Q: Portfolio Manager, what kind of investments are you going to offer to a client who is just a beginne...
A: The portfolio manager is job to design the portfolio for client according to the need and risk profi...
Q: 1.) The valuation of an investment can be defined in numerous ways. Which is FALSE? A.) It is depen...
A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts ...
Q: If interest rates increase because of a previously unanticipated inflation rate risk? long-liv...
A: Answer - If interest rates increase because of a previously unanticipated inflation rate risk as a ...
Q: to the company is 40%. Determine the cost of capital after tax assuming the debt is issued (i) at pa...
A: Cost of Capital: It represents the cost of raising capital from the investors by the firm. The firm ...
Q: Find the maturity date, maturity value and proceeds of the below promissory note: Face Date Term Int...
A: A promissory note is a legal promise by one party to another party to pay a specific amount after a ...
Q: tock just paid a dividend of D0 = $1.50. The required rate of return is rs = 14.1%, and the constant...
A: The continuous growth model, often known as the Gordon Growth Model, is a technique for valuing stoc...
Q: 30. CAPM and Cost of Capital. Suppose the Treasury bill rate is 4% and the market risk premium is 7%...
A: Businesses require funds to start the new projects, and this financial requirement is fulfilled by a...
Q: Maintenance of a small building amount to P 100,000 every year for the next 5 years and will increas...
A: Annual maintenance = P 100000 for 5 years and P 150000 afterwards forever Interest rate = 6%
Q: Lux Co. sells on terms 3/10, net 30. Total sales for the year are P900,000. Thirty-five percent of t...
A: Sales per day = Total sales / 360 Sales per day = P900,000 / 360 Sales per day = P2,500 Days' sales ...
Q: You invest the sum of ¢1,750,000.00, you generate the sum of ¢625,500.00, at an interest rate of 3.3...
A: It is related to the concept of time value of money. The concept says that the certain sum of money ...
Q: A company with a required rate of return of 12 percent is considering a project with an RM40,000 ini...
A: IRR is the internal rate of return for a project. It is that rate at which the present value of the ...
Q: y. How long will it take for her funds to triple?
A: Present Value: It represents the present worth of the future annuity payments or the future sum of t...
Q: Determine how much should be invested for 10 years starting one from now if you want to withdraw 5,0...
A: Future value required (FV) = P5,000,000 Interest rate (r) = 15% Period (n) = 10 Years
Q: A. On the 1st of June 2011 GoodTaste purchased a new freezer for €23,000 of which €2,000 was the VAT...
A: Since multiple questions are involved , We will answer 1st question for you.
Q: in 1983 the average tuition for one year at an ivy league schoolwas $11,800.thirty years later,in 20...
A: The Growth rate is calculated by subtracting the past value from the current value. Then, divide tha...
Q: What is difference between fair value and market value?
A: Fair Value: It refers to the asset's actual worth and is fundamentally derived. Hence, not determine...
Q: 6. A concrete pavement on a street would cost P 20,000 and would last for 5 years with negligible re...
A: Present worth = Initial cost + Old surface removal cost after 5 year / (1+interest rate)^5 = 20000 +...
Q: ABC has relatively constant returns from its operations. Average annual profit figures are as follow...
A: Debt amount = 3,000,000 Coupon Rate = 8% Tax Rate = 35% Weighted average cost of capital = 15%
Q: An analyst is evaluating securities in a developing nation where the inflation rate is very high. As...
A: Yield is a percentage measure of the return on an investment over a specific period of time. Yield i...
Q: ABC has a problem with its cash conversion cycle. Based on ecords, ABC has receivables, inventory an...
A: Debtor Collection period id the period in which normally debtor paid their due to company. Inventory...
Q: what is the value of the bond.
A: Bond: It is a debt instrument issued by the firm to raise capital from the investors. The bondholder...
Q: A gasoline engine is available on instalment basis with a down payment of P 10,682 and P 5,479 at th...
A: Present Value of Annuity Due refers to a concept which determines the value of cash flows at present...
Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following ...
A: Given: RA = 4.0% + 0.50RM + eA RB = –1.2% + 0.70RM + eB σM = 17% R-squareA = 0.26 R-squareB = 0.18 ...
Q: 0123 45 181 An investor is considering a business opportunity with the anticipated re- ceipts and di...
A: The net cash flow can be calculated by taking the difference between the cash disbursement and cash ...
Q: How does compound interest affect the loans you undertake? For example, how would this affect stude...
A: Interest is an additional value which is charged on borrowed or deposited amount. Interest can be an...
Q: fane has $1L025 and plan to purchase a 5-year certificate of degosit KD tht y interest, conmpounded ...
A:
Q: What is risk aversion, and how is risk aversion related to the expected return on a stock
A: In the world of investment, the risk appetite of the investor is an important consideration when det...
Q: Give 5 functions of the Securities Commission under section 15 of the Securities Commission Act (SCA...
A: The SCA was created on 1st March 1993. This commission is a statutory body funding its operations by...
Q: A loan of $1575 taken out on June 7 requires three payments. The first payment is due on July 7. The...
A: The focal date of the loan is 7th June. The first payment is due on 7th July, the second payment is ...
Q: You borrowed $444,000 with a 30-year, fully amortized, adjustable-rate mortgage 1 year ago. The paym...
A: Loan Amount = $444,000 Time Period = 30 Years Original index rate = 4% Margin = 2% Initial rate = 4%...
Q: Which of the following-would be consistent with a more aggressive approach to financing working capi...
A: Working capital refers to the short-term capital required by a company to meet its immediate obligat...
