Assuming that a preferred stock has a par value of $75, pays a 10% dividend and you have an 8% required return, what is this stock worth to you?

Q: Telemundo Ltd. borrows K100, 000 from AB bank. The loan is to be repaid in 1year with periodic…

A: To calculate the monthly charge for the loan, we first need to determine the interest rate per…

Q: 1a)List and explain the five finance functions in an organisation b)Why should it worry when you…

A: Introduction (A) Finance is an integral part of any organization, since it is necessary to ensure…

Q: An investor purchases a share for £6.89 at the beginning of the year. Six months later, the investor…

A: Annual effective rate of return  is the interest rate that an investor earns on his investment after…

Q: Zero-Coupon Bonds (ZCBS) with maturity in 1 and 5 years are available on the market. Their…

A: A bond is a debt instrument that provides the issuer with capital from investors rather than…

Q: ROE Net Income/Shareholder equity Retention Retained earning/net income SGR Retention ratio x ROE…

A: Net income is the income generated by the company after the adjustment of all the direct and…

Q: Consider the following cash flows: Year Cash Flow 0 −$ 29,000 1 14,700 2 14,200 3 10,600 What is…

A: Profitability index is a measure ratio between present value of cashflows and the initial…

Q: Assume a $270,000 investment and the following cash flows for two products: Year Product X Product 1…

A:

Q: List three entities that with legitimate reasons could check your credit report.

A: A credit report is a detailed summary of an individual's credit history. It contains information…

Q: 1. Your client has been offered the opportunity to invest in a project which will pay $1,000 per…

A:

Q: Note: Round all answers to the nearest cent when necessary. Calculate the amount financed, the…

A: When funds are financed from outside, they carry a finance charge which is the cost of using those…

Q: You invest in a 10-year Peloton bond that pays interest of 8.7% per year. If inflation is 6.1% per…

A: The real interest rate advantage is particularly important for investors who are looking to preserve…

Q: A stock has an required return of 16.5 percent, its beta is 1.75, and the risk-free rate is 2.75…

A: Expected rate of return = R = 16.5% Beta = 1.75 Risk free rate = rf = 2.75%

Q: e. Which bank has the lower total interest, and by how much? United Bank v f. What is the difference…

A: First, we need to determine the monthly payment of each option. This can be determined using the…

Q: Sally's  Inc bonds have an 8.3% coupon rate, payable semiannually, and a par value of $1,000. They…

A: Compound = semiannually = 2 Coupon rate = 8.3 / 2 = 4.15% Face value = fv = $1000 Time = t = 10 * 2…

Q: A bond has a semi-annual coupon payment of $32.4.  What is the coupon RATE? Convert to a percent.…

A: To calculate the coupon rate we will use the below formula   Coupon rate = (C*2)/FV Where C -…

Q: a loan of 4415$ borrowed today is to be repaid in three equal installments due in one and a half…

A: The loan amount (P) is $4,415. Compounded monthly. The annual rate of interest is 9.2% and the…

Q: Ewing Corporation is evaluating an extra dividend versus a share repurchase. In either case, $10,000…

A: a)  Extra dividend The share price after dividend is  Stock Price=Current Stock Price-Amount…

Q: Assume $300 is deposited every three years into an account earning an annual effective interest rate…

A: A sum of money is worth more now than it will be at a later time due to its potential for profits in…

Q: A​ BBB-rated corporate bond has a yield to maturity of 8.2%. A U.S. Treasury security has a yield to…

A: A treasury bill is a kind of debt security issued by the government and private companies for…

Q: You have estimated that your vehicle will need to be replaced 10 years from now at a cost of K120,…

A: Compound = quarterly = 4 Time = t = 10 * 4 = 40 quarter Future value = fv = K120,000 Interest rate =…

Q: Amount of annuity expected $900 Opening balance nterest Annuity Closing balance $ heck the…

A: Annuity An annuity is an arrangement that you have with an insurance provider that calls for regular…

Q: gour Pharmaceuticals Ltd. is considering investing in a new  production line for its pain-reliever…

A: WACC When there are different sources of financing, the overall cost of capital is determined by…

Q: How much would you need to deposit in an account now in order to have $2000 in the account in 15…

A: Future Value is that amount which includes the interest which is received by investing the amount at…

Q: Give typing answer with explanation and conclusion  1.) A $1000-par 7% annual coupon bond has 12…

A: We will calculate price of bond after 5 years when YTM increased by 1% using new YTM rate. Formula…

Q: Suppose that you have the following two opportunities from which to construct a complete portfolio:…

