Compute the future value o

Q: National Inc. has 100 bonds outstanding with maturity value each of P1,000. The nominal required rat...

A: Par value of bond (FV) = P1000 Coupon rate = C Semi annual coupon amount (P) = 1000*C/2 = 500C Years...

Q: The prices of several bonds with face values of $1,000 are summarized in the following table: . For ...

A: If bonds sell at less than its face values it trades at a discount. If bonds sell at its face values...

Q: 14. Which of the following is most likely to be a symptom of overtrading? A   Static levels of inve...

A: Overtrading: When a company expands too quickly without the financial capacity to support it, this i...

Q: Bulldogs Inc. forecasted the following data for 2022. ·      Forecasted unit sales is 20,000. ·    ...

A: Given: Particulars Amount Sales units 20000 Selling price 25 Contribution margin ratio 40% ...

Q: Assume ABC Corp. pays the dividend of $5.60 this year. For the next 25 years, the firm's dividend wi...

A: Present Value of Firm's stock through Dividend Discount Model Can be calculated as: YEAR PARTICUL...

Q: present value of a perpetual annuity? Seleccione una:

A: Perpetuity is defined as the series of fixed payments made each year for an indefinite period of tim...

Q: ¿How much is the Customer Lifetime Value? (Select best answer) Assumptions: Retention Rate= 75%, Av...

A: We need to write down what we have given in this Question Retentions Rate=75% Average Annual Costume...

Q: DD Plc is expected to declare earnings per share of £1.60 next year. The company historically has re...

A: Present value of growth opportunities is calculated using the current market price of stock and earn...

Q: How does a bank try to achieve the best possible risk adjusted return on its overall loan portfolio?

A: The possibility of a loss arising from a borrower's inability to repay a loan or meet legally bindin...

Q: A manager buys three shares of stock today, and then sells one of those shares each year for the nex...

A: Let R1, R2 and R3 be the returns for year 1, 2 and 3  

Q: AVC Auctions (AVCA) has offered its 16.6 million shares in a Dutch Auction IPO. The following bids h...

A: Solution:- Bid price is the price offered by the buyer to purchase something and ask price is the pr...

Q: thomas is planing to withdraw $6000 from savings account at the end of each quarter for five years. ...

A: Interest rate Is 5.38% Compounded Semi annually Amount of Witdrawal is $6,000 Time period of with wi...

Q: Given: 20,000 shares cumulative preferred stock ($3.5 dividend per share): 40,000 shares common stoc...

A: Preferred stock is the component of share capital that essentially acts as a debt instrument and is ...

Q: Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.8%, with semiannual ...

A: Bond price implies for the consideration paid by an investor for acquiring bond. In provided case, b...

Q: Assume the spot Swiss franc is $0.7030 and the six-month forward rate is $0.7010. What is the Value ...

A: Here, Spot Price is $0.7030 Six Month Forward rate is $0.7010 Strike Price is $0.6830 Risk Free Rate...

Q: A financial asset delivers a dividend of £2 per share in the first four years, and £2.5 each year af...

A: Present Value: It represents the present worth of the future expected cash flows. It is computed by...

Q: 6. Stock Valuation Suppose you know that a company's stock currently sells for $67 per share and the...

A: Let the growth rate = g Stock price today (P0) = $67 r = 10.8% r is dividend evenly between dividend...

Q: Bulldogs Inc., a corporation with a 40% tax rate, plans to issue P500,000 of 5% preferred share in e...

A: Weighted average cost of capital = cost of debt * (1-tax rate) * weight of debt in capital + cost of...

Q: ny has a financial break-even point at P163,500. How much is the total preferred dividends to be dis...

A: Financial break even point is a point where earning per share of the entity is equal to zero.

Q: Larry owed Rusty a $3,000 debt that is past due. In a telephone conversation, Kathy orally promised ...

A: There are laws governing the financial transactions and these must be written only and any oral thin...

Q: This term is often used by various industries to determine the amount of risk an individual presents...

A: Analysis of the given options: i) Capital- Capital is money put to use for economic purpose and help...

Q: Outline the circumstances in which voluntary and involuntary liquidation may occur

A: Solution:- Liquidation means shutting down the business or ceasing the operations of an entity. It c...

Q: 6. Bonds earn dividends. 7. Dividends are always declared regularly 8. Stocks are generally riskier ...

A: 6. Bonds are the securities issued by the company that pays the regular coupon payments and matures ...

Q: One of the companies is setting up a project to build housing units in which the investment volume i...

A: Capital budgeting techniques: Capital budgeting techniques are tools that are used to evaluate or as...

Q: XYZ Inc. had the following figures in its Income Statement: (please show solution)   Sales Php 920...

