Question: Assuming the debt-equity ratio is 0.70, what is the value of the Microsoft? Which factors are missing when calculating the firm value with just this amount of data?Shares outstanding: 7,753,000,000Current stock price: 137.32

Q: Assume that you are a consultant to Broske Inc., and you have been provided with the following data:...

A: Calculate the cost of equity as follows:

Q: A bond has a yield to maturity of 7 percent. The bond matures in 10 years, has a face value of $1,00...

A: Coupon payments are the interest payments received by bondholders from the date a bond is issued til...

Q: Fiona has a four-year contract to sell coffee in a local office building. After two years in busines...

A: The amount that Kurt should be paying today should not exceed the present value of all the future ca...

Q: A preferred stock has a par value of $110 and pays an annual dividend of 5% of par. If similar inves...

A: Computation of current preferred stock value:Hence, the current preferred stock value is $183.33. 

Q: Suppose that some commercial bank has $100M in deposits and $20M in capital. Assuming a 10% minimum ...

A: Calculation of maximum amount of loan and securities bank can hold:Answer:The maximum amount of loan...

Q: Calculate the price of a zero-coupon bond that matures in 12 years if the market interest rate is 5....

A: The current price of a bond can be calculated by discounting back all future cashflow associated wit...

Q: A proposed nuclear power plant will cost $2.7 billion to build and then will produce cash flows of $...

A: Part A & B:Calculation of NPV at Discount Rate of 3% and 16%:The NPV at discount rate of 3% is $...

Q: How do i solve for r in the equation:  A=P(1+rt)

A: Interest rate is the rate which is paid by the borrower as per the amount borrowed from the various ...

Q: You want to endow a scholarship that will pay $11,000 per year forever, starting one year from now. ...

A: Framework:If P is the perpetuity and r is the discount rate, then PV of a perpetuity = P / rAmount t...

Q: If you disounted a set of positive real cash flows with a nominal discount rate and inflation were p...

A: Justification:Suppose the positive cash flows are discounted with the inflation rate, which is posit...

Q: Scenario Probability Stock fund Rate of Return Bond fund Rate of Return Severe recession 0.05 -30 ...

A: Hence the stock fund mean return is 10.35%.The mean return of stock fundt is calculated by multiplyi...

Q: Brockman Corporation just paid a dividend of $2.00. The dividend is expected to grow at a constant r...

A: Computation of current price of stock:The intrinsic value or current price of stock is $74.67.Formul...

Q: Susan Jones has a job as a pharmacist earning $55,000 per year, and she is deciding whether to take ...

A: Meaning:Expected net present value is calculated as the sum of product of net present values under d...

Q: The Data General Company is expected to pay an annual dividend of $2.53 at the end of the year. Thei...

A: Computation of required rate of return:Required rate of return is 15.81%.Excel spread sheet:

Q: Eastman Publishing Company is considering publishing a paperbadk textbook on spreadsheet application...

A: Calculate the breakeven point as follows:

Q: Your good friend is looking to buy a bond that pays semi-annual interest. The par value is $1,000 an...

A: Computation of bond price:Hence, the recommended bond price will be $1,085.84.

Q: You would Ilike to have $59,000 in 5 years for the down payment on a new house following graduation ...

A: Note: No intermediate rounding is done, only the answer is rounded off to nearest whole number.a) Do...

Q: Question 2. Suppose the current ZCB prices for maturity in two years and in five years are 0.8 and 0...

A: If Pn is the price of ZCB with maturity of n years and Sn is the spot rate for year n then,Pn = (1 +...

Q: what is the formula for compounding interest?

A: Compound interest can be defined as the interest earned on principal amount and on all previous inte...

Q: Can someone please just give me the right answer to the right decimal places for the last part, "How...

A: Future Value = $860,000Interest Rate = 6.5%Interest Rate during a Period = 6.5% ÷ 4 = 1.625%Type of ...

Q: The CFO of briggs industries is evaluating a capital budgeting project that should extend over 4year...

A: a) Depreciation using both MACRS and Straight-line method is calculated as below, with calculations ...

Q: You are the CFO of Carla Vista, Inc., a retailer of the exercise machine Slimbody6 and related acces...

A: Incremental cash flow at the beginning of the project = -( initial investment in the store + initial...

Q: Figure 12.11 shows plots of monthly rates of return on three stocks versus the stock market index. T...

A: You have asked a question with five sub parts. I will address the first three. Please post the balan...

Q: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financin...

A: Computation of total interest:Hence, the total interest that is paid so far is $1,980.06.

Q: What is calculation of Outstanding Mortgage Balance (Repayment of Mortgage)?  Please provide example...