A: A portfolio is a combination of various securities which consists of common stock, bonds, debt…

Q: Cash flows from a new project are expected to be $5,000, $8,000, $14,000, $22,000, $24,000, and…

A: IRR stands for Internal Rate of Return, which is a financial metric used to calculate the potential…

Q: A factory costs 800,000 €. You reckon that it will produce an inflow after operating costs of…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: Wendell's Donut Shoppe is investigating the purchase of a new $39,600 donut-making machine. The new…

A: A company's cash inflow, which might come through sales, investments, or funding, is the amount of…

Q: A firm issues a bond today with a $1,000 face value, an 8% coupon interest rate, and a 25-year…

A: The total return expected on a bond if it is kept to the end of its maturity period and all interest…

Q: You have gathered the following information on Stocks A & B. Assuming the stock market is efficient,…

A: Dividend means part or share of profits being distributed to shareholders. Dividend yield is ratio…

Q: how come people lost their homes and became failure homeless due to the lehman failures

A: The failure of the mentioned company is one of the bases of the financial crisis of 2008-09. The…

Q: Bond A has a coupon rate of 4% and a yield of 4%. Bond B has a coupon rate of 3% and a yield of 3%.…

A: A debt security is a loan. Bonds are issued by borrowers to attract capital from buyers ready to…

Q: Kimball Corp. just paid a dividend (Do) of $1.25 per share. This dividend is expected to grow at a…

A: The Dividend Growth Model, also known as the Gordon Growth Model, is a method used to estimate the…

Q: A financial obligation requires payments of $200 today, $250 in three years, and $550 in five years.…

A: The concept of TVM states that the money earned earlier has more value than the same amount earned…

Q: Here’s some info for a company:        Total assets = $50,000 Total liabilities = $30,000,000…

A: Total Assets = $50,000 Total Liabilities = $30,000,000 Profit margin = 10% Sales = $50,000,000

Q: A power option pays off [max(S₁ – X),0]² at time T where ST is the stock price at time T and X is…

A: To calculate the risk-neutral probability, we can use the fact that the price of the power option is…

Q: jeremy opened a CD (certificate of deposit) on April 3, 2018 with an interest rate of 4.65%…

A: Present value is a financial term that refers to the current value of an amount of money that will…

Q: You must decide whether to buy a new car for ​$19,000 or lease the same car over a​ three-year…

A: Cost of buying refers to the amount that is incurred while purchasing an asset from the market. It…

Q: 1. Financial institutions in the U.S. economy Suppose Clinton decides to use $3,500 currently held…

A: There are different methods for firms to raise funds from the market. It can be done by selling…

Q: A new project will have an intial cost of $50,000. Cash flows from the project are expected to be…

A: Initial cost = cf0 = $50,000 Cash flow for year 1 = cf1 = -$25,000 Cash flow for year 2 = cf2 =…

Q: Give typing answer with explanation and conclusion  Compute the future value of $1,000 compounded…

A: Future value refers to an amount of a current asset at some future date affected by interest arte,…

Q: A restaurant manager has the option of a 30-year loan of $415,000 at an annual interest rate of…

A: When the lender lends a loan to the borrower, he charges a rate of interest on the borrowed amount.…

Q: Explain the cost of equity and value of levered and unlevered firms by hypothetical examples.

A: Cost of equity is the rate of return required by investors to compensate for the risk they are…

Q: 1. Compare the liquidity of an investment in raw land with that of an investment in common stock. Be…

A: “Since you have posted multiple questions, we will provide the solutiononly to the first question…

Q: There are two options to purchase a car: a 5-year loan vs. a lease of the car. The price of the car…

A: A firm considering the acquisition of an asset, the ownership of which is only incidental to getting…

Q: vcast inc is expected to grow at a constant rate of 9 percent. the compant will pay a dividend of…

A: Value of stock is calculated using following equation Stock worth = D1r-g Where, D1 is expected…

Q: (a) Complete Table 2.6 and show that the total depletion allowance exceeds the original investment.…

A: It is given that investor has invested $1000,000 to drill and develop an oil well with reserve…

Q: Esfandairi Enterprises is considering a new three-year expansion project that requires an initial…

A: Sales = $2,860,000 Costs = $1,850,000 Depreciation = $2,350,000 / 3 = $783,333 Tax rate 25 percent…

Q: it say 1.33 is incorrect

A:

Q: The capital allotted for the business is Php 8,700,000. Based on a preliminary market study, it was…

A: The present value annuity factor PVAF is used when there is a uniform cash flow over a number of…