Inputs Annual Coupon Rate 3.70% Number of Years 6 Face Value (PAR) $1,000 Price $1,100.27 In Excel: a. What is the YTM? b. Calculate convexity using Excel
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Inputs Annual Coupon Rate 3.70% Number of Years 6 Face Value (PAR) $1,000 Price $1,100.27 In Excel: a. What is the YTM? b. Calculate convexity using Excel
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- WACC Estimation On January 1, the total market value of the Tysseland Company was $60 million. During the year, the company plans to raise and invest $30 million in new projects. The firm’s present market value capital structure, shown here, is considered to be optimal. There is no short-term debt. New bonds will have an 8% coupon rate, and they will be sold at par. Common stock is currently selling at $30 a share. The stockholders’ required rate of return is estimated to be 12%, consisting of a dividend yield of 4% and an expected constant growth rate of 8%. (The next expected dividend is $1.20, so the dividend yield is $1.20/$30 = 4%.) The marginal tax rate is 40%. In order to maintain the present capital structure, how much of the new investment must be financed by common equity? Assuming there is sufficient cash flow for Tysseland to maintain its target capital structure without issuing additional shares of equity, what is its WACC? Suppose now that there is not enough internal cash flow and the firm must issue new shares of stock. Qualitatively speaking, what will happen to the WACC? No numbers are required to answer this question.Financial leverage MicrosoCortrepotied (MSFT) reported the following data (in millions) for a tern year Compute the profit margin, asset turnover, and financial leverage metrics using the expandedDuPont formula. Round profit margin, asset turnover, and financial leverage to two decimalplaces.Round return on stockholders’ equity to one decimal place.Inputs Annual Coupon Rate 3.70% Number of Years 6 Face Value (PAR) $1,000 Price $1,100.27 In Excel: a. What is the YTM? b. Calculate Macaulay’s duration and co c. Plot the price-yield relationship using Excel. Hint: (Calculate prices for different yields, e.g., yields from 0.5% to 23.5%; then your x axis is yields and y axis prices. The plot should show an inverse relationship .
- TTY currently pays a dividend of Ghc1.60 per year. A current price is Ghc118.36. An analyst makes the following estimates: The current required return on equity for TTY is 12 percent. Dividends will grow at 14 percent for the next two years, 12 percent for the following five years, and 10.2 percent thereafter. Based only on the information given, estimate the value of TTY using a three-stage Dividend discount Model approachA firm pays a $13.80 dividend at the end of year one (D1), has a stock price of $149, and a constant growth rate (g) of 5 percent. Compute the required rate of return (Ke). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)Richter Manufacturing has a 10% unlevered cost of equity. Richter forecasts the following free cash flows (FCFs), which are expected to grow at a constant 3% rate after Year 3. Year 1 Year 2 Year 3 FCF $715 $750 $805 a. What is the horizon value of the unlevered operations? b. What is the total value of unlevered operations at Year 0?
- please can you answer with explain with equations for each column? State Probability, p(s) End-of-Year Price Annual Dividend HPR P(HPR) HPR Diviation from E(R_) Diviation^2 PxDiviation^2 Super high growth 9.50% $62 $3 4.84% 0.0000% 0.0000% High growth 18.80% $60 $3 5.00% 0.0000% 0.0000% Normal growth 40.10% $56 $2 3.57% 0.0000% 0.0000% Low growth 20.70% $51 $2 3.92% 0.0000% 0.0000% No growth 10.90% $46 $0 0.00% 0.0000% 0.0000% E(R_)= 0.00% Var(R_)= 0.0000% StD(R_)= 0.0000%Salalah Mills has the following returns. Beginning value=OMR. 200, End of Year1= OMR. 265, End of Year 2=OMR. 320, End of Year 3=OMR. 390, End of End of Year 4=OMR 450. The Average Annual Growth rate (AAGR) of the company is Select one: a. 26.50% b. 26% c. 25.15% d. None of the options e. 22.62%Richter Manufacturing has a 10% unlevered cost of equity. Richter forecasts the following free cash flows (FCFs), which are expected to grow at a constant 5% rate after Year 3. Year 1 Year 2 Year 3 FCF $760 $790 $855 What is the horizon and total value?
- Cost of Equity: CAPM Booher Book Stores has a beta of 1.3. The yield on a 3-month T-bill is 3% and the yield on a 10-year T-bond is 7%. The market risk premium is 7.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.Dhofar Cattle feed has the following returns. Beginning value=OMR. 350, End of Year1= OMR. 365, End of Year 2=OMR. 340, End of Year 3=OMR. 400, End of Year4= OMR 420, End of Year 5=OMR 450. The Compounded Annual Growth rate (CAGR) of the company is Select one: a. None of the options b. 5.15% c. 6.50% d. 6% e. 51.5%Floyd looking at a market and find 1) earnings for the past year were $1,250 per share, 2) the growth rate in earnings is expected to be 3.0% for the next FOUR years and 3) a reasonable PE ratio at the end of year 3 is assumed to be 18. The required return is 10%. If fair value today is the PV of expected future earnings, what’s fair value today?