A: Outstanding Mortgage Balance refers the loan outstanding at any point in time after the loan has bee...

Q: Bank A pays 6% simple interest annually on its investment accounts. If Bank B pays interest on its a...

A: Bank A: Simple Interest Rate (r) = 6% or 0.06 (Annually)Time Period (t) = 10 years Assumption:Princi...

Q: 6:05 IMG_0742.jpg X Wildhorse Company is considering buying a new farm that it plans to operate for ...

A:  Net present value (NPV): Net present value is one of the most applicable capital budgeting techniqu...

Q: Some characteristics of the determinants of nominal interest rates are listed as follows. Identify t...

A: The short-term riskless security rate during the period where inflation is expected to zero- real ri...

Q: The ___ the expected return from a financial asset, the ____ the risk of not getting the money back ...

A: Expected Return of Financial Asset:It is the expected profit or loss that is earned from the investm...

Q: Langston Labs has an overall (composite) WACC of 10%, which reflects the cost of capital for its ave...

A: In order to maximize the shareholders' wealth, the risk involved in a project (or investment) should...

Q: Which of the following is true of the current state of financial regulation for financial institutio...

A: Statement 1 is not correct because risk functions in bank will be fundamentally different from the w...

Q: A company has an agreement with a bondholder that prevents it from selling several of its coal-fired...

A: Collateral trust: A bond which is protected against financial asset is termed as collateral trust bo...

Q: New-Project Analysis Madison Manufacturing is considering a new machine that costs $350,000 and woul...

A: Calculate the net present value under worst case as follows:

Q: Gilmore, Inc., had equity of $215,000 at the beginning of the year. At the end of the year, the comp...

A: The maximum growth which a firm can achieve by using internal resources and fund is known as interna...

Q: 13. Company RTZ has a unique dividend policy. The company anticipates paying a dividend of $8 one ye...

A: Non-constant dividend growth model assumes that for first few years dividends are paid at a non-cons...

Q: Is there an easily identifiable debt-equity ratio that will maximize the value of a firm? Why or why...

A: The value of the firm is dependent upon the future cash flows and the discount rate. In the absence ...

Q: A flour mill is considering buying a new jumbo sifter, which would have an installed cost of $80,000...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: The lowest rating a bond can receive from Moody's and still be classified as an investment-quality b...

A: Bond is the debt instrument issued by the firm to raise the debt capital. Bond rating is the grade o...

Q: This year (10 years after you first took out the loan), you check your loan balance. Only part of yo...

A: Hi, there is some additional data missing the question. The total mortgage amount, interest rate, pr...

Q: One-year Treasury bills currently earn 2.50 percent. You expect that one year from now, 1-year Treas...

A: As per the  liquidity premium hypothesis, an investor will hold bonds with long term maturity if the...

Q: Critically evaluate the importance of the standard deviation factor in comparing investments.

A: Standard deviation helps the investor to measure the volatility of the market. It helps an investor ...

Q: Q2)   Suppose the current one-year euro swap rate y0[0, 1] is 1.74%, and the two-yearand three-year ...

A: Meaning of Euro swap rate:A swap rate is the fixed rate that a receiver demands, in exchange for unc...

Q: If you insulate your office for $19,000, you will save $1,900 a year in heating expenses. These savi...

A: a.Initial Investment = $19,000Saving in heating expense = $1,900 Calculation of NPV of the Investmen...

Q: Most corporate bonds in the U.S. have which of the following features?I. Registered formII. Bearer f...

A: The corporate bonds in U.S. are largest component of the U.S. bond market. Corporate bonds are issue...

Q: Washing machine cost $600.  You can buy on credit for 12 monthly payments of $52.74 each total cost ...

A: Answer:No, it was not considered as a best trade-off because, if you wait for one year the price of ...

Q: The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected to be...

A: Computation of the yield:Hence, the yield is 8.58%.

Q: Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the fo...

A: Year 1:Current (Long-Term) Rates = 1R1 = 2.78% Year 2:1R1 = 2.78% or 0.0278E(2r1) = 4.10% or 0.0410 ...

Q: You own a furniture manufacturing company. You are looking to expand into glass furniture and need t...

A: Calculation of ARR:The ARR for Machine 1 is 28.89% and Machine 2 is 32.73%.Excel Spreadsheet:

Q: all methods used to optimize portfolio (FINANCE) from Modern portfolio theory (MPT)?

A: An investment is always evaluated on the basis of return and risks it offers. “Risk” and “return” ar...

Q: Debt Management Ratios Trina's Trikes, Inc. reported a debt-to-equity ratio of 1.94 times at the end...

A: Debt to equity ratio = Debt / Equity = 1.94Debt = $ 10.60 million