What factors to be considered in choosing either bonds, preference shares or ordinary shares as the company's capital structure?

Q: What is the required rate of return of the portfolio held by Bulldogs Inc. if the nominal rate of th...

A: Shares Investment Beta BDO 210000 2 TEL 90000 2 SMC 300000 1   Risk free rate = 2.25% Marke...

Q: 7-72 A diesel generator for electrical power can be pur- chased by a remote community for $480,000 a...

A: A Diesel generator for electrical power can be purchased by a remote community= $480000 Time= 10 yea...

Q: hay spent 22 years working in a car manufacturer before going to school to pursue a career as a aram...

A: Money grow with deposit and also with the compounding interest that is being accumulated over the pe...

Q: Cardinal Financing lent an engineering company Php 500,000 to retrofit an environmentally unfriendly...

A: Loan amount (P) = Php 500,000 Interest rate (r) = 10% Period (n) = 5 Years

Q: The Bulldogs Inc. bonds currently sell for P1,500 and the same bond was originally sold at P1,500. T...

A: Current price of bond = P1500 Original price of bond = P1500 Annual coupon amount = P37.50 Period = ...

Q: Assume that a bond will make payments every six months as shown on the following timeline (using six...

A: We are provided with a bond here that makes semi-annual payments. Semi-annual payments means twice e...

Q: The graph shows globa revenue for laptops. A company has a 25% marketshare in 2019. What is an appro...

A: There is need of forecasting to create budget for the production in particular period for that data ...

Q: Today, one unit of Mexican Peso can purchase 3.20 units of US Dollar and it is predicted that the US...

A: Spot rate 1 Mexican Peso = 3.20 US Dollar Depreciation in US Dollar = 10% Exchange rate after 2 mont...

Q: Consider the following information given to > answer the series of questions below to determine the ...

A: Solution:- We know, expected rate of return in case of data (ie. Which involves probability) is the ...

Q: The nominal annual interest rate on 6-month USD Treasury Bill is 4.50%. The spot rate of the Euro is...

A: Given: Spot rate = $3.8643 Forward rate=$3.8880 US interest rate=4.50%

Q: A contract calls for a payment of P1,200 at the beginning of each month for 12 months. At what rate ...

A: The compound interest is obtained by multiplying the initial the principle amount by one, subsequent...

Q: Let's suppose you (USA dealer) imported a product from German on Dec 1, 2018 at € 300, payable in 60...

A: Exchange rate (ER) is a value at which payment is made in foreign currency to buy the goods. Exchang...

Q: Halliford Corporation expects to have earnings this coming year of $3.325 per share. Halliford plans...

A: The Dividend Growth Model: The dividend growth model recognizes that dividends are the cash flows to...

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

A: Call or put options are type of future contracts which are entered in today's date but which will be...

Q: National Co. provides consultancy services to various corporate clients in luzon. The growth rate is...

A: Residual income is the amount of income left after covering the equity charge. The equity charge is ...

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: How much is the interest expense for the year 2020?

A: A bond is a type of investment that is made by the investor as a loan to a borrower and charges a fi...

Q: What would be the bond's price if comparable debt yields 8 percent? Use Appendix B and Appendix D to...

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

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: Calculate the future worth of 20 annual $4,000 deposits in a savings account that earns 8% compounde...

A: Future Value The future value is the amount that will be received at the end of a certain period. Th...

Q: I a) d. Discuss the major shortcomings of the Basle l accord.

A: When the companies look for a financial stability and minimum risk of credit , the guidelines of Bas...

Q: City Debt Debt February March April June First Half Total Debt Percent of Total Debt January $107,30...

A: Data given: City Debt Debt January February March April May June First Half Total Debt Percent ...

Q: g of accounts receivable shows the following: P300,000 already 1-30 days past due; P200,000 already ...

A: The accounts receivables are amount of money to be received from the customers those have purchased ...

Q: All are items that can minimise credit risk, except. Guarantor  Mortagage Collateral  Pledge

A: Firms use credit risk mitigation to reduce the credit risk associated with an exposure. Credit risk ...

Q: Why is the size of the basis point premium larger the longer the term to maturity?

A: The yield to maturity (YTM) of a bond is the total return expected if the bond is kept to maturity. ...

