There are three stocks in a price-weighted index: A $100 B $20 C $60 a. What is the average value for the index? b. Assume stock A goes down by 25 percent and stock B goes up by 25 percent, and stock C remains the same. What is the new average value for the index? c. Explain why in part b the average changed with two stocks moving up and down by the same percentage amount.

Q: A consulting company is buying a new computer system for their headquarters for $175,00 asset has a…

A: Equipment purchased is used due to which value of equipment goes on depreciating and that is to be…

Q: Two partners agree to invest equal amounts in their business One wil contitute $10.000 imedately The…

A: Future value can be calculated using FV (rate, nper, pmt, [Pv], [type]) Rate The interest rate Nper…

Q: The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him…

A: Present value of annuity Annuity is a series of equal amount payment at equal interval for a…

Q: How much debt does the company now have, to the nearest thousand dollars? How much equity? What is…

A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…

Q: Could I Industries just paid a dividend of $1.45 per share. The dividends are expected to grow at a…

A: Stock price is defined as the maximum price that an investor is ready to pay for a stock. It is…

Q: What would be the principal of the loan if you chose Option 1? (Hint: don’t forget the down…

A: Loan Payments: These payments represent the payments made to pay off the loan and this process is…

Q: Analysts expect Costco stock to pay a dividend of $3.70 in 1 year and is expected to sell for…

A: Next dividend (D1) = $3.70 Stock price in year 1 (P1) = $374.41 Required return (r) = 5.0%

Q: a. How many shares must the venture capitalist receive to end up with 20% of the company? What is…

A: An investor that provides equity funding to the companies is known as a venture capitalist. These…

Q: Which of the following is not a main core function of the financial system? a. Provide a payments…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A machine is to be purchased for P155,000 it has an estimated life of 8 years and a salvage value of…

A: Accumulated amount needed = P 155000 - P 6000 = P 149000 n = 8 years Annual deposit (A) = P 14008

Q: This question is based on the following information: Each of the three independent investments below…

A: Present worth (NPV) is one of the techniques of capital budgeting analysis. NPV will be the…

Q: 10. If money is worth 8% compounded quarterly, what quarterly savings is required in order to have…

A: Quarterly compounding refers to the amount of interest earned on a quarterly basis on an account or…

Q: 7.A man invests in a project that requires a fixed capital of P 2.5 M with no salvage, and life of…

A: With reference to capital budgeting, rate of return can be defined as an internal rate of return…

Q: 3. PHL assembles security monitors. It purchases 900 black-and-white cathode ray tubes per month at…

A: The ideal order quantity for a company to purchase to minimize inventory costs such as holding…

Q: A company just paid $1.23 in dividends per share, and it has a dividend payout of 38%.  Considering…

A: a) Dividend paid (D) = $1.23 Payout ratio = 38% PE ratio = 8

Q: During recessionary periods, bonds that were issued many years ago have a higher coupon rate than…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: Calculate the present value:

A: Present Value of Annuity: It represents the present worth of the future annuity stream of cash…

Q: In practice, a common way to value a share of a stock when a company pays dividends is to value the…

A: Stock price is defined as the maximum price that an investor is ready to pay for a stock. It is…

Q: The cc risk free rate r = -0.15% (yes, r< 0). The spot price for TFS is So = 42.50, the cc dividend…

A: The replicating portfolio is a method of finding the value of an option by considering the…

Q: Urgently need Given the following cash flow: $6,500, $4,500, and -$13,000. What is the barrowing…

A: Period Cash flow 1 6500 2 4500 3 -13000

Q: 40. Phillips, Inc. just paid a dividend of $3.25 per share on its common stock (that is, De-3.25).…

A: Price of the stock is sum of all the discounted cash inflows from the stock. So first we need to…

Q: The L-S Mining Company is planning to open a new strip mine in western Pennsylvania. The net…

A: NPV NPV is a capital budgeting tool to decide on whether the given capital project should be…

Q: A project currently generates sales of $18 million, variable costs equal 60% of sales, and fixed…

A: The net amount of cash and cash equivalents transported into and out of a corporation is referred to…

Q: Baguio Rabbitry must replace the piping system in its barn. Based on cost of capital of 12% which of…

A: Annual worth is calculated by multiplying the annual worth factor for the given cost of capital by…

Q: MARIA LOANED AN AMOUNT OF P100,00.00 PAYABLE IN 15 EQUAL QUARTERLY INSTALLMENTS THE FIRST PAYMENT…

A: Loan Amount = P100,000 Time Period = 15 Quarters Interest Rate = 10% compounded bi-monthly

Q: You are considering buying common stock in Grow On, Inc. You have projected that the next dividend…

A: Formula Stock price = D1/(i-g) Where D1 - Next dividend i.e. $8.60 i - Required return i.e. 16.0% g…

Q: A stock does not currently pay a dividend, but you expect to sell the stock for $73 in 4 years. The…

A: Stock price in 4 years (P4) = $73 Period (n) = 4 Years Required return (r) = 7%

Q: Suppose you own 2,000 common shares of Laurence Incorporated. The EPS is $10.00, the DPS is $3.00,…

A: When the existing stock of a company is increased by issuing more shares to the existing…

Q: An investor, Liam, bought a 91-day $25,000 Canadian Treasury Bill. Liam later sold the T-bill 40…

A: Solution : Liam was purchased the T-Bill for 91 days $ 25000 &amp; Current Interest rate was 3.25%…

Q: Faisal has $14,000 in his savings account and can save an additional $4200 per year. If interest…

A: The time value of money concepts can be used to estimate the number of periods it will take to…

Q: 34. A sum of P1,000.00 is invested now and left for 8 years, at which time the principal is…

A: Solution :  As given in question firstly we will invest the principal amount (P 1,000) for 8 year so…

Q: A quoted rate of interest is a “nominal” rate because it includes inflation expectations. a) True…

A: Answer:-   True. The nominal interest rate comprises of the real interest rate and a premium for…

Q: Suppose the economy contains two risk factors: the GDP growth rate and the interest rate. Experts…

A: Three factor model to calculate rate of return on a stock Under this model, risk free rate is…

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: Cost of equity With current market price (P), next year dividend (D1) and constant growth rate in…

Q: online payment method

A: Payment refers to the money transferred in exchange for goods or services decided or agreed upon…

Q: dient series cash flow having ₱3000 on year 3, ₱4000 on year 4, ₱5000 on year 5 and ₱6000 on…

A: Present value is the discounted value of future cashflows.

Q: (WACC) and leverage

A: Cost of capital refers to the tool which is helpful in analyzing the cost of the capital projects…

Q: Omega  company has the following capital structure as at 31st December 2020: Ordinary share…

A: Preferred shareholders would be given priority over equity shareholders in receiving the dividend…

Q: You have two options to invest $1000 in: i) A $1050 face value bond with coupon rate c = 6%. ii) A…

A: Bond is the debt security that investors uses to reduce the risk and increase stable return from…

Q: You already have $54,700 in your savings account that earns 3.50% compounded annually. You will…

A: The concept of the time value of money states that the same amount of money has more value today…

Q: A borrower and lender agree on a negative-amortizing loan in the amount of $300,000 at 4% interest…

A: Future value refers to the value at some future date on the basis of asset or loan amount present…

Q: The market compensates investors for accepting which type(s) of risk? O None of the listed…

A: Risk refers to the level of uncertainty in returns that an investor expects while making…

Q: 8. Nichols Inc. is considering a project that has the following cash flow data. What is the…

A: The internal rate of return (IRR) is a financial metric that is used to evaluate the profitability…

Q: The Wright family wants to save money to travel the world. They purchase an annuity with a yearly…

A: The annuity value at end of 14 years can be calculated as future value of annuity.

Q: P450 P370 P290 P210 P130 P50 P50 1 2 3. 6. i = 10% P F

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Omega  company has the following capital structure as at 31st December 2020: Ordinary share…

A: Here;  We have Dividend paid now D0 is @ per share Growth rate is 10% Current share price is sh. 20…

Q: X, Y and Z. Alternative X requires a cost of ₱50,000 yet guarantees a return of ₱35,000 per year for…

A: Project can be selected based on Net Present Value with highest Value  Net present Value is the…

Q: r project will require an investment of $100 million. This comprises of plant and machinery worth…

A: Cost of debt is yield on the bond after tax . Yield on bond is the discount rate at which price of…

Q: QUESTION 4: RISK & RETURN Aisyah, a new investor cannot decide whether to invest in Stock Media…

A: Solution : We should selected that option of investment of portfolio which provide the highest…

Q: The firm's bank charges $18 per wire and $0.50 per EDT. The EDT takes one day longer to clear. The…

A: Since  Minimum Transfer Balance (TBAL)=Incremental costNo. of days saved×(Investment Opportunity…