Assuming you have PHP50,000 in excess funds. In which investment vehicle will you put your hard-earned money: (a) in the equities market to purchase an equity instruments i.e., invest in a newly-launched initial public offering (IPO) of an established Philippine company and/ or purchase existing listed shares from the Philippine stock market (Phil. Stock Exchange) or (b) in the debt market to purchase a debt instrument i.e., purchase newly issued long term 5-year fixed rate bond offering of San Miguel Brewery (as an example)? State your answer by discussing the advantages and disadvantages of both options.
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Assuming you have PHP50,000 in excess funds. In which investment vehicle will you put your hard-earned money: (a) in the equities market to purchase an equity instruments i.e., invest in a newly-launched initial public offering (IPO) of an established Philippine company and/ or purchase existing listed shares from the Philippine stock market (Phil. Stock Exchange) or (b) in the debt market to purchase a debt instrument i.e., purchase newly issued long term 5-year fixed rate bond offering of San Miguel Brewery (as an example)? State your answer by discussing the advantages and disadvantages of both options.
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- Ring & Bell Bhd. has prepared the next year's pro forma balance sheet which shows the external financing needed (EFN) of RM100,000. To bring the pro forma balance sheet into balance, Ring & Bell should __________. Select one: a. invest in marketable securities totalling RM100,000 b. repurchase common stock totalling RM100,000 c. repay notes payable of RM100,000 d. borrow long-term capital of RM100,000Suppose your company wants to place an investment with a private equity firm with an amount of Php 200,000 for 2021. Considering all the risks involved, the prevailing discount rate is 12% and with a revenue stream/dividends below. Should the company invest? Why or why not? Year Cash flow 2022 5,000.00 2023 6,000.00 2024 7,000.00 2025 8,000.00 2026 9,000.00 2027 10,000.00 2028 11,000.00 Determine the following: a. NPV for the period 2022 through 2028; b. Total NPV using manual computation; c. Total NPV using the Excel function; and d. IRR rate.Assume your organization wishes to make a Php 200,000 investment with a private equity firm in 2021. Taking into account all of the risks, the current discount rate is 12%, and the revenue stream/dividends are as follows: 2022 50002023 60002024 70002025 80002026 90002027 100002028 11000 Determine the following: DO IT IN EXCELa. NPV for the period 2022 through 2028;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.
- A reputable company plans to place an investment with a private equity firm with an amount of Php 10M for 2023. Considering all the risks involved, the prevailing discount rate is 12% and with a revenue stream/dividends below: 2019: 995,000.00 2020: 1.380,000.00 2021: 1.575,000.00 2022: 1,930,000.00 2023: 2,954,000.00 2024: 3.408,644.00 2025: 6,354.941.00 What is the NPV?Explain different types of money market instruments. In each of the below cases, which money market instruments would you recommend and why?a. A mutual fund manager has INR 450 million of cash, which he needs to park for a period of less than 180 days, where he will move this to equity.b. An oil refining company wishes to borrow INR 1500 million for a period of 90 days to fund its settlement of invoices.Several investors are in the process of organizing a new company. The investors believe that P2,600,000 will be needed to finance the new company’s operation, and they are considering three methods of raising this amount of money. Method A: All P2,600,000 would be obtained through issue of common stock Method B: P 1,300,000 would be obtained through issue of common stock and the other P1,300,000 would be obtained through issue of P100 par value, 12% preferred stock. Method C: P 1,300,000 would be obtained through issue of common stock, and the other P 1,300,000 would be obtained through issue of bonds carrying an interest ate of 12%. The investors organizing the new company are confident that it can earn P520,000 each year before interest and taxes. The tax rate will be 30%. Required: 1. Assuming that the investors are correct in their earnings estimate, compute the net income that would go to the common stockholders under each of the three financing methods listed above. 2. Using the…
- Assume your organization wishes to make a Php 200,000 investment with a private equity firm in 2021. Taking into account all of the risks, the current discount rate is 12%, and the revenue stream/dividends are as follows: 2022 50002023 60002024 70002025 80002026 90002027 100002028 11000 Determine the following:a. NPV for the period 2022 through 2028;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.Wiley Solutions Inc. must raise $15,000,000 to support future growth. If it raises funds by issuing stock, WS must pay an investment banker 5 percent of the total amount issued plus $200,000 in other costs associated with the issue. What total stock value must WS issue to net $15,000,000 after flotation costs expense?Your employer, Rubio LLC, is considering an investment in an office building that has the following cash flows: Purchase in Year 0…………… $ -2,750,000 Year 1………………. 220,000 Year 2……………….. 226,000 Year 3……………….. 250,000 Year 4………………… 255,000 Year 5 ………………… 230,000, and a sale @ $3,290,000 takes place EOY 5 The company’s weighted average cost of capital that they use as their discount rate for such calculations is 12% What would be the total cash flows in Year 5, taking into consideration the cash flows, annual debt service, sale price and the balance on the loan at the EOY 5? $1,662,985 $1,937,607 $1,802,986 $1,343,455 What is the leveraged IRR of the project ? 64% 58% 48% 55% In the above problem, you might expect The Yield to be higher than the discount rate because you sold the property at a profit. The NPV to be positive because the IRR is higher than the discount rate The NPV to be negative because the IRR is lower than the discount rate All of the…
- You are working for an imports-exports company. In the current financial year, your company has a net income of $851,000 and plans to use a part of it as retained earnings for a new project which will cost $500,000 next year. The company's stock is currently listed and actively traded on ASX. Required: a) Calculate the amount of net income available for the company to pay dividends to current shareholders if it maintains a capital structure of 46% in debt funding and 54% in equity funding, assuming residual dividend theory applies. b) Your company is going to pay an annual dividend of $5 per share and extra dividend of $2 per share in 4 weeks. The standard process of settlement in ASX is T+2. If tomorrow is the ex-dividend date, when is the record date for dividend payment? calculate the ex-dividend price if today's market price is $43.5, given the dividend tax rate is 13%. c) Your company needs to make a payment of AUD 245,000 to a partner in Tokyo. If the direct…As the CFO of your company, you want to determine the rate your company must require for capital investment projects. You have gathered the following information about the various funding sources and market conditions. Debt: 23,000 bonds. 7.2 annual% coupon, with semiannual payments. $1,000 face value. 19 years to maturity. Priced at $1,060 per bond. Preferred stock: 25,000 shares preferred stock. Priced at $95 per share. $5.00 dividend per share. Common Stock: 560,000 shares. Priced at $74 per share. Beta is 1.17. Market: 7% market risk premium. 5.1% risk-free rate. Company’s tax rate is 23%. What is the company's Weighted Average Cost of Capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 12.34.Consider a mutual fund that manages a portfolio of securities worth Php240 million. Suppose the fund owes Php8 million to its investment advisers and owes another Php2 million for rent, wages due, and miscellaneous expenses. The fund has 10 million shareholders. What is the net asset value per share?