Which of the following are examples of Asset Allocation? i. I allocate 20% of my wealth to stocks and 80% of my wealth to corporate bonds. ii. Out of all the money I put in the stocks category, I invest 50% in Apple and 50% iii. I allocate 100% of my wealth to crypto currency. O (i) and (iii) only O (ii) and (iii) only
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- A5 6a DEF Company is comparing three different capital structures. Plan A is an all-equity plan and would result in 1000 shares of stock. Plan B would result in 700 shares of stock and $13,500 in debt. Plan C would result in 800 shares of stock and $9000 in debt. The firm’s EBIT will be $10,000 per year until infinity. The interest rate on the debt is 12%. a. Ignoring taxes, compute the EPS for each of the three plans. Which of the three plans has the highest EPS? Which has the lowest?Task 4 Mr. M. Boy is the CEO of Money GmbH. His friends told him that the shares of Koinbase AG, which enables trading in a new type of cryptocurrency called "Litcoin", are particularly suitable for speculative purposes. Since he likes the name of the coin, he decides that Money GmbH will acquire shares of Koinbase AG worth €150k in t1. For a long-term investment, he also buys shares in Desla AG worth €200,000 on December 31. The performance of Desla AG shares is as follows: Mr. M.-Boy is not sure how Desla AG's share price could continue to evolve, as Desla AG's CEO, Mr. Helon Nusk, has often missed announced targets in the past. Mr. M.-Boy is interested in the highest possible annual result at t2. Money GmbH's balance sheet date is December 31. a) How should the shares of Desla AG be committed at t2? Justify your action! b) The share price of Koinbase AG has also fallen rapidly. The total market price of the shares is only 80 T€. How to close the end of t2? Justify your action! c)…In the Chart1. What percentage of 2000's disposable income is invested? 2. How much should be invested if you have $4,000 in cash? If a corporation holds $40 billion in bonds, $10 billion in preferred stock, and $20 billion in common stock... A. How much capital is it worth? B. How much would it theoretically take to manage it? C. Practically, how much would it take to control it?
- A5 6b DEF Company is comparing three different capital structures. Plan A is an all-equity plan and would result in 1000 shares of stock. Plan B would result in 700 shares of stock and $13,500 in debt. Plan C would result in 800 shares of stock and $9000 in debt. The firm’s EBIT will be $10,000 per year until infinity. The interest rate on the debt is 12%. b. Compute the break-even EBIT that will cause the EPS on Plan B to be equal to the all-equity EPS (Plan A).A5 6e DEF Company is comparing three different capital structures. Plan A is an all-equity plan and would result in 1000 shares of stock. Plan B would result in 700 shares of stock and $13,500 in debt. Plan C would result in 800 shares of stock and $9000 in debt. The firm’s EBIT will be $10,000 per year until infinity. The interest rate on the debt is 12%. e. Ignoring taxes, what is the break-even EBIT that will cause the EPS on Plan B to be equal to the EPS on Plan C?IftheboarddeclaresearningsofPhP5.50pershareandtheinvestorown3000sharesofstock,howmuch would be the investor’s cash dividend? a. PhP 16,000 b. PhP 12,500 c. PhP 16,500 d. PhP 15,000
- Citadel invests $65.75 billion in each of Samsung Hedge Fund (SHF) and Apple Hedge Fund (AHF). Citadel has “1 and 20” fee structure and its management fees and incentive fees are calculated independently at the end of each year. After one year, the investment in SHF is valued at $85.45 billion and the investment in AHF is valued at $91.75 billion. The annual return to an investor in Citadel is closest to A. 16.76%. B. 20.15%. C. 26.45%. D. 31.37%. Clear my choiceD4) Finance The Grant Corporation is considering permanently adding $500 million of debt to its capital structure. Grant's corporate tax rate is 35% and investors pay a tax rate of 40% on their interest income and 20% on their income from capital gains and dividends. Using Miller’s (1977) model calculate the present value of the interest tax shield provided by this new debt. Please round your answer to the nearest 0.01. 33.33 million 50.00 million 66.67 million 80 million None of the aboveeBook Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $3 million, $7 million, $11 million, and $16 million. After the fourth year, free cash flow is projected to grow at a constant 5%. Brandtly's WACC is 10%, the market value of its debt and preferred stock totals $48 million; the firm has $15 million in non-operating assets; and it has 22 million shares of common stock outstanding. What is the market value of the company's operations? Do not round intermediate calculations. Round your answer to the nearest dollar. Write out your answers completely. For example, 13 million should be entered as 13,000,000.
- D6) Suppose there are perfect capital markets with taxes. Investors expect a company to have $120 earnings before interest and taxes in one year. This company has a 25% tax rate, $100 market value of debt, and 20 shares outstanding. This company’s net working capital, depreciation expense, and capital expenditures are all expected to be zero in perpetuity. Investors expect this company to have the same earnings before interest and taxes, market value of debt, tax rate, and number of shares outstanding in perpetuity. The firm’s unlevered cost of equity is 8% and its cost of debt is 5%. Based on this information, what amount would you expect this company’s share price to be closest to? $5 $20 $40 $80 $100 $200 $400You are an investor who wants to maximize your profits, and to avoid risks of loss, you have diversified your money by investing it in 5 different banks Banco Azteca, Banamex, Inbursa, Banorte and Santander. Each of the banks has created its investment funds also diversified in simple interest instruments (fixed term), compound interest (investment accounts), annuities (short-term payroll loans), bonds (cetes) and paper money (dollars). You decided to invest in: Banco Azteca $5000, Banamex $10000, Inbursa $7000, Banorte $8500 and Santander $20000. Leaving you with $3,700, of the sum of the remaining uninvested cash flow, for daily unforeseen events. Banks offer you the following investments that combine several investment instruments. Investment portfolios: You must create a combination of 3 of the 5 investment portfolios, which maximizes your investment in 2 years. What should those three portfolios be and how much should you invest in each of them?chapter 9 #4 Assume that a company borrows at a cost of 0.08. Its tax rate is 0.35. What is the minimum after-tax cost of capital for a certain cash flow if 100 percent debt is used? ____________________ 100 percent common stock? ____________________ (assume that the stockholders will accept 0.08)