In order to pay a baseball uniforms , a school takes out a simple interest loan forPhp20,000 for 7 months at a rate of 12%. a. How much interest must the school pay? b. Find the future value of the loan.
In order to pay a baseball uniforms , a school takes out a simple interest loan forPhp20,000 for 7 months at a rate of 12%. a. How much interest must the school pay? b. Find the future value of the loan.
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 19P
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Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
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Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Question
1. In order to pay a baseball uniforms , a school takes out a simple interest loan forPhp20,000 for 7 months at a rate of 12%.
a. How much interest must the school pay?
b. Find the future value of the loan.
2. A sum of $10,000 is invested at an annual rate of 8%. Find the balance in the account after 5 years subject to
a. quarterly compounding and
b. continuous compounding.
3. A Php1,000 , 9.5% Malugee Inc. bond has a semi-annual coupon rate of 15%, this matures after 6 years and the required rate of return is 8%. Find the bond price.
4. What is the price of share stock if dividends on a stock today is worth Php20 per share? Dividends are expected to grow at 4% per year . the required rate or return is 4.5%
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