A: Cash inflow consists of sales and other income, whereas cash outflow consists of COGS, salaries, adv...

Q: For questions 8-10 assume that Rosa has a 10% chance of getting sick in the next year. If she gets s...

A: Risk premium is the premium that an individual gets due to taking risks. So, whatever a person saves...

Q: A portfolio has an expected rate of return of 0.16 and a standard devi isk-free rate is 4 percent. A...

A: The risk of the investor and return from the portfolio depends on the utility derived from the portf...

Q: 4. Stock Values Poulter Corporation will pay a dividend of $3.25 per share next year. The company pl...

A: Next dividend (D1) = $3.25 Growth rate (g) = 5.1% r = 11%

Q: the price of the bond per 100 of par value is closest to:

A: Bond valuation refers to a method which is used to compute the current value of future cash flow of ...

Q: Dennis wants to buy a $370,000 house with a 20% down payment. He is looking at a 20-year mortgage at...

A: Net mortgage = Value of house * (1-% of downpayment) = 370000 * (1-.20) = 370000 * .80 =296000

Q: The Black-Scholes model is used by Bulldogs Inc. to value call options on the stock of National Inc....

A: Black Scholes Model is one of the mathematical model which is used for calculation of value of put o...

Q: nnual deposits of $3200 at the beginning of every six- month period into a fund earning 4.2% compoun...

A: Future value includes the deposits made and the interest accumulated over the period of time. That g...

Q: National Co. is considering leasing or purchasing a small aircraft to transport executives between m...

A: Here, Cost of Debt is 7% Tax Rate is 40%

Q: 8.  Soho plc is a Stock Exchange listed business. Assuming share price of the company increased duri...

A: Price-to-Earnings(P/E) ratio and Dividend Yield(DY ratio) are used by investors to measure the profi...

Q: Bobby has heard the importance of saving early for retirement. He wants to retire in 35 years. But h...

A: Here, Monthly Savings (PMT) is $600 Time to Retire is 35 years Time to Start saving is after 20 year...

Q: An indium-gallium-arsenide-nitrogen alloy developed at Sandia National Laboratory is said to have po...

A: Rate of return- the rate that will make present value of all extra revenue equal to investment.   Da...

Q: Mario and Luigi each own half of a mushroom pizza parlor. They want to expand by purchasing a second...

A: Valuation of the entity is defined by the round of funding. It is determined by how much % of shares...

Q: Franco wants to accumulate P150,000 in order to make the down payment for a new car. He plans to inv...

A: Annual investment (P) = P25,000 Future value required (FV) = P150,000 Interest rate (r) = 8% Period ...

Q: National Co. pays annual dividends of P9 on the cumulative preferred stock. What is the current valu...

A: Annual dividend = P9 Required rate of return = 12%

Q: On January 1, 200A, ABC Company sells to XYZ, a used transportation equipment, which was acquired at...

A: Notes receivables are the promissory notes which works as a legal document for repaying the money bo...

Q: Red Company is coming up with an investment that pays 8% interest compounded semiannually. What is t...

A: Effective Annual rate refers to the rate earned on savings account where compounding is done over a ...

Q: Dick Eckel recently set up a TDA to save for his retirement. He arranged to have $135 taken out of e...

A: Future value is compounding all intermediate cashflows to future point of time. It helps to ascertai...

Q: g. National Co. estimates that its capital budget for the upcoming year will be P800,000,000, and it...

A: The capital structure of the company consist of debt and equity. Some part is financed by debt and s...

Q: .) The option is currently a.) In-the-money b.) At-the-money c.) Out-the-money 2.) In/At/Out- th...

A: An option grants its holder the right to purchase or sell an asset at the exercise price, but the ho...

Q: Based on this information, the breakeven points for Bulldogs Co. and National Co. are:   a. 5 millio...

A: Breakeven point is that level of sales revenue at which business is only recovering it's fixed costs...

Q: Company A is a motion picture production company. At the end of its most recent financial year, the ...

A: Here, Book value of Debt = $500,000,000 (Including interest for 8 years) Pre-cost of debt = 8% Lever...

Q: Consider the accompanying cash flow diagram (please click the link below), which represents three di...

A: The value of current payment or upcoming flow of payments at any future date when flow of payment te...

Q: 5. Determine the number of days of the loan. Loan Date Due Date Number of Days March 8 July 22

A: Loan date = March 8 Due date = July 22

Q: Increasing debt can be used as part of the financial strategy of the firm to increase ROE decrease c...

A: Debt is a liability which allows an entity to get immediate funds for their requirement and make a l...

Q: What amount must be invested

A: Time value of money is a concept that describes the sum of money which is present today as more valu...

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.