Q: A man purchases a lot worth 5M if paid in cash. On installment basis, he paid P800,000 down payment,...
A: Cost = P5,000,000 Down payment = P800,000 Payment at year end = P900,000 Payment at third year end =...
Q: YIELD CURVES Plots interest rates on different securities of similar default risk for a given day Us...
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...
Q: The monthly rent for the first house is $1, 190, and the Bainters can expect it to increase 1.7% eve...
A:
Q: Federal Holdings consumes about 72,000 kg of flour per year. The company is open 360 days a year, Th...
A: Re-order point indicate when to purchase the goods just to minimize the ordering and carrying cost b...
Q: 6. What is the Cost of Equity for CS3? 7. The weighted average cost of capital for CS1 is 8. The w...
A: CAPM Refers to the capital asset pricing model, under this method cost of equity can be calculated a...
Q: Malko Enterprises' bonds currently sell for $1,020. They have a 6-year maturity, an annual coupon of...
A: Annual coupon = $75 Market price = $1020
Q: A borrower received a 30-year ARM mortgage loan for $200,000. Rate caps are 3/2/6. The start rate is...
A: A variable-rate mortgage (ARM) is a type of house loan with a variable interest rate. The initial in...
Q: Stock M has a relevant risk equals 1.75, and unsystematic risk equals 2. If the real risk-free rate ...
A: The Capital Asset Pricing Model (CAPM) refers to the model which tells us how the financial markets ...
Q: . What lump sum of money must be deposited in a bank account at present time so that Php 500 monthly...
A: Monthly withdrawal (M) = Php 500 after 6 years (72 months) Number of withdrawals (n) = 5 years = 60 ...
Q: Assuming a market rate of 7.6% over all maturities, the current yield of a bond with a coupon rate o...
A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to finan...
Q: Build Corporation wants to purchase a new machine for $318,000. Management predicts that the machine...
A: Calculate the value of annual depreciation by dividing the purchase value of machine which is $318,0...
Q: Can an investor eliminate market risk from a common stock portfolio?
A: There are two types of Risk 1. Systematic Risk:- These are risk pertains to Industry as a whole not...
Q: 7. An asset was purchased for P 150,000 and retired at the end of 15 years with a salvage value of P...
A:
Q: Where and how are financial records kept? Who is responsible for their storage ? Is there a length o...
A: Financial records are essential for any firm to understand the company's financial history, operatio...
Q: After seeing its neighboring village obtain a new water tower, the city board of East Dubuque begins...
A: Time Period = 20 Years Interest rate = 9% compounded daily Future Value = $1,750,000
Q: You and your partner have become very interested in cross-country motorcycle racing and wish to purc...
A: Present worth is calculated by present value of all future cost discounted at an interest rate.
Q: 3. A manufacturer has a fixed cost of $110,000 and a variable cost of $22 per unit made and sold. Se...
A:
Q: Money borrowed today is to be paid in 8 equal payments at the end of each quarter. If the interest i...
A: Quarterly payment (Q) = P 37291 n = 8 payments r = 1% per annum = 0.25% quarterly
Q: Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current yea...
A: Sales revenue= $470,000 Cost of goods sold= $450,000 Operating expenses= $55,000 Long-term capital g...
Capital gains yield is the percentage increase in the value of an investment. It's calculated by dividing an investment's price increase by the cost of acquisition. For instance, if you purchase a security for $100 and later sell it for $125, your capital gains yield is 25%. If the price of an investment falls below its acquisition price, there is no capital gains yield.
This concept disregards any dividends received and is solely dependent on the change of an investment's price. To calculate the entire return on a share, an investor must add the capital gains yield and the dividend yield.
Step by step
Solved in 2 steps
- Discuss the advantages and disadvantages of using (a) payback, (b) net present value and (c ) internal rate of return as a method of capital investment analysis.What is the capital asset pricing model (CAPM)? What does it tell us about the required return on arisky investment?The Capital Asset Pricing Model (CAPM) asserts that an asset’s expected return is equal to the risk-free rate plus a risk premium for: a. Volatility b. Systematic risk c. Non-systematic risk d. Diversification e. Marginal utility of consumption
- Which of the following best represents the relationship between the weighted average cost of capital (WACC) and the minimum attractive rate of return (MARR)? a. WACC and MARR are unrelated b. WACC is a lower bound for MARR c. WACC is an upper bound for MARR d. MARR ≤ WACC.Make a simple example of the following: a. Capital Gain (or Losses) b. Expected Return c. Real Return d. Risk-free Return e. Required Return f. Holding Period ReturnExplain the relationship between the weighted average cost of capital (WACC), the maximization of firm value, and financial decision making.
- Recognize the distinctions among yieldto maturity, currentyield, rate of return,and rate of capitalgain.The Capital Asset Pricing Model (CAPM) describes a relationship between the expected return of,,, a)An individual share and its variance risk b)An individual share and its standard deviation risk c)An individual share and its undiversifiable risk d)An individual share and its diversifiable riskWhich of the following are present value methods of analyzing capital investment proposals? a. internal rate of return and average rate of return b. average rate of return and net present value c. net present value and cash payback d. net present value and internal rate of return
- This is a generalized framework for analyzing the relationship between risk and return: a. capital asset pricing model b. diversification theory c. capital market line d. arbitrage pricing theoryGenerally, the ____ is considered to be a more realistic reinvestment rate than the ____. a. risk-free rate; cost of capital b. risk-free rate; internal rate of return c. cost of capital; internal rate of return d. internal rate of return; cost of capitalUsing the free cash flow valuation model, identify avenues by which capital structure can affect the weighted average cost of capital and firm value.