cash Inflows and Initial Investment. A project…

Q: A Treasury bond that settles on October 18, 2019, matures on March 30, 2038. The coupon rate is 5.70…

A: Macaulay duration: Duration is a term that describes how sensitive an asset is to interest rate…

Q: Yield: 5% Coupon Rate: 4% Term: 3 Yrs Frequency: Semi-Annual Face Value: PHP10,000.00 Issue Date:…

A: Price of bond is present value of coupon payment and present value of par value of bond that is…

Q: a. What minimum amount of shares must Nancy purchase to have a sales charge of 5.50%? (Round up to…

A: Fund generation or fundraising refers to a process which is used by the company to raise and gather…

Q: An investment involves annuity of 2424 php compounded 32.4 times a year at an interest3.24%. The…

A: Here, To Find: Annual difference in annuities if the interest is compounded only once a year =?

Q: A company is considering two projects. Project A Project B Initial investment $200,000 $200,000 Cash…

A: The Payback Period is one of the traditional techniques of capital budgeting that does not take into…

Q: Preferred stock valuation Segwick Manufacturing has an outstanding preferred  stock issue with a par…

A: Solution:- Preferred stock is that type of shares which are not given voting rights, but are given a…

Q: Baron Corporation has a target capital structure of 60 percent common stock, 5 percent preferred…

A: Solution: Weighted Average Cost of Capital (WACC) is the minimum rate of return required by the…

Q: Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years…

A: Project 1 Net Cash flows x Present Value of Annuity at 10% = Present Value of Net Cash Flows Years…

Q: A standard “fixed for floating” interest rate swap contract is effectively a series of   call…

A: Interest rate swaps are the derivative contracts where two parties exchange cashflows each other on…

Q: Money supply is O a. Inflation O b. Total amount of money in circulation O c. Total amount of money…

A: Solution:- Money acts as a medium of exchange for buying and selling goods these days.

Q: Ihrough 15: The financial manager of Apple Co. is evaluating Banana Co. as a possible acquisition.…

A: Market value of a company Market value of a company is calculated as shown below. Market value of a…

Q: Consider a zero coupon bond that promises to pay $100 each year for the next three years. Suppose we…

A: The price of a zero-coupon bond:  The price of the annuity is the total present value of the cash…

Q: How much money be invested today in order to withdraw P1500 per year at the end of each year for 8…

A: Annual withdrawal (P) = P1500 Interest rate (r) = 8% Number of withdrawals (n) = 8

Q: Here's an example of how breakpoint discounts on sales commissions for mutual fund investors work:…

A: NAV refers to net asset value. For a mutual fund its NAV = total assets - total liabilities

Q: a) Draw up the repayment table for a loan of $500,000 at a rate of 7% repayable in 4 constant annual…

A: Loan Amount after 2 years = 500000*(1+i)^2 = 500000*(1.07)^2 = $5,72,450 Repayment Amount…

Q: explain how capital asset pricing model (CAPM) won a novel prize.

A: Meaning of capital asset pricing model(CAPM), It is a model which is related to the determination…

Q: o. Denive Lu uhere symbols have their usual meonings

A: F=1+in-1iAF = Future valuei = interest raten=number of periodA=Annuity amountFuture value…

Q: The expected rate of return on Happy Dog Soap’s stock over the next year is ________. • The expected…

A: Expected Rate of Return on Portfolio: It is the total return expected by the investor on the…

Q: In mid-2015, Microsoft Corporation had a market capitalization of $340 billion, $35 billion in debt,…

A: The beta of a company indicates the sensitivity of the stock prices or prices of assets to the…

Q: Harvey manufacturing company expected in 2021 to have 18% increase in sales compared to 2020 sales…

A: Retained earnings of a company are those profits earned by the company but not distributed to the…

Q: You are looking to buy a $275,599.00 home in Haverhill. If Bank of America will give them a 30-year…

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

Q: The present value of a sum of money is the amount that must be invested now, at a given rate of…

A: Solution: Present value is the amount in today’s terms and amount with interest at maturity is…

Q: Industrial Organization 1. Suppose firms’ market shares in the US mobile services market are as…

A: HHI measures market concentration  Herfindahl-Hirschman index measures the size of firms with regard…

Q: Beta 0.53 Risk-free 0.7% MRP 5.55% Rate Given the data in the table, what is the stock's risk…

A: Risk free rate = 0.7% Market return = 5.55% Beta = 0.53

Q: Find the amount (future value) of the ordinary annuity. (Round your answer to the nearest cent.)…

A: Annuity refers to the fixed periodic payments made for the specified period of time. Present value…

Q: Given the following yearly percentage price changes for 3 market indexes. Compute the Covariance of…

A: To Find: Covariance of PSEI &SSE  Covariance of SSE & RUSSELL 100

Q: 3. Suppose a certain bond sold a volume of 2, 375, 000. If the bonds sold for $824.99, calculate the…

A: Bond is a debt instrument issued by companies. Bonds pay coupon payments to bondholders and the…

Q: Assume a government starts with zero debt. This government then rus an annual defcit for 28 years of…

A: Government debt refers to the amount of liabilities raised by the government for the purpose of…

Q: Find the effective rate corresponding to the given nominal rate. (Use a 365-day year.) 6%/year…

A: Return on investment is the rate of amount received each period of investment compared to the…

Q: Foreign exchange risk

A: Foreign exchange risk is defined as the fluctuations in the exchange rate of a local currency and…

Q: Find the accumulated amount A if the principal P is invested at the interest rate of r/year for t…

A: Principal amount (P) = $43,000 Interest rate (r) = 9 3/4% = 9.75% Period (t) = 9 Years Compounding…

Q: Polly purchased a car. She paid ₱250,000 as down payment, and ₱15,000 payable at the beginning of…

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type])…

Q: In his best seller Wealth Without Risk, Charles J. Givens, the self-styled expert on “low-risk ways…

A: The book – Wealth Without Risks – contains many advices and strategies that an individual can adapt…

Q: Which one of the following statements is correct?    Real rates must exceed inflation rates.    Real…

A: Real interest rate= Nominal interest rate - Inflation rate In real interest rate, the effect  of…

Q: XYZ Ltd.’s IPO was severely under-priced based on the first day’s closing price. How would it affect…

A: A stock market is generally a collection of stock exchanges or other places where the shares of a…

Q: (b) Calculate the working capital cycle for both years. Year ended 31st December 2019 2018 Inventory…

A: Working capital cycle - It is defined as the time taken by a firm  to convert its current…

Q: Explain the difference between the unbiased expectations theory of the term structure of interest…

A: There are different theories that describe how the interest rates are set.

Q: Dr. Barrett wants to purchase a new piece of equipment for his practice. The equipment can be…

A: Payback period = Initial investment/annual cash inflows Since depreciation is a non cash expenditure…

Q: A credit card has a 21.99% APR, a minimum monthly payment of 3.15%, and a current monthly statement…

A: Minimum monthly payment is the least amount of money paid by the credit card holder every month .…

Q: Suppose a project has an initial outflow of $600000. If the cash flows projected for years 1-6 are…

A: Note As per Bartleby guidelines, If a question with multiple sub-parts is posted, the first 3…

Q: 6. You are hoping to put down $3000 on a car in 2 years. If the bank pays 4% interest, compounded…

A: Future value required (FV) = $3000 Period =  2 Years Number of monthly deposits (n) = 2*12 = 24…

Q: I was thinking about the topic B. What would be the answer :  b. Ignoring​ tax, depreciation, and…

A: Payback period is a capital budgeting technique which helps the company in knowing that in…

Q: 12. Consider a 25-year 6% bond selling at $70.357 with a par value of $100 to yield 9%. Using…

A: Absolute estimation error is the percentage error, which is simply difference between the two values…

Q: Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to…

A: The Price Multiple approach can be used to calculate the expected price of a share by estimating the…

Q: If the risk-free return were 4.0% and a security's beta coefficient were 2.0, what would be the…

A: Security Market Line: It is a line representing a graphical representation of CAPM (capital asset…

Q: Alex purchases 100 stocks in a company that pay dividends of $10 every year for the next 5 years.…

A: Solution: We know, present value means the value of future income in today’s terms by discounting it…

Q: bond with a coupon rate of 10 percent sells at a yield to maturi ercent. If the bond matures in 12…

A: Macaulay duration show changes in prices of bonds with changes in interest rate in the market.…