Q: Find the present value of an investment that is worth $19,513.75 after earning 3% simple interest fo...

A: Present Value: It represents the present worth of the future value of the amount and is computed by...

Q: Ten years ago, when Franco was still a college student, he deposited 10,000 in a bank. The bank's ra...

A: Amount deposited 10 years ago (X) = 10000 r = 2% per annum = 0.5% per quarter n = 10 years = 40 quar...

Q: A company is financed entirely by equity and has a beta of 1.0. Its cost of equity is 14%. The compa...

A: Since you have posted a question with multiple sub parts therefore, we will be solving the first thr...

Q: The current zero-coupon yield curve for risk-free bonds is as follows: What is the risk-free interes...

A: Yield to maturity is the rate of return for a bond with an assumption that bond is held till maturit...

Q: 8. A store manager obtained a loan of $45,000, at  6 3 8%  interest, for 14 months to purchase supp...

A: The simple interest is simply calculated as product of principal rate and time

Q: What is the difference between VaR as it has been traditionally measured and stressed VaR? Explain y...

A: Value at Risk is to Define as :- Value at risk (VaR) is a statistic that quantifies the extent of po...

Q: 5. Stock Valuation Redan, Inc., is expected to maintain a constant 4.3 percent growth rate in its di...

A: Growth rate = 4.3% Dividend yield = 5.6%

Q: Pink Inc. has been growing at a constant rate of 10% each year and produce earnings per share of P4....

A: Intrinsic value is also referred to as the price of stock. It is also the accepted value of a compan...

Q: An accountant for Bulldogs Inc. must calculate the weighted average cost of capital of thecorporatio...

A: Weighted average cost of capital(WACC) is the average or overall cost of capital of the company whic...

Q: Question Two Risk in the widest sense is not new to business. All companies are exposed to tradition...

A: Given "Some in the Academic world contend that corporate Risk Management is a zero sum game" It imp...

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: Sara met with a financial planner and has determined that she will need $1,250,000 when she retires ...

A: Retirement amount needed (FV) = $1,250,000 n = 30 years = 360 months r = 5.65% per annum = 0.47083% ...

Q: XYZ issued a bond with a par value of P1,000. The bond pays an interest of P35 each quarter, and has...

A: We need to calculate the price of bond which will be sum of the present value of all coupon payment ...

Q: Contract size (in number of shares) 1,000 Strike price for an ABC Inc. share 124 Current value of an...

A: Options are the financial derivatives which gives the buyer the right to buy or sell an asset but th...

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: Calculate the B/C ratio (modified) of a building that houses students during their classroom discuss...

A: Annual benefit (A) = $525000 Annual cost (C) = $135000 First cost = $2,300,000 Salvage value (S) = $...

Q: E. If Presume you have a 1 year coupon bond that 5% coupon that sells for $180 with a promise to p n...

A: Current yield is the annual cash flow from the bond in comparison the price of bond in the market th...

Q: calculate the missing information.

A:     A promissory note is a type of instrument issued between two parties in a written form for some ...

Q: 1. Calculate the required rate of return on equity National Co. as of the beginning of Year +1 using...

A: Here,

Q: The value of a 6 year lease that requires payments of $850 made at the beginning of every month is $...

A: Time Period = 6 Years Monthly Payment = $850 Present Value = $58,600

Q: Calculate the capitalized cost of an equipment maintained at a rate of 6% every year for $10,000, re...

A: Initial cost (C) = $110500 Annual cost (A) = $10000 Replacement cost (R) = $25000 every 3 years r = ...

Q: Valles Galactic Industries is Equipment is financing some equipment purchases. They anticipate a lif...

A: Loan is a value which is borrowed from external sources like banks for a certain period. This amount...

Q: your company is considering a new project that will require $10,000 of new equipment at the start of...

A: Annual depreciation =(Cost-Salvage value)/Useful Life =(10000-3000)/5 =$1400/year

Q: Megatron Ltd has an equity beta of 1.5. The market risk premium in South Africa is expected to be 5%...

A: Risk Free Rate 9.50% Market Return 5.00% Beta 1.5 Yield On debt 8.00% Debt/Equity 50.00%

Q: Just in preparation for his retirement, a man intended to invest today into a bank with an interest ...

A: Nominal interest rate is interest without considering the impact of the compounding and is